Tuesday, August 26, 2003

Rate rise propels buyers of homes

By Jeff McKinney
The Cincinnati Enquirer

Moved to action by higher borrowing costs, Tristate residents bought a record number of homes in July.

infographic Sales of single-family existing homes last month in Southwest Ohio, Northern Kentucky and southeastern Indiana totaled 3,163, up 18 percent from 2,679 in July 2002, local boards of Realtors reported Monday.

The strong sales in July - largely fueled by mortgage rates that have jumped more than a full percentage point the past 10 weeks - marked the second consecutive month that sales rose 18 percent.

As rates rose, some home buyers jumped to make a deal before rates went even higher, Kathy Overstreet, president of the Cincinnati Area Board of Realtors, said.

A 1 percentage point rise in mortgage rates adds about $65 to the monthly payment on a $100,000, 30-year mortgage.

"For each uptick, there is going to be a point of no return for people who can marginally qualify for a loan," Overstreet said. "So, people are realizing that they either have to settle for a lower-priced home or take action to qualify for what they want."

Steve and Emilee Ott were able to lock a 5 percent rate in June to buy a home in the $150,000 range in Independence, Ky., just beating the rise in rates.

"Interest rates were key because if we had not locked in when we did, we would have not been able to buy this much house," Steve Ott said.


E-mail jmckinney@enquirer.com

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