Home sales in the region including Clark County climbed 15 percent in February from the same month last year as low mortgage rates, better loan availability and reasonable prices drew buyers into the market, industry experts said.
“People are starting to buy again,” said real estate agent Mike Wade of the Tremont City firm Client’s Choice Realty.
The Ohio Association of Realtors said Thursday that 331 existing single family homes and condominiums were sold in the seven-county region last month, up 15.3 percent year-over-year from February 2012 sales of 287 homes.
The region includes Auglaize, Champaign, Clark, Logan, Mercer, Miami and Shelby counties. Western Regional Information Systems and Technology in Troy, which houses the region’s Multiple Listing Service, only provides a quarterly breakdown of home sales by county for more accurate estimates.
However, the region’s average sale price dropped. Homes sold in February for an average $90,969, down 9 percent from $99,878 a year earlier.
Low interest rates and prices and loosening credit restrictions “are combining to make home affordability at record highs,” said Jim Russell, senior equity analyst of The Private Client Reserve of U.S. Bank, the bank’s wealth management arm.
Interest rates averaged 3.53 percent nationally in February for a fixed 30-year mortgage, up from 3.41 percent in January. But rates are still below the average 4.99 percent it was in February 2010, according to the Freddie Mac Primary Mortgage Market Survey.
“Interest rates are definitely cheaper now. You can’t beat a four or five percent rate on a home,” Wade said. “A lot of people were upside down on their houses … I think you’ll see it getting better and better.”
Economists with PNC Financial Services Group expect the housing market recovery will further strengthen this year, thanks to record-low mortgage rates from expansionary monetary policy, according to the bank’s most recent national economic outlook.
Federal Reserve Board policy has been to buy U.S. treasury debt and mortgage debt to keep interest rates low and stimulate the economy as long as unemployment levels remain high.
The overall economy and housing market are closely intertwined, said Russell with U.S. Bank.
“We think one of the things driving housing is an increased sense that we’re through the worst,” Russell said. “It is a reinforcing mechanism because for most people, 60 percent, houses are their biggest financial asset and it’s stopped losing value.”
The wealth effect of increasing home values bolsters consumer spending and the rest of the economy.
“We do not feel like this is a flash in the pan,” Russell said.
Statewide, preliminary estimates show that 7,360 sales of single family homes and condominiums closed last month, up 10 percent from February 2012 home sales of 6,680 units, said Ohio Association of Realtors. The February Ohio average sales price was approximately $125,000 compared to $115,930 a year ago.
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