The Effects of Changing Rates and Home Prices

The summer has officially come to a close and with that the busy season for Charlotte real estate will begin to taper.  Seasonality plays a tremendous role in our markets from year to year.  Both prices and the number of home sales always seem to peak in the summer months and valley in January or February.  This year we saw both sales and home prices peak in June.  But numbers show that sales are still strong, so what does that mean for this fall and beyond?

Since the peak in June, we’ve seen both the average and median sales prices fall 7-10% (which is normal seasonally).  That fact is coupled with a slow recent drop in interest rates.  Although, the general belief is that interest rates will only rise in time, that has not been the case.  Rates in August hovered around 4.12% which is down from a peak of 4.5% earlier this year.  The combination of interest rates and home prices together are what comprise affordability.  With seasonal prices down from the peak and rates at their lowest levels this year, the market is still primed to deliver great results this fall.  If rates remain this low, it should create a great environment for both buyers and sellers.  For buyers, affordability is higher than its been in months.  For sellers, although prices have already peaked this year they are still historically high and affordability due to low rates means demand should remain strong.  The environment for buyers and sellers is great right now and that’s rare!  Its usually skewed towards one party.

In our monthly E-Newsletter, we’ll report the market stats for August as compared to the previous month and again to the same month last year.  Here is a sneak peak:

– Home sales are down 6% from last month, but up 5% from last year.

– Average sales price is down 3% from last month, but up 3% from last year.

– Median sales price is down 7% from last month and down 4% from last year.

– Average time on market is up 2% from last month, but down 27% from last year.

– Pending home sales are down 11% from last month and down 12% from last year.

– Housing supply is down 6% from last month and up 1% from last year.

– Mortgage rates are down to 4.12% which is just slightly down from last month and down from 4.46% last year.

– Average house payment is down 4% from last month and down 1% from last year.

So bring on the fall.  The market is strong and its a great time to be buying AND selling!


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