In the Nation’s ‘Hottest Housing Market,’ Local Programs Support First-time Homebuyers

Strong economic and job recovery combined with affordable prices are making Toledo’s housing market increasingly competitive and pricing out some potential homebuyers. But city and statewide programs are making first-time homeownership achievable through down payment and closing cost assistance. Cover graphic by Jason Mecchi for Midstory.

When Sam Diller, a manufacturing engineer who came to Toledo about six years ago, decided to purchase his first house, he didn’t expect the process to be difficult.

For two months, Diller browsed real estate listing websites regularly. He toured dozens of houses with his real estate agent and made multiple “strong offers” that were turned down, he said. One house had 30 other offers.

“At the beginning, I was pretty excited, but after getting turned down so many times, you get discouraged after a while,” Diller said. “You begin to wonder, ‘Man, will I ever get a house?’”

Diller is not the only one. 

Toledo’s homeowner vacancy rate and home inventory have both been on a downward path since the early 2010s, rebounding from the 2008 Great Recession, while the home price continues to rise — all characteristics of an increasingly competitive housing market. 

In December 2023, the city made headlines after the real estate listing website Realtor.com named it the housing market with the highest forecasted growth in 2024, with a predicted 14% increase in home sales and an 8.3% increase in median sale price.

In a 2021 analysis of the Toledo Housing Market Area, which includes the city and the rest of Lucas, Wood and Fulton Counties, the U.S. Department of Housing and Urban Development’s Office of Policy Development and Research characterized the home sales market as “tight.” The city was recovering from the economic downturn and job loss during the COVID-19 pandemic, and the low supply of homes — about two months of supply in October 2021, when five to six months of supply signal a balanced market — made the market more competitive, the analysis reads.

“In the aftermath of the housing crisis late in the 2000s, builders significantly slowed new home construction which didn’t hurt the market because of a relatively slow economic recovery from the Great Recession and weak demographic trends,” Nicole Winston, a HUD spokesperson, said in an email to Midstory. “Stronger demand for homes since 2020 outpaced supply, resulting in tight market conditions.”

Winston said HUD maintains a positive forecast for Toledo’s economy and housing market. Post-pandemic job growth has continued in the past year, albeit at a slower pace, and unemployment remained at the same level as 12 months ago. During the same period, the average home price has increased by 10%, and home supply has dipped below two months. 

The condition of Toledo’s market mirrors other Ohio metropolitans, many of which have seen significant increases in housing prices in the past decade, especially since the height of the pandemic. Zillow, another real estate listing website, listed Cincinnati, Cleveland and Columbus, Ohio among the hottest housing markets for 2024 based on forecasted home value appreciation, supply and demographic changes.

Despite recent increases in housing prices, homes in Toledo remain affordable compared to the rest of the country. The median listing price in Toledo stood at about $276,000 as of May 2024, nearly 40% less than the national median. However, Winston said the price increase in Toledo, which has outpaced other Ohio metropolitan areas, is making homeownership less attainable. 

“With high mortgage interest rates and home values increasing, some potential homebuyers are being priced out from homeownership,” Winston said.

To help homebuyers purchase their first house in Toledo, the city launched the Home at Last program in 2020. Eligible participants — those who have not purchased or owned a home in the past three years and make less than HUD’s low median family income threshold — can receive up to $9,500 in the form of a forgivable loan if the buyer remains in the property for 10 years. In December 2023, the city announced the program had helped 216 first-time homebuyers since its inception.

“This initiative, driven by collaboration and commitment, has not only opened doors to homeownership for many but also lays the foundation for community growth and generational security,” Toledo Mayor Wade Kapszukiewicz said in the December press release. “The success of this program reflects Toledo's dedication for accessible housing opportunities for everyone.” 

At the state level, Ohio Homebuyer Plus, a new program at the office of Treasurer Robert Sprague, also aims to address rising home prices and help Ohioans achieve homeownership. According to Laura Martine, press secretary for the Treasurer’s Office, eligible residents can put aside money for a down payment or closing costs on a home into a special savings account with a higher interest rate and potential tax deductions.

Citing an April analysis by Bankrate, which finds that people need to make 50% more in income to afford a median-priced house compared to four years ago, Martine said the program targets what the Treasurer’s Office sees as the “most common barrier” to home-buying: affording the down payment.

Since Ohio Homebuyer Plus’ launch in January in collaboration with Governor Mike DeWine’s office, it now has over 10,000 accounts — an indication also of strong interest for homebuying across the state — and nearly 50 partnering financial institutions, Martine said. 

“It's still kind of new to our office at this point, and we're just happy with the growth we've seen so far,” she said. “So I think the plan is for it to continue as long as possible.”

After the months-long house search process, Diller landed on a home in Holland, Ohio, a suburb to the southwest of Toledo known for its annual strawberry festival. The house, likely built in the 1970s, requires some cosmetic work, which he said might have turned away some buyers, but he plans to make the fixes himself. 

“There's a lot of ups and downs, and in order to keep a level head, you need to keep your expectations low,” Diller said. “That's the advice I would give people.”

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