As interest rates in Columbus Ohio and mortgage rates rise, home buyers are often faced with a difficult decision. On the one hand, rising interest rates can make mortgages more expensive, putting a strain on an individual or family’s budget. On the other hand, rising interest rates can also mean a higher return on investment for the buyer, which could be beneficial in the long run.
The economic climate and current market conditions are often the driving forces behind rising interest rates. If inflation is on the rise, the Federal Reserve may choose to raise interest rates to discourage consumer spending and keep inflation from spiraling out of control. In addition, if there is high demand for housing, interest rates in Columbus Ohio may rise due to increased competition for homes.
The decision to purchase a home in an environment of rising interest rates in Columbus Ohio is a difficult one. While the long-term return on investment may be higher, buyers must weigh the immediate cost of mortgages against the potential future benefits. For buyers who are considering purchasing a home in the near future, monitoring the market closely and speaking to a qualified mortgage adviser may help them make the best decision for their financial situation with the interest rates in Columbus Ohio.
Transcript for interest rates in Columbus Ohio:
Dave: (00:05)
Hey everyone. Dave Barlow here with Sell for 1% Realtors, and I feel like I’m at Cedar Point and on a rollercoaster Rich, it’s up. It’s down. It’s all around
Rich: (00:20)
Dave. We do our best to keep it exciting for you.
Dave: (00:24)
I get it, every morning. It’s like a surprise. What are you guys at the mortgage industry going to do to us today.
Rich: (00:32)
Well, you know, I’ll deflect that and say that it’s our friends in Washington that are doing it.
Dave: (00:41)
I understand, and I agree with you a hundred percent. I used to tell people, you know, you go to a social gathering and they find out I’m in real estate and they ask how’s the market and is it going to continue to be this great? And my standard answer became, as long as those ding dongs in Washington didn’t do something stupid, and of course, those ding dongs in Washington did something stupid. And we were up above 7% back in November. You know, last week we were kind of teetering back and forth between low six, high five, right. But we got a little excitement in the market this morning, didn’t we?
Rich: (01:21)
Yeah. It’s actually over the last week or so, we’ve had a series of numbers that have all led to the perception that rates will continue to edge up and that the Federal Reserve will continue to raise rates throughout 2023. We got a very high employment number back at the beginning of the month, which was over 500,000 new jobs created. The CPI number was very high. The PPI number this morning was high, and the retail sales number was also high. So we’ve had a series of numbers that have all, as I’ve said in private conversations, it’s the perception of what is going to happen next. And because of these hot numbers, the perception now is that the Fed will continue to raise rates. And so that’s leading to unfortunately, higher mortgage rates. I hate to be the bearer of bad news, but, we’re in the 6, 6.5 to 6.75% range, depending on your credit and your down payment and all that.
Dave: (02:29)
So we got a half point jump in about a week because of all these numbers coming down the pipe,
Rich: (02:36)
If you can believe that. I mean, and it’s a very difficult thing about my job is that I’ve always got to be aware that what I’m discussing with somebody is constantly changing, right? So it it’s a big challenge. It really is.
Dave: (02:53)
Yeah. It’s crazy. Cause a lot of what you talk about is what’s already baked into the cake, what’s going to happen in the future. And it looked like at the last Fed meeting, they only raised rates 0.25 basis points in that, well, maybe things are kind of slowing down and so on and so forth, but maybe these numbers that have come out here in the last week are indicating that there’s a lot more inflation to come. And therefore what we have baked in the cake for the next Fed meeting, which is probably 0.25 basis points, may not be accurate.
Rich: (03:32)
It could be a 0.5 or 0.75 jump. And more importantly, the language coming out of that meeting probably will be indicative of the fact that they don’t see a need to curtail the rate increases in any time in the future, in the near future. Now I will say this, Dave, and I’m not smart enough to really understand this, but there are some anomalies to these numbers that have come out that I’ve read some articles that seem to indicate that the way that they’re, you know, statistics can always lie. And the way that they’re calculating these numbers has changed in 2023. The jobs number possibly was something that they carried over that was just an allowance that they had for so many seasonal jobs that possibly will not continue into the coming months. So there is some hope on the horizon that some of these numbers may be a little bit overstated and possibly could come down. I read an article about the, the, the PPI number this morning, and they were stating that the way that they’re calculating prices on goods and what types of products they’re throwing into the PPI number have changed for 2023. So in other words, maybe in 2022, they were saying, what are the price of eggs? And now they’re saying in 2023, what is the price of milk? Or what is the price of automobiles? And they’re discounting other products. So things like this are changing those statistics and could come to level out. That’s the one hope we have, is that this will not continue.
Dave: (05:22)
So are you saying that our government is changing the definitions?
Rich: (05:27)
They’re changing…
Dave: (05:28)
Like The they did the inflation.
Rich: (05:30)
Correct. They’re changing the way that they, again, I’m not smart enough to really get into a detailed conversation. I think…
Dave: (05:38)
We’re all smart enough
Rich: (05:40)
But they are changing the way that they present this number and what factors go into these numbers. Yes.
Dave: (05:51)
Yep. I understand. Yeah. I think everybody was in agreement that the 500,000 jobs in January was not an accurate number and what you’re saying…
Rich: (06:02)
It didn’t pass the eye test. Yeah.
Dave: (06:03)
Yeah. I mean, if it had been up, you know, from the projected 200 and something thousand maybe to 300,000, yeah, that’s good. But when it doubles, there’s outside influence happening somewhere, like what you said about carryover from the previous year. That makes sense to me that, you know, I’ll throw the number in and it is what it is. But bottom line is, we know for a fact that as of February 16th, that interest rates this morning are around 6.5%.
Rich: (06:42)
Yes, So 6.5 to 6.75%,
Dave: (06:47)
So, all right. Well we’ve seen, as the old thing goes, we’ve seen this movie before, we’ll work our way through it. We’re fortunate here in Columbus that there’s 40- 50,000 people moving into the city every year. And that’s not including what’s happening out with Intel. Homes are still selling. We’re starting to see… I’ve had a couple listings here recently where we’ve had a couple people in a small bidding war. And I think as we move into the spring market that we’ll see a little bit more of that as more buyers come into the market, there are fewer homes on the market. We’ve lost nearly a third of our listing inventory since November. Wow. We’re around 3300-3400 active listings in Columbus in November, we’re less than 2000 active listings as of this morning.
Rich: (07:45)
Wow, I didn’t realize that.
Dave: (07:46)
Yeah, that’s 1400 active listings. And I think what’s happening, in my own humble opinion, is that sellers are like, well, why would I sell when I got a 3% interest rate and go buy something at a 6-6.5% interest rate? And I think we’re going to see a little bit of a strangle on listings and not because we have so many buyers that they’re just buying up the inventory as fast as it comes on the market. I think that sellers are just sitting tight. And so we need, Rich, for you to make a phone call down to Washington, raise a little concern with those boys and girls and let ’em know that we need to get these interest rates back down into the fives.
Rich: (08:30)
Dave, I’m on it. I’ll get on the bat phone and do that right away, .
Dave: (08:35)
I appreciate that. Rich, thanks for joining us here this morning. Thank you.
Rich: (08:38)
Thank you, Dave. All right. Thanks for having me.
Dave: (08:40)
Yes, sir. Thank you. Bye.
