Home sales are at their highest level in nine years according to a recent report from the National Association of Realtors. The Pending Home Sales Index, a measure of contract signings between buyer and seller, is a leading indicator of completed sales over the next few months. The index has been rising every month in 2015 and is currently 15.1% above last year. The Pending Home Sales Index is at its highest level since May 2006, which was before the housing crisis crippled the nation.
A number of factors seem to be driving pending home sales higher. First, interest rates remain extremely low, but the Federal Reserve continues to warn the public that higher rates are on the way. Second, the supply of homes for sale remains tight in many markets across the country. Sellers have more bargaining power as buyers compete for a relatively small number of homes. Third, the housing market is finally showing signs of sustainable recovery as prices continue to rise. Buyers who have remained on the sidelines are entering the market before costs increase even more.
These same trends are reflected in recent Charlotte housing market trends. The recovery that started in the market for one and two-bedroom homes is now evident in larger three and four-bedroom homes as well. The national average for a 30-year fixed-rate mortgage is still below 4%, and the employment outlook in Charlotte looks strong. Both of these factors create a strong demand for home sales in the Charlotte metropolitan area.
While demand for homes increases, the supply of homes for sale in Charlotte continues to fall. Between April 8 and April 29, the supply of homes for sale decreased from 3,000 to under 2,200. Charlotte only has a 3.9 month inventory of homes for sale, which is down over 33% from this time last year. Fewer homes for sale, however, is good news for sellers in the area. Low supply combined with high demand continues to push prices higher. Sellers can expect to receive around 95% of their asking price. The median sales price for a home in Charlotte rose over 6% from the previous quarter to $198,500.
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