Northeast Ohio
Real Estate
December 30. 2022
Happy Friday!
Thank you for checking out my update. I hope you enjoy the upcoming weekend!

Happy New Year!
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Mortgage Update

Mortgage rates dropped even further this week. According to Freddie Mac, the 30-year fixed mortgage rate decreased to 6.27% from 7.08% six weeks ago. As a result, homeownership has become nearly 10% more affordable in the last six weeks as the monthly mortgage payment decreased to $2,140 for the median-priced home.

With mortgage rates double those of a year ago, home sales activity has declined significantly compared to the previous year. However, this year's activity is only 4% lower than the historical average. About 4.9 million homes are usually sold during January and November of each year. This year, 4.7 million homes were sold.

Unless inflation surprises with an upswing, mortgage rates will move closer to 6% at the beginning of the next year, bringing more buyers back to the market.


Even with the change in rates, I am seeing a lot of deals coming together in the last month of 2022. I suspect the typical "spring season" will start early in the coming year, and expect to see a a lot of my clients decide to make a move. If you know anyone thinking about real estate, I'd love to connect to see if I can help. Thank you in advance!
Trends That Defined The Real Estate Market in 2022
The real estate market has been very interesting and will continue to be a bit unpredictable sliding into 2023. Here are three market trends that emerged this year:

The Great Housing Slowdown
There was a homebuying frenzy at the start of the year, with buyers frantically snatching up houses for well above list price. Then, late in the summer, inflation and rising mortgage rates put a damper on the real estate shopping spree. It's predicted that existing-home sales will end the year 16% down from 2021, marking their lowest level since 2014. Annual new-home sales likely will be down 17% for 2022, returning to pre-pandemic levels.

While home sales were falling, home prices mostly remained resilient. After climbing 10% this year, home prices likely won’t change next year, according to forecasts.

Mortgage Rate Shocker
The Federal Reserve’s aggressive hikes on its benchmark rate, plus 40-year high inflation, put pressure on mortgage rates, which climbed dramatically this fall, doubling from a year ago. The market got a major shock Nov. 10, when the 30-year fixed-rate mortgage broke above 7%. A year earlier, rates had averaged 2.98%.

The rate increases—mixed with high home prices—have dampened housing affordability and sidelined many buyers. For example, a 30-year fixed-rate mortgage on a $300,000 loan would cost about $1,283 a month at last year’s 3.11% rate. Now, at an average of 6.33%, such a loan would cost an extra $580 a month, or $6,960 a year.

High Appreciation
Homeowners are enjoying record levels of appreciation. Even as home prices begin to ease at the end of the year, about half of all mortgage holders are still considered “equity rich,”. That means their estimated loan balance was less than 50% of their property’s estimated market value. In the second quarter of this year, an owner’s annual home equity gain was nearly $60,000 compared to 2021.

Equity increases likely will soften in 2023, but even pandemic home buyers, who may have bought at the height of the market, aren’t expected to see much downfall in their home appreciation. Only 3.4% of homeowners who bought over the last two years would be underwater on their mortgage if home values were to fall 4% by the end of 2023.

All in all, it's been a unique year and it'll be interesting to see what's in store!
Listing of the Week
140 W Orange Hill Cir, Orange, OH 44022

Congratulations to my buyers for getting this wonderful Orange home under contract in the last week! Boasting almost 6, 000 sq ft, 4 bedrooms, + 5 full baths, plus amazing finished basement. Major upgrades throughout in a highly desirable neighborhood and fantastic school district. This is an absolute gem and the perfect fit for my clients- beyond thrilled for them!


Check out the listing link---> HERE
Pat Barmann
216.990.5719