Consumers in the market to buy a house in Charlotte may want to get the wheels in motion, as fixed mortgage rates have never been more affordable in 2014 than they are now.
In the week ending May 8, the average 30-year fixed-rate mortgage hit 4.21 percent – the lowest since November 7, 2013, according to Freddie Mac's latest Primary Mortgage Market Survey. In the previous seven-day period, this loan option averaged 4.29 percent. Meanwhile, the average 15-year FRM dropped to 3.32 percent, compared to 3.38 percent one week prior.
"Mortgage rates continued moving down following the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter," said Frank Nothaft, vice president and chief economist at Freddie Mac. "Meanwhile, the economy added 288,000 jobs in April, the largest since January 2012, and followed an upward revision of 36,000 jobs for the prior two months. Also, the unemployment rate fell to 6.3 percent."
Adjustable-rate loans remained affordable as well, with 1-year Treasury-indexed ARMs averaging 2.43 percent, and 5-year Treasury-indexed hybrid ARMs averaging 3.05 percent.
With mortgage rates dropping to levels not seen in months, buyers could jump at the opportunity to purchase a home, which may lead to a heightened level of activity in the Charlotte housing market.
Falling mortgage rates could fuel Charlotte home sales
The Charlotte housing market has been hot in recent months, and recent mortgage rate movement could lead to more momentum. In March, 2,658 properties were sold – a 1.4 percent year-over-year increase.
"We're pleased to see forward looking indicators like pending contracts improve in March, which means that future sales look promising," said 2014 Association/Carolina MLS President Joe Rempson. "Consumer confidence is on the rise, and even though inventory continues to be a challenge, we think there will be improvement in the months ahead."
In addition to falling rates, increasing inventory levels could help fuel sales in Charlotte. New residential listings increased 4.6 percent when compared to a year ago in March, representing a 5.1-month supply at the current sales pace. With more options available, buyers may be willing to jump in the market, as there is less risk of facing a costly bidding war.
Buyers who do enter the market in the coming months should expect to see higher prices, as the average list price in March increased 6.7 percent year-over-year to $288,600. Meanwhile, the median sales price was up 2.4 percent to $172,000. However, added inventory could help ease these gains, and keep homebuying affordable in the Charlotte area.
Those interested in moving forward on a local housing acquisition, or hoping to sell a house in Charlotte, can benefit by partnering with Lodestone Real Estate. The trusted agency has helped hundreds of individuals successfully navigate the path to homeownership during its years in operation.