YOUNGSTOWN, Ohio – Existing home sales fell by 1.2% in February nationwide from a year ago, but in Ohio the number of sales in February were down 6.8%. And in the region that includes Mahoning, Trumbull and Columbiana counties, sales were down 4.7%.
Yet local mortgage bankers are optimistic 2025 could be a good year especially if uncertainty subsides. At the 6.5% to 7% range for a 30-year loan, mortgage interest rates remain double or more the 3% interest rates enjoyed a few years ago.
“We hear less and less that people are sitting back waiting for rates to come down,” says Donnie Fatobene, senior mortgage sales manager at Farmers National Bank. He points out rates have been fluctuating and there are no guarantees they will drop. Fatobene says while many had begun to believe the low interest rates around 3% were normal, they were not.
John Demmler, president and CEO of 717 Credit Union, says the current rates are starting to “normalize.”
“I think we’re seeing people enter back in the market and I have some pretty good expectations of that picking back up here in the spring,” Demmler says.
Demmler says 717 had $50 million in loan originations in 2024 and is on pace for $80 million in 2025. Homebuying increases during warmer months so that number could increase, to $100 million by year’s end.
Housing Shortages
Five years after the pandemic, Covid continues to factor into housing and mortgages. During the pandemic, rates plummeted and people began buying or refinancing their homes at rates as low as 2% to 3%.
“You’ve got a great percentage of people that have a mortgage under 5%,” says Ed Hensley, executive vice president & director of mortgage division of WesBanco Bank, Inc. “I think the numbers say 70% of people with a mortgage out are below 5%, so there hasn’t been a lot of motivation for those people to sell their home and change, although you’re starting to see that change a little bit now.”
People’s circumstances change though and eventually they downsize, upsize or move to where they plan to retire.
He believes that will start to free up some of the housing in a tight housing market.
Hensley says houses under $300,000 continue to sell fast, while homes over $500,000 to $750,000 move much slower.
Fatobene says the housing shortage is particularly prevalent in the $125,000 to $225,000 price range, where they go quickly. The houses that are sitting on the market have inflated prices, Fatobene says.
At one point, a young couple might have started out in a $70,000 house, jumped to a $100,000 home two years later and moved up to a $150,0000 house as their family grew, but Fatobene says that is no longer the progression. Many buy their first home and stay until their family size forces them out.
At the same time, Fatobene says rent prices have risen so swiftly that someone may pay $1,000 per month in rent or find they can qualify for a comparable house with a payment of $800 per month.
Hensley says the rising costs of housing, as well as taxes and homeowners insurance, is pricing some out of the market. However, there remains more demand than supply.
Cost of Construction
The need for more housing has been a major concern in the Mahoning Valley, where many dilapidated homes have been torn down and construction is not keeping up with demand.
The cost of new construction and potential tariffs are leaving builders uncertain whether to start new projects, Fatobene says.
“I guess if I was going to build a house today and I was ready to go right now, I would probably want to get a contract in place right this second if I’m looking to build in a month or two,” Fatobene says. “You just don’t know… the price might go up 25%.”
Additionally, Fatobene says a 1,500-square-foot ranch can no longer be built for $200,000.
The base model may cost closer to $300,000. And since 2008, fewer home builders are willing to start a housing development without buyers already in place.
“Affordability can certainly prevent people from going out there and building,” Fatobene says.
A lack of houses to buy and a high cost of rent has led to generational housing. Hensley says two or three generations may be living under the same roof and taking out a loan to renovate the garage to add an apartment. Investors are revitalizing older housing stock and downtown buildings into apartments.
“You’re starting to see condos become more prevalent where you’re going up versus spread-out, high-rise conversions of different types of buildings,” says Hensley, who is the former president of the Ohio Mortgage Bankers Association.
“[There] are a lot of different creative ways to create affordable housing and get people where they want to be,” Hensley says.
Building Equity
Demmler says they are seeing strong demand for home equity loans in the Warren and Youngstown areas, where home values are appreciating, but not nearly as fast as other parts of the country.
According to Demmler, Youngstown median home values are $84,000 and have increased by 16%, while in Warren the average home value is $45,000 and has increased 8%.
Overall, the broader Youngstown-Warren-Boardman market is at about $155,000 median home value – well below the Ohio and national levels.
Demmler sees people tapping into that increased equity to remodel or consolidate debt. Additionally, remodeling projects can improve the housing stock in the area.
“In this rising home value environment, continuing to make these improvements to homes just makes the homes appreciate even more,” Demmler says.
With good things happening in the area and still an overall low cost of living, Demmler says small renovations can pay off later.
“I’m very, very bullish on Warren and Youngstown,” Demmler says. “I think they’re great markets for investors to invest in, as well as for homeowners to invest in and make renovations to their existing homes.”
To that end, 717 Credit Union has partnered with the city of Warren and the city of Youngstown on low-interest rate façade renovation programs.
The programs encourage both home owners and landlords to improve their properties. That will boost their property value should they need a loan or want to sell the house down the road.
Programs to Help Homebuyers
WesBanco will be combining some of its home buying programs with the ones Premier Bank was using before the two institutions merged. Those include construction lending programs to build a home and first-time homebuyer programs, as well as the federal and Ohio programs. Hensley says one program allows first-time buyers to purchase with as low as 3% down.
“There’s still a perception out there with a lot of people you need 20% down, which is absolutely not true,” Hensley says.
WesBanco has a program future homebuyers can use to solidify their credit score, saving them money and getting them “set up for success.”
To help first-time home buyers, 717 participates in the Ohio Homebuyer Plus Program, which helps future home buyers save for a down payment. Members can earn a 7.17% interest rate as they save and get $717 toward their closing costs when they finance through the credit union. 717 also participates in the Welcome Home down payment assistance program.
Farmers also has a first-time home buyers program, including one based on income that gives a $3,000 grant, with no required down payment and no private mortgage insurance. Regardless of income, those looking at homes in low to moderate census tracts also qualify. Fatobene says it is surprising how many communities and areas in the Mahoning Valley qualify as low to moderate.