The first month of the new year begins with positive real estate news. Mortgage interest rates remain steady to slightly lower, and there’s good news from the FHA regarding mortgage insurance. Also, the selling prices of existing single-family homes continue to edge upward, especially when it comes to one-bedroom homes.
One-bedroom Homes See Significant Price Increases
Indeed, Trulia’s figures for the three-month period from October 15 to January 15 show real strength in the single-bedroom market segment. The median selling price of a Charlotte-area one-bedroom home is $165,000, and this represents a hefty year-over-year increase of 11.9 percent. Two, three and four-bedroom homes are also selling for more than they did a year ago, although the price increase percentages are in the low single digits
The impressive increases in the selling prices of single-bedroom residences is particularly good news for homeowners that may be ready to sell, but who first need their home equity to improve first. Zillow reports that 18.5 percent of single-family homes still have negative equity in Charlotte, compared to 16.9 percent nationwide. Increasing home values are especially important to those still coping with negative equity.
A Boost From the FHA
As alluded to above, 2015 begins with good news from the FHA. Thanks to the improving performance of FHA-backed mortgages, the federal mortgage insurer is cutting mortgage insurance premiums (MIP) a substantial amount. As a result, FHA-related mortgage rates have now dropped to their lowest levels in recorded history. The lower MIP now makes FHA loans competitive with conventional mortgage loans in many cases. This reality, coupled with FHA down payments as low as three-percent, may spur Charlotte-area home sales in the new year.
Mortgage Interest Rates Remain Low
Buyers should also be encouraged by current overall trends in mortgage interest rates. Bankrate.com reports that, for the week ending January 29, rates dropped one basis point, to a nationwide average of 3.80 percent for a 30-year, fixed rate mortgage. A year ago, analysts expected a gradual increase in rates, but this never fully materialized. As a result, buyers are in a position to get more home for their money as the new year gets underway.
More Inventory Would be Helpful
Interested parties continue to monitor the still-low levels of Charlotte residential real estate for sale. The market in Charlotte is still influenced by a shortage of inventory. January figures from Trulia show a further decline in the number of listings, from 3,582 on January 7 to 3,460 on January 28, although this decline is likely somewhat seasonal in nature.
On average, homes on the market sell in about a month’s less time than they did last winter. Buyers that remain enthusiastic about low mortgage interest rates would benefit from a broader selection of properties. As current homeowners see improved equity, more will undoubtedly enter the market, and inventory should gradually improve.
For the reasons noted above, the Charlotte real estate market should soon demonstrate increased vitality, especially when the chilly days of winter give way to the warm winds of Spring.
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