Buying a home is an essential part of the American dream, but is that beginning to die as inflation rises the prices of homes into the six-figures? This affordability crisis is gripping the country, and North Carolina as well.
According to Redfin, a real estate brokerage, the average mortgage payment has risen to $2,682, which means that the salary needed by the buyer is now $107,281 compared to $73,668. This pushes many families out of the market all together.
“High rates are making buyers rethink their priorities, as many of them can no longer afford the home they want in the location they want,” Redfin Agent Chelsea Traylor, who works in Washington, D.C., commented. “If you had a $900,000 budget a few months ago, rising rates mean it’s now around $700,000 — and sellers aren’t dropping their prices enough to make up for the change. So buyers are searching further away from the city in more affordable areas.”
The situation isn’t much better in North Carolina, which has seen a surge in relocations from around the country.
The current median sale price of a home in Raleigh in October 2022, according to Redfin, is $400k. That’s a 9.1% increase year-over-year. That’s a little lower than the peak price of $435k in June of this year, but almost double what it was in December 2020, when the median home price was just $270k.
For many families worried about the future of the economy, energy prices, increasing interest rates and the rising costs of food and other items, this is pushing many out of the market.
Homebuying is critical for a family interested in building generational wealth. Without it, families may struggle to pull themselves out of poverty and perhaps into the middle class.
One challenge facing Charlotte, North Carolina right now is the lack of housing due to investors who scooped up homes to put on the rental market. Though perhaps financially lucrative for them, it has meant there are fewer residences to go around for families looking for a forever home to purchase.
Redfin reports that 30% of homes in the Charlotte area are owned by investors. The county is looking at how it can address the issue, by perhaps limiting rentals in HOA communities and investing in more affordable housing programs.
There’s also a new apartment complex going up in the city called Union at Tryon, which will offer 200 residences ranging in price from $900 for a one bedroom to $1350 for a three bedroom. This is a significant improvement compared to most rentals in the area.
Regardless of these great improvements, challenges remain.
For more on housing affordability and what North Carolina can do to address this issue, the John Locke Foundation is hosting the Keep Housing Affordable Summit on Thursday, December 8. Interested? Click here.
