Existing Home Affordability is Declining In These NC Cities
In Charlotte and the Raleigh-Durham area, demand still outweighs supply.
While much of the U.S. is seeing a sharp drop in housing prices in response to decreased demand thanks to spiking interest rates, a few markets continue to defy these trends. In cities like Raleigh and Charlotte, supply issues are so drastic that even a small hit to demand hasn’t helped let pressure off the market. As a result, home affordability is taking a dive.
Factors Impacting Affordability
Low Inventory Compared to Demand
In many areas, demand is finally taking a sharp drop, allowing the housing market to regain some semblance of balance. While most cities remain firmly in a seller’s market, in general the frenzy of same-week sales and buying homes sight-unseen has let up.
However, as millennials continue to enter the housing market and as remote work opportunities increase, many people are seeking out cities with a high quality of life and lower cost of living when compared to coastal cities. While demand in cities like Raleigh and Charlotte continues to increase, there’s a need to build more homes in order to keep up — or continue facing declining affordability.
Rising Interest Rates
In addition to the discrepancy between low supply and growing demand, rising interest rates also play a role in decreasing affordability in cities like Raleigh and Charlotte. While competitive pricing coupled with low interest rates still left a bit of room in many budgets, interest rates are steadily increasing for the time being. This means affordability takes a hit, especially where demand hasn’t decreased enough to undercut the competitiveness of the market.
Supply Chain Issues
As builders work to create more homes and help make the market more affordable, many of them unfortunately meet delays and challenges due to supply chain issues. After the supply and labor interruptions caused by the pandemic, many builders are still struggling to close gaps in output.
Options for House Hunters
Brave the Existing Market
Despite the fact that affordability is on the decline in cities like Raleigh and Charlotte, homes still tend to be more affordable than those in cities like San Francisco and New York. As a result, demand holds steady and many house hunters continue to search the inventory of existing homes in order to try to find a house that fits their budget and criteria. However, as demand refuses to let up and interest rates rise, this task becomes more and more challenging.
Build Custom
As homes become less affordable, finding a house that checks all of your boxes for location, amenities, updates, and size — without overly stretching your budget — can feel next to impossible. For a similar budget, many house hunters are choosing to build custom instead. This route allows you to prioritize what you truly need in a home, from location to layout. Instead of compromising on your must-haves and your budget, create a home that fits your lifestyle and your preferences.
With Atmos, the custom homebuilding process has never been easier — get started today!
