How I answer when potential Charlotte homebuyers ask me, “Is now a good time to buy?”

The first question I receive in 85% of casual Charlotte conversations about real estate: “Is now a good time to buy?”

The question is no doubt a loaded one, as there are tons of factors on both local and national scales that go into answering it.

This is why my answers vary from “yes” to “it depends” – here’s why.

Mortgage rates are rising

But they’re still historically miniscule. Today’s 30-year fixed rate is at 4.32%, up about .75% from the lowest low in July of 2016. Economists predict that, due to a desire for continued investment, rates won’t rise above 4.6% by the end of the year. Only 2.6% of those surveyed by Redfin said the hike would cancel their home search. Three out of four respondents had varying degrees of “Yes, I’ll still buy this year.”

Beyond 2017, one would expect rates to continue to rise to more realistic historical rates.

Is it a good time to buy based on mortgage rates? Yes.

What’s the market like in Charlotte?

Crazy.

Where a “balanced market” has a 6-7 month supply of inventory at any given time, homes below $350,000 in Charlotte have been in a sellers’ market for four years.

And inventory is still decreasing due to more expensive new construction, low rates enhancing affordability (read: competitive market), and rising prices due to those factors.

Competition has driven prices up — from a median of $172,000 in January of 2014, to $191,900 this time last year, to the $220’s currently. This is not sustainable growth long-term, as typical average growth ranges from 3.5-5% a year.

Is it a good time to buy based on Charlotte’s housing economy? It depends. Inventory isn’t rising because houses sell so quickly. Simple supply and demand will limit options.

Entering a competitive market with a good strategy? You’re still ahead of the game and able to afford more before rates and competition push you out of what your housing needs dictate.

What do I recommend – buy or rent?

Ignoring any obvious bias of mine, the answer is simple. If you could afford to do so, you buy.

Rental rates are rising faster than ownership rates, and that money is a sunk cost—you’re not building equity on your monthly expenses as with your own home. Prices should (read disclaimer at the bottom) continue to rise steadily for the next few years, so worst-case, your cost of living goes down while you’re cash-positive in a few years. Win/win.

[Related Agenda Story (w/ different viewpoint): Rent or buy in Charlotte? I choose rent.]

Disclaimer: I collect and interpret data in order to provide the best advice possible, but cannot guarantee what will or will not happen in the future. Feel free to email me, [email protected], with more specific questions.