Surging mortgage rates make buying in Charlotte even more expensive

Why it matters: Already-fatigued buyers could be priced out of the market. In March 2022, median home sale values in Charlotte were up 21.2% year over year, and now borrowing money is more expensive, too.

• Low mortgage rates gave buyers power this time last year. Now that power is gone, and things are just plain expensive.



State of play: A year ago, mortgage rates were at 2.97%. In late April 2022, mortgage rates were at 5.11%.
If you were to take out a $300,000 30-year mortgage loan in April 2021, your monthly principal and interest would be around $1,260, according to numbers shared by Freddie Mac.

• Your monthly payment on $300,000 30-year loan in April 2022 (at 5.11%) would be $1,631.
• That’s $371 more per month; $4,452 a year; and $133,560 more over the life of your loan.

What’s next: Mortgage rates are expected to rise throughout the year, averaging 4.6% for 2022 and 5% for 2023, according to Freddie Mac’s trend forecast.

• If demand cools because of rising rates, housing prices could stabilize.

Yes, but: We’re still in a critical supply crunch. Realtor Jeff Clay says even if demand cools, we won’t see home prices change anytime soon because demand is still expected to outpace supply.

• “Most sellers don’t have any better option than the house they’re in,” he said.
• New construction will have to catch up significantly in order for Charlotte’s inventory to pick up. Until then, we’re going to see fewer transactions overall.

Bottom line: Home buying in Charlotte won’t get cheaper anytime soon.