The Triangle's housing affordability hits new low with rising mortgage rates
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Housing affordability across the Triangle has reached a record low, according to data kept by Triangle Multiple Listing Service.
Why it matters: With demand for single-family homes increasing from local and out-of-state buyers, the price of a home has become increasingly unaffordable since the start of the pandemic.
- Coupled with mortgage rates continuing to rise, the affordability index tracked by Triangle MLS has never been lower.
What's happening: Mortgage rates are the highest since the year 2000, making monthly payments even higher, while a significant lack of housing supply continues to keep prices for homes elevated.
- Triangle MLS' affordability index measures what percentage of the area's median household income is needed to qualify for the median-priced home.
- With current rates, the Triangle's median income was 71% of what is necessary to qualify for the July median sales price of $416,000, according to Triangle MLS.
State of play: The lack of supply and affordability is causing cities across the Triangle to consider measures to increase housing, Matt Fowler, president of Triangle MLS, told Axios.
- Durham is currently considering changes to its development ordinances to allow denser housing to be built in its neighborhoods.
- And Raleigh and Chapel Hill have loosened regulations as well in an effort to create more housing units.
What they're saying: "I don't see a lot of inventory coming" in the next few months, Fowler said.
- Builders can't build fast enough, he added, and existing homeowners are hesitant to sell and give up their low interest rates.
- "The single family [market] is going to keep chugging along," per Fowler. "If mortgage rates start to moderate, I think this market will get back to seeing multiple offers and 10% appreciation per year."
Of note: The cities in the Triangle seeing the most interest — especially from out-of-town buyers — are Cary, Morrisville and Apex, according to Triangle MLS.