Charlotte’s Housing Market Takes a Breath Amid Lower Mortgage Rates
Charlotte is buzzing! October has been a month of unexpected ups for the housing market, as lower mortgage rates have sparked new interest among buyers and sellers alike. According to the latest report from the Canopy Realtor Association, home sales in the Queen City increased by an impressive 4.4% from September to October, while pending contracts (those homes that are under contract but not yet sold) jumped by 4.8%. But before you pop the confetti, let’s dig a little deeper into what this means.
A Breath of Fresh Air After a Dwindling Summer
After a two-month slump in sales and contracts, the latest numbers show that people are coming back to the market. In fact, when comparing to last year, home sales climbed by 1.7%, and pending contracts skyrocketed by a whopping 23.6%. The main culprit for this revitalization? Lower mortgage rates! Canopy’s 2024 president, Charisma Southerland, explains that when rates dipped to around 6% in August and September, both buyers and sellers felt encouraged to jump back in. This trend led to more homes being listed, and, ultimately, a boost in sales.
The Ups and Downs of Interest Rates
While the lowered mortgage rates were celebrated and largely considered a byproduct of the Federal Reserve cutting federal interest rates in September, these savings may not last long. As of Tuesday, mortgage rates in North Carolina have crept back up to around 7.08%, which is eerily similar to last year’s rates. It’s like a rollercoaster ride that many are hoping would just settle down!
When looking at the broader area, Canopy covers 16 counties surrounding Charlotte, plus a few in South Carolina. So whether you’re from Mecklenburg or just visiting from York County, brace yourself! Local experts are suggesting that we shouldn’t expect mortgage rates to plummet anytime soon, even if the Fed continues to cut rates into 2025. Yongqiang Chu from the Childress Klein Center for Real Estate at UNC Charlotte believes we’re looking at a “new normal” for rates in the 6% to 7% range.
Housing Supply and Prices are on the Rise
In addition to fluctuating interest rates, there’s another player in the game: supply! Canopy’s data reported a 35% increase in housing supply compared to October 2023. However, despite this increase, there is still a significant housing deficit that experts warn will keep mortgage rates from dipping significantly.
The median sales price for homes in Charlotte hit a staggering $395,000 last month, while the average sale price climbed to $492,068. That’s a yearly increase of 3.9% and 5.7% respectively. It’s becoming increasingly clear that owning a piece of Charlotte is becoming a luxury. To comfortably afford a house at the median price, a household would need to pull in about $138,036 annually. Unfortunately, the average salary in the area is around $68,880, leaving three out of four households unable to buy.
What’s Next for Home Seekers?
For people looking to buy, the news isn’t all doom and gloom. There are still opportunities in townhomes and condos, where inventory has risen significantly – 46% and 83% respectively. Both Southerland and Chu agree that it might not be worth waiting for interest rates to drop to what many consider “normal” because that could take a long while! Instead, they encourage potential buyers to consider their own financial situations and talk to loan officers about possible assistance options.
“Don’t hesitate,” added Southerland, “especially since more than 80% of properties available are eligible for some type of down payment or closing cost assistance.” This means it’s not just the high-priced homes where buyers could find help!
So whether you’re a seasoned homeowner, a first-time buyer, or just curious about the market, Charlotte’s housing scene is certainly alive and kicking. Keep your eyes peeled because this rollercoaster is far from over!
