Cincinnati homebuyers and sellers can expect more of the same in 2025
January 8, 2025
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Cincinnati-area home buyers and sellers can expect to see prices climb at a slower rate and mortgage rates come down slightly in 2025 as the market tilts slightly in buyers’ favor.
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That’s the consensus from a handful of Relators, mortgage lenders and economists polled by The Enquirer who had these predictions for 2025:
Mortgage rates unlikely to drop much below 6% in 2025
The average rate on a traditional 30-year fixed-rate mortgage, which was hovering around 7% in November, is expected to dip closer to 6% in 2025 as the Federal Reserve continues to cut its benchmark interest rate, according to Lawrence Yun, chief economist for the National Association of Realtors.
But even under pressure from the Fed, mortgage rates are unlikely to dip back to the artificially low 3%-4% range where they were before the pandemic began, said Max Snyder, branch manager at RWM Home Loans in Blue Ash,
Still, Snyder said he’s confident rates will drop low enough to kick-start homebuying.
Xem thêm : Mortgage rates are still rising, getting close to 7%
“More probably than not, rates will go below 6% by the end of the calendar year,” Snyder said.
Home prices will remain high
Even if mortgage rates come down, buyers in 2025 will still have to contend with home prices that soared to record highs in 2024 in the Cincinnati area, according to Donna Deaton, a veteran Realtor with Re/Max Victory + Affiliates in Liberty Township.
“Inventory is still too short,” Deaton said. “It’s getting better, and prices are stabilizing. But if we can’t get more inventory, prices are going to stay high.”
The Cincinnati area has about a two-month supply of for-sale houses. A six-month supply is considered a healthy housing market.
But inventory levels have started to improve and were up 11.6% in November 2024, compared to the same month a year earlier, according to market data provided by Zillow.
Baby Boomers to the rescue
The worst of the housing inventory shortage seems to be coming to an end, and the Cincinnati area’s Baby Boomer population could play a role in putting more houses on the market, according to Deaton.
“I think we’re going to see more Baby Boomers who want to sell and head south, especially if we have a bad winter,” she said. “I’ve already seen that with some of my clients.”
More than a third (36%) of homeowners in the Cincinnati area are Baby Boomers between the ages of 60-78, based on an analysis of U.S. Census data by the industry publication, Construction Coverage.
Cincinnati housing market tilting in buyers’ favor in 2025
As inventory levels continue to come unstuck and mortgage rates dip, more home sellers in the Cincinnati area may be forced to negotiate sales prices and offer incentives because buyers will have more options.
That could gradually change the homebuying scene in Cincinnati, which is now considered a sellers’ market in which sellers have the upper hand in negotiations and often get more than their asking price.
Zillow predicts the balance of power will tilt back towards buyers in relatively affordable markets like Cincinnati, where inventory levels are improving while mortgage rates are coming down.
In 2025, “buyers in Cincinnati can look forward to more options and negotiating power as housing inventory continues to recover. This means sellers should prepare to set competitive prices to streamline the selling process,” Kara Ng, a senior economist at Zillow, said.
By the end of 2024, just 13 major U.S. metro areas were considered buyers’ markets, where homebuyers had the edge in negotiations, according to Zillow’s market heat index.
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