The long-term trends we’ve been reporting on in Charlotte real estate are beginning to have their affect on the market. Lenders and builders are feeling the pressure, and the future implications appear positive. Real estate analysts are now seeing indications that the steady growth in demand and home prices are having an impact on mortgage rates. The Mortgage Bankers Association reports that the average rate on 30-year fixed mortgages with a 20 percent down payment rose to its highest level since January 2014. And with the economy still showing robust growth, we can expect continued upward mortgage rate pressure.
The latest indicators confirm these long-term trends are still going strong.
At the end of February, 2018, the number of homes for sale dropped by 1,572 units, an overall decrease of 16.4%. The market’s existing inventory is only 8,035 homes. This left only a 2 month supply of homes for sale, a dramatic drop of 23.1% from February, 2017. Another key indicator, the percent of original price received, edged up by .2% to 96.6% as compared to last year at this time. The median sales price, which smoothes out the effect of high-end homes, thereby providing a more representative picture of the movement of home prices, increased by $25,947, or 12.9% from last February.
In the short term, this will present continued challenges to buyers, especially first-time buyers. A two month supply of houses shows how the market is skewed toward sellers; a four month supply is generally seen as more balanced between sellers and buyers. But real estate analysts are seeing an energetic market that is putting pressure on builders to increase supply, and for sellers to respond to continuing buyer demand. Buyers and their buyer agents will have to respond to this market with all the resources at their disposal, especially in negotiating with mortgage lenders for the best rate available.