4.78 million existing homes will be sold, prices will remain stable and Atlanta will be the top market to watch in 2023 and beyond. All this according to forecasts by the National Association of Realtors. NARâ€s Lawrence Yun, the National Association of Realtors chief economist and senior vice president of research, unveiled the predictions at NARâ€s annual year-end Real Estate Forecast Summit last month.

Among the predictions were that home sales will decline by 6.8% compared to last year (5.13 million) and the median home price will reach $385,800 compared to 2022â€s $384,500. That is just an increase of 0.3%. 

“Half of the country may experience small price gains, while the other half may see slight price declines,” Yun said. “However, markets in California may be the exception, with San Francisco, for example, likely to register price drops of 10–15%.

After rising to 7% late last year, Yun expects the 30-year fixed mortgage rate to come down a bit to 5.7% as the Federal Reserve tries to get a control on inflation. Foreclosure rates will remain historically low in 2023, according to Yun. Yun predicts less than 1% of mortgages will default. 

Along with pricing predictions, NAR also identified the 10 markets to expect to outperform in 2023. Topping the list is the Atlanta, Georgia metro area. While Charlotte didnâ€t make the top 10, Raleigh, North Carolina comes in at number two. Rounding out the list is Dallas-Fort Worth-Arlington, Texas; Fayetteville-Springdale-Rogers, Arkansas-Missouri; Greenville-Anderson-Mauldin, South Carolina; Charleston-North Charleston, South Carolina; Huntsville, Alabama; Jacksonville, Florida; San Antonio-New Braunfels, Texas and Knoxville, Tennessee

“The demand for housing continues to outpace supply,” Yun said. “The economic conditions in place in the top 10 U.S. markets, all of which are located in the South, provide the support for home prices to climb by at least 5% in 2023.”

The Top 10 real estate markets to watch in 2023 was selected by NAR based on how they compared to the national average by using some of these economic indicators: housing affordability, number of renters who can afford to buy homes at the median price, job growth, population growth, active housing inventory and housing shortages.

How does Charlotteâ€s numbers compare?

Comparing the Charlotte-Concord-Gastonia region to number one Atlanta and number 10 Knoxville, based on the Housing Affordability Index, Charlotte received 89.6 points compared to 100.7 and 97.2 for Atlanta and Knoxville, respectively. 

23.3% of renters in the Charlotte region can afford to buy a median-priced home (at 7% mortgage rates), while 21.3% renters can afford to buy in Atlanta and 24.1% in Knoxville. And when taking a look at the numbers from NARâ€s Housing Shortage Tracker (Oct. 2022) meaning areas where the housing supply meets better housing demand for buyers to have more options,

 Atlanta ranks at 5.6; Knoxville at 4.3 and Charlotte 3.7. This measure computes how many new permits are issued for every new job.

The post NAR Predicts Stable Prices in 2023 appeared first on Charlotte Real Estate.

For the week ending July 7, the 30-year fixed-rate mortgage averaged 5.3% according to data released by Freddie Mac. That is down from 5.7% the week before. Even with the 40 basis points drop, itâ€s still significantly higher than the 2.9% rate from this time last year.

At the start of the new year, rates rose sharply. They hit a high of 5.81% in mid-June but since then economic concerts have pushed them lower. 

“Over the last two weeks, the 30-year fixed-rate mortgage dropped by half a percent, as concerns about a potential recession continue to rise,” said Sam Khater, Freddie Mac’s chief economist. He went on to say “While the drop provides minor relief to buyers, the housing market will continue to normalize if home price growth materially slows due to the combination of low housing affordability and an expected economic slowdown.”

 The drop in rates, along with a 5.4% drop in applications for mortgages for the week ending July 1, reveals a somewhat cooling in the U.S. housing market.

“Mortgage rates decreased for the second week in a row, as growing concerns over an economic slowdown and increased recessionary risks kept Treasury yields lower,” said Joel Kan, Associate Vice President of Economic and Industry Forecasting for the Mortgage Bankers Association. 

As inflation takes a large chunk of an Americanâ€s income, buyers are finding it harder to buy a home. The cost of a loan has reduced their purchasing power. 

In 2021, a buyer who put a 20% down payment on a $390,000 home and financed the rest with a 30-year fixed-rate mortgage had a monthly payment of around $1,200 with an average rate of 2.9%. Today, that same home buyer would pay a little over $1,700 in principal and interest. That is about $500 more every month. 

The decline in mortgage rates last week follows recent volatility in the 10-year Treasury yield. In the first week of July, it dropped 2.8% after spending much of June over 3%.

The Federal Reserve does not set the interest rates that borrowers pay on mortgages directly. However, its actions do influence the rates. Mortgage rates typically track 10-year U.S. Treasury bonds. When investors anticipate rate hikes, they will often sell their government bonds. This behavior sends yields higher along with mortgage rates.

“This inversion might sound ominous, especially in the midst of sustained inflation that both markets and the Fed agree will likely require more fed funds rate hikes to tame, but it remains to be seen whether these market conditions will lead to increases in the unemployment rate or decreases in production that characterize a recession,” said Realtor.comâ€s senior economic research analyst. 

The post Mortgage Rates See Largest Drop Since 2008 appeared first on Charlotte Real Estate.

While generational differences are evolving and having a big impact on homeownership and insurance usage in the U.S., millennials and the youngest of Gen X are experiencing noteworthy delays in owning a home due to the Great Recession, according to a new study by TransUnionâ€s annual insurance summit. In addition to the delays in homeownership, the study also found that out-of-state migration patterns that were partially driven by the covid-19 pandemic, pose risks to insurance providers†bottom lines as consumers preferences and needs are evolving.

The TransUnion study released in May, found that Gen Z and millennials are moving at rates higher than those who are considered Gen X and baby boomers. Per study data, millennials now drive most first-time home purchases, accounting for more than half of purchases at the end of last year.

In an interview with GoBankingRates, Michelle Jackson, senior director of TransUnionâ€s personal property and casualty insurance business, said the trend is due to consumers generally tending to move more frequently in their younger years. 

“However, work from home flexibility, initially out of necessity from the pandemic, has continued with many companies shifting to more permanent hybrid or fully remote models,” Jackson said. “With the ability, in some cases, to work from anywhere, consumers are making decisions on where to live based on factors beyond proximity to their office.”

Jackson went on to say that the recession had a big impact on wages and savings and that millennials have spent the majority of their adult life in an unpredictable economy. Many millennials entered the workforce during the recession and reached prime earning and home buying years during the covid-19 pandemic. 

 “Coupled with delaying other significant life decisions, such as marriage and having children, this has resulted in a delay in the need to purchase a home and settle down,” Jackson said.

Along with a more cautious approach to buying a home, Gen X and millennials are engaging with their insurance providers beyond basic coverage of their homes, the study notes. “Increasingly, people want them to serve as trusted advisors and partners who can help avoid losses in the first place,” Jackson said.

TransUnion found that these generations expect a digital shopping experience as they compare policies and prices. In addition, they are showing a desire for frequent engagement with insurers for annual coverage reviews along with more meaningful engagement such as auto and home safety tips and maintenance reminders. Baby boomers indicated they would prefer not to hear from their insurer unless they reach out first, the study found. 

“Older generations were largely influenced by brand loyalty. Loyalty from younger generations is not as easy to win, and they are constantly seeking out value, advice and a seamless experience,” Jackson said.

Jackson went on to say that younger generations are increasingly more financially savvy and will likely seek out more value in their insurance. 

“Consumers are also looking for more information or advice on how to protect their home and belongings, and with the proliferation of smart home devices, insurers should be looking for ways to capitalize on the use of connected devices,” she added.

Jackson also pointed out that as consumers migrate to southern states such as Florida, Texas and North Carolina, they will need to pay attention to the total cost of ownership beyond market price.

The post Homeownership by Age 30 Dwindling by Generation appeared first on Charlotte Real Estate.

The Demographia International Housing Affordability report found that the least affordable market is Hong Kong, followed by Sydney, Australia;  Vancouver, Canada; San Jose, California; and Melbourne, Australia. The most affordable market in the world is Pittsburgh, Pennsylvania. The other cities rounding out the most affordable in the world are Oklahoma City, Oklahoma; Rochester, New York; Edmonton, Alberta, Canada; and St. Louis, Missouri. Charlotte came in the middle at number 49 on the list.

“As the pandemic and lockdowns continued into a second year, the movement of households from denser urban neighborhoods to larger homes, often with large yards (gardens) in suburban and outlying areas has continued. The result has been to drive up prices at unprecedented rates in many markets. As a result many low-income and middle-income households who already have suffered the worst consequences from housing inflation will see their standards of living further decline,” said author of the report Wendell Cox, a senior fellow at both the Frontier Centre for Public Policy and the Urban Reform Institute.

Cox went on to say “Housing affordability is particularly critical due to the strong increase in remote working (telework) during the pandemic which is accelerating the movement to more affordable places. It will likely also help flatten or even reduce prices in the highest cost housing markets as other households seek less costly housing elsewhere. We hope that the losses sustained during the pandemic will be quickly reversed and the increasing inequality attributable to higher house prices will become a thing of the past.”

The study determined housing affordability for middle-income households by comparing home prices to household incomes in 92 cities and eight different countries for the third quarter of 2021, and then ranked them from most to least affordable.

The median listing price for a typical Pittsburgh home is $222,500, according to data from Realtor.com. This is a favorable comparison to the national median listing price of $405,000. Pittsburgh is also seeing an increase in inventory, so buyers have more options when it comes to their home search. There is currently a two-month supply of homes for sell nationally which is well below what many experts consider “healthy”, a six-month supply. Additionally, the median number of days a house sits on the market in Pittsburgh is 61 which is much longer compared to other U.S. cities. For example, the median number of days a house stays on the market in Denver, Colorado is nine.

You can view the full report here

The post U.S. Housing Market Most Affordable Major Country appeared first on Charlotte Real Estate.

Unfortunately for potential homebuyers, those agreements have shifted. The spring market is predicted to be red-hot but whatâ€s more is that there is a chance it could be the hottest spring homebuying season on record as bidding wars are picking up again.

U.S. home prices soared to an unsustainable 18.8% in 2021. How could the market get any hotter?

In 2020 when the covid-19 pandemic began, many real estate groups predicted the housing market would enter a slump, but the opposite happened. By the summer, the market was booming as first-time millennial buyers rushed in to buy, encouraged by record low mortgage rates and the shift to working from home. The rise in demand from these potential buyers saw inventory shrink. By the following year, inventory dropped 32% from the pre-pandemic levels. Buyers exceeded the number of homes for sale causing bidding wars to begin.

Many industry experts were looking forward to inventory leveling out. It was expected that elderly homeowners who were cautious during the pandemic along with those who were facing financial struggles would list their homes.

The number of homes began to shrink again in November of last year after seeing a brief rise in the fall. Inventory levels in January 2021 were 42% below January 2020 levels. Zillow tracked 327 housing markets and saw 254 have inventory levels down by more than 30%.

Zillow forecasted the yearly rate of home price growth would decrease by 11% by the end of this year. However, in January Zillow revised its prediction and expects the year-over-year rate to peak at 21.6% in May and end the year at 17.3%.

Zillowâ€s prediction is the highest by several points. Other industry leaders like Fannie Mae and Freedie Mac predicted a 7.9% and 7% jump respectively. Meanwhile Realtor.com predicts 2.9%. The Mortgage Bankers Associationâ€s forecast model projects a 2.5% decline by the end of 2022 in the median price of existing homes. Many of the predictions can be taken for what it is, just a prediction as none of these organizations predicted the historic rise in home prices over the past couple of years.

The biggest reason for the less conservative outlook is due to the lower-than-expected inventory levels and a rise in mortgage rates. At the end of 2021, the average 30-year fixed-rate mortgage was 3.11%. Last week saw the 30-year rate up nearly 1% at 3.92%.

The rise in mortgage rates could slow the housing market a bit since it would like price many buyers out of the market. But itâ€s likely the impact will have the opposite effect. Many buyers will rush into the market worried they will miss out on lower rates.

The post What to expect in 2022’s spring market appeared first on Charlotte Real Estate.

The survey found first-time buyers struggled more than repeat buyers. Typically, first-time buyers have smaller down payments because they are less likely to have equity from a previous home which can make their offers seem less competitive. About 67% of first-time buyers submit more than one offer, compared to 54% of repeat buyers.

“Our 2021 survey of buyers found buying a home got more challenging in the past year, but many buyers were ultimately successful in landing a home without taking unnecessary risks,” said Manny Garcia, a Zillow population scientist. “Most buyers continue to get inspections, and sellers appear to prioritize higher offers over waived inspections. Most buyers are ultimately achieving home-ownership by doing their research, making trade-offs and considering a diverse array of options.”

In 2020 and 2021, the average buyer went on three private tours. That is up from just one in previous years. Only 5% skipped a private tour completely. Most home shoppers are still going to at least one open house depside the pandemic.

“So many buyers are hearing horror stories from friends and family about the housing market, so itâ€s important to educate buyers about the local market so they can make the best decision for their family,” says Tom Toole, team lead at Tom Toole Sales Group at RE/MAX Main Line. “Buyers still strongly prefer in-person tours, but virtual tours help people see a home if circumstances donâ€t allow and have helped a number of buyers get a speed advantage in the market. ‘Virtual‘ tools are a great addition to help buyers decide what houses they want to go see in person.”

In-person viewing has remained a priority for home buyers but the desire for 3D and virtual tours are increasing from years past. Survey participants agreed that 3D tours would help them get a better feel for the home than just static pictures. This proves that virtual tools are valued by potential buyers because they make it easier to shop for a home. The share of shoppers who say they are somewhat confident making an offer after only seeing a virtual tour and not an in-person viewing, increased to 58% this year, an increase from 3% last year.

This quarter has shown signs of cooling as home-value appreciation begins to slow and inventory continues to grow each month. Although sellers are still in control, buyers may find more options and less competition which potentially could make a more manageable market.

You can read the full report from Zillow here.

The post New Survey Suggests Real Estate Craze Was Not as Intense as Indicated appeared first on Charlotte Real Estate.

The sharp drop in new listings was partly due to severe weather. The severe winter storms across the country limited the market activity. This resulted in newly listed homes further declining by 24.5%. In the 3rd week of February, new listings dropped by 35.2% compared to last year. As conditions got better in the final week of February, they recovered to 26.9%. The severe weather coupled with an already record-low supply is making it increasingly difficult for buyers to find their home at their perfect price point. 

“Last monthâ€s record cold and snowstorms likely caused sellers to hit pause, even if only temporarily,” said Danielle Hale, chief economist at realtor.com. “However, in todayâ€s inventory-starved market, any setback is significant. Unless we see some big improvements in the new listings trends over the coming months buyers can expect stiff competition.”

The hesitancy from sellers resulted in about 207,000 fewer newly listed homes for sale during the first two months of 2021. In order to reach the same average of the past four years, new listings would have to grow by 25% annually in March and April. Something that is unlikely. 

While declines were across the country, the biggest drops in supply were in Oklahoma City, Kansas City, Missouri, and Milwaukee. The only major cities seeing inventory gains were San Jose, San Francisco and Denver. 

Meanwhile in the Charlotte-Concord-Gastonia, N.C.-S.C. area, the housing market saw an 18.5% drop in new listings compared to this time last year. The housing market in Charlotte is still booming however, according to Mecklenburg County officials. 99.2% of sellers are getting their asking price or more within 23 days of being on the market, according to the countyâ€s data.

“We’ve seen large increases in our housing market throughout the year,” said Michael Simmons, the county’s economist.

Realtors say Charlotte’s real estate market is unlike anything they’ve ever seen. The Queen City is one of the hottest real estate markets in the country with 122 people moving here every single day, according to WCNC TV in Charlotte. 

Nationwide, the tight supply has only made sellers more confident in their potential gains. Newly listed homes hit an all-time high asking price of $347,475 in February, according to Redfin. According to realtor.com, the median listing price in Mecklenburg County is $345k.

The post Spring Housing Market Expected to Be Leanest and Most Competitive Ever appeared first on Charlotte Real Estate.

NARâ€s Pending Home Sales Index measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. The PHSI fell 2.2% to 130.0 in September. An index of 100 is equal to the level of contract activity in 2001. 2001 was the first year examined.

“The demand for home buying remains super strong, even with a slight monthly pullback in September, and we’re still likely to end the year with more homes sold overall in 2020 than in 2019,” said Lawrence Yun, NAR’s chief economist. “With persistent low mortgage rates and some degree of a continuing jobs recovery, more contract signings are expected in the near future.”

“Additionally, a second-order demand will steadily arise as homeowners who had not considered moving before the pandemic begin to enter the market,” Yun said. “A number of these owners are contemplating moving into larger homes in less densely populated areas in light of new-found work-from-home flexibility.”

The report is the latest in findings that show the housing market cooled in September after showing being strong in the summer. Sales of existing homes fell as well according to NAR. The commerce Department said September sales of newly constructed homes also decreased. Despite the decline, contract signings climbed 20.5% compared to a year ago.

On a month-to-month basis in September, three of the four regional indices tracked by NAR recorded a decrease in contract activity. The Northeast was the only region to record month-over-month gains. The Northeast index grew to 119.4 in September. That is a growth of 2.0%, a 27.7% increase from September 2019. The PHSI in the South fell 3.0% to an index of 150.1 in September which is up 19.6% from September of last year. The index in the west slid 2.6% in September to 116.8 an increase of 19.3% from a year ago. The Midwest saw the index decrease 3.2% to 120.5 last month, up 18.5% when compared to a year ago. All four regions experienced double-digit year-over-year increases.

The next Pending Home Sales Index will be released by The National Association of Realtors on November 30.

The post Pending Home Sales Stumble 2.2% in September appeared first on Charlotte Real Estate.

The report also revealed a growing strain in housing supply. The estimate of new homes for sale fell to 282,000 from 291,000. At the housing marketâ€s current rale of sale, there is a supply of 3.3 months. A 6-month supply is considered the benchmark for a balanced market.

The growing interest in newly-constructed homes largely stems from the lack of existing homes for sale. While existing-home sales have also increased at a fast pace, the inventory of homes left on the market is depleting. Despite this, some sellers have been reluctant to sell according to a report from Realtor.com. The article found that nearly 400,000 fewer homes have been listed for sales since the start of the pandemic compared to last year.

Through the coronavirus pandemic, the U.S. housing market has been one of the few industries to enjoy a V-shaped rebound. In March, the Federal Reserve lowered mortgage rates and spurred a pickup in home sales. The messaging from the central bank that rates would stay low for years, added fuel to the market rally. Some, however, fear that the sharp resurgence is on its last legs.

“While strong demand and lower mortgage rates are supportive of home sales, the slow recovery and weak labor market pose downside risks that we expect will weigh on home sales in the months ahead,” said Nancy Vanden Houten, a researcher at Oxford Economics.

Prices for homes could become a barrier for the real estate market. Low supply in combination with low interest rates and high demand has sent prices upward. Some buyers could eventually find themselves priced out of the market.
There are some other indications that have pointed to a lasting demand in the sector. Home-builder optimism reached an all-time high in September, according the National Association of Home Builders/Wells Fargo Housing Market Index. Throughout the summer, sales of existing homes have trended in line with new-unit purchases.

“Already, more new homes have sold in 2020 than did in all of 2019,” said Danielle Hale, chief economist at Realtor.com. “With the number of existing homes for sale down consistently and considerably from a year ago, new homes are an important segment of opportunity for home shoppers.”

The Census Bureauâ€s full release can be found here.

The post New Home Sales Surge to Highest Level Since 2006 appeared first on Charlotte Real Estate.

A new Metro Monitor 2020 report released by The Brookings Institution reveals the United States has achieved a record-long economic expansion over the past decade. The report is an annual analysis that tracks various communities†economic growth, prosperity and inclusiveness. The data was collected over two time periods: 2008-2018, the decade following the 2007 global financial crisis and 2017-2018, the latest year of data available across all indicators.

With an expanded set of metro areas, the 2020 report categorized metro areas into three classes based on size. With size becoming an important element in determining economic growth, The Bookings Institution decided this approach promoted a more relevant benchmark among other metropolitan areas. 53 metro areas total fall into their “very large metro area” which includes populations over 1 million.  The Charlotte-Concord-Gastonia Metropolitan Statistical Area falls into this category with a population of almost 2.6 million.

Charlotte ranked 12^th in overall growth in the 2008-2018 while gaining 2.3% and rising to number 9 for the 2017-2018 period. There was also a 4.8% increase in Gross Metropolitan Product and a 5.7% increase in jobs at young firms. The region also showed a 7^th ranking for Prosperity in the 2017-2018 time period– a 2.4% increase in change in productivity with marginal increases in average annual wage (+1%) and change in standard of living (+3%)

The Metro Monitor report ranked Charlotte at 28 out of the 53 very large metro areas for racial inclusion in the 2008-2018 time period with a 31 ranking for the 2017-2018 year. The very large metro areas’ success did not extend to this category but the midsize areas such as our neighbors in the Hickory-Lenoir-Morganton metro made better  progress in reducing the economic gaps. The racial inclusion category relates to comparisons between white citizens and people of color. There were poor rankings across the board in this category which included poverty rate gap (36), median earnings (31), and the employment rate gap (32).

The Overall Inclusion category however paints a different picture with a ranking of 24 out of 53 for the 2017-2018 time period, a big jump from 43 for the decade proceeding. Helping that increase was a strong change in the employment rate (+1.7%), earning Charlotte a number 6 ranking.

While the covid-19 virus pandemic may be prompting fears of a worldwide economic downturn, the past decade has shown that the nationâ€s GDP has grown in every quarter since the middle of 2009 and the labor market has added jobs in every month since September 2010. All things to consider in the coming weeks of uncertainty.

The full Metro Monitor 2020 report from the Brookings Institute can be found here.

And you can explore their interactive map data for the Charlotte area as well as other U.S. cities  here.

The post Amid Coronavirus Outbreak Charlotte Shows Economic Strength appeared first on Charlotte Real Estate.