North Carolina Housing Market

Learn more about the housing market in North Carolina

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North Carolina Housing Market Trends & Forecast

July 5, 2024

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Every state is unique when it comes to the real estate market. That’s why it’s critical to understand the market you live or operate in. Whether you’re renting, buying, or selling, it will impact many aspects of your life.  

North Carolina Housing Market Overview 

North Carolina is one of the most popular states to move to this year. As more Americans than ever work remotely, the Carolinas have had flocks of families and young people move into their gorgeous beaches and historic towns.  

While South Carolina is home to the city with the highest foreclosure rate in the country, the housing market in North Carolina is much less volatile. The typical North Carolina family also will spend about 5.8% less for the same goods and services than the rest of the nation, while South Carolina has one of the highest inflation rates in the country.  

There are a couple reasons why North Carolina may be the perfect place for your next home or investment property. The median price for a house in the state, while definitely rising, is still 18% lower than the national average. Another big reason for a lower cost of living in this area is modestly priced education services, which is 10% below the national generally. Schools in North Carolina have lower tuition and fees than institutions in other states. 

In the past two decades, the North Carolina housing market has grown exponentially— among its picturesque landscapes and many other attractions, tech companies have set up shop in this region, bringing many employees and entrepreneurs to the Carolinas. North Carolina certainly has demand for housing, but what exactly do you need to know if you’re one of the many trying to find a home here?  

North Carolina Housing Market Trends 

To understand the North Carolina real estate market, it’s important to keep up with trends. Let’s look at some key ones in North Carolina: 

Note: These statistics are based on Redfin’s monthly housing data from April 2024. 

Median Home Price 

The May 2024 median home price in North Carolina was $384,100. This is 3.2% higher than the sale price at this time last year, and much lower than the United States average home price of $438,601.  

Number of Homes Sold in April 2024 

There were 13,164 homes sold in North Carolina in April, which is a 6.8% increase year over year. It’s also important to keep in mind that this number might be inflated compared to other months since nationally speaking, sales usually peak during the spring and summer months and slow considerably in the winter. In fact, the National Association of Realtors (NAR) predicts that in February and March alone, sales activity increases by as much as 34% and prices by 3%. 

Median Days on Market (DOM) 

Days on market (DOM) is a measure of the average length of time a home remains listed on the market before being put under contract. A lower DOM signals a highly competitive seller’s market with more pressure on buyers to make higher offers and remove contingencies. A higher DOM signals a buyer’s market as sales are slower and sellers have less leverage. 

The current median DOM in North Carolina is 33 days. This number is the same as it was last year, meaning the market hasn’t shifted considerably since last May. The DOM for the average American home is around 32 days— although the United States is slightly quicker than the housing market in North Carolina, these numbers are close enough to say that North Carolina has a similarly paced market to the general American market.  

New Supply Statistics 

In April 2024, there were 8.99 new residential construction permits per 1,000 people in North Carolina. The average of permits authorized in the United States in 2021 was 5.23, so the pace of new construction in North Carolina is quicker than the nation generally.  

Since 2021, North Carolina has seen a very low housing supply. Typically, four to five months of supply is seen as stable, with fewer months meaning a seller’s market and more months signifying a buyer’s market. Currently, North Carolina is at two months’ supply. In early 2022, Redfin reported that this number dipped to a measly month and a half—although the market seems to be increasing the number of listings available, it has a long way to go before it’s considered balanced.  

With that in mind, the number of newly listed homes is up 10.6% from last year for a total of 17,563. An increase in listings is a good sign for buyers as it increases their choices for homes. Many states have seen a stagnation in the number of new listings as mortgage rates climb— homeowners have reported feeling “stuck” in their homes since they’d have to leave their current rate for something that is likely to be higher with a new property in this market. However, North Carolina’s market seems to show a growing number of new properties coming into the space.  

Property Tax Rate 

North Carolina’s average property tax rate is 0.82%. This state ranks 20th in terms of lowest property tax rate. It’s important to point out that property taxes vary widely depending on the specific county of North Carolina and the value of the home, so this average rate may or may not be indicative of your situation.  

Foreclosure Rate in Q1 of 2024 

The foreclosure rate in North Carolina is currently 1 in every 1,972 housing units. This rate is somewhat average for the nation, and North Carolina ranks 23rd for the number of foreclosure filings experienced according to ATTOM.  

Hottest Local Markets in North Carolina 

  1. Raleigh

Raleigh, North Carolina is a thriving city that boasts fantastic weather, a strong economy, and a relatively affordable housing market. It’s a popular Southern city for many reasons, including equality of pay: income inequality is lower in Raleigh than the national average, with women in Raleigh having an average income 1.31 times higher than the national average income for women. Employment in general grew almost one percent from 2021 to 2022. 

Home prices in this area are up 7.3% compared to last year, selling at $441k according to Redfin. Also, homes in Raleigh sell much faster than in other U.S. cities, with the average home selling in only 17 days, a reduction from last year’s median of 35 days.  

Redfin says Raleigh’s market is very competitive, and that many homes get multiple offers, with the hottest homes going pending in as little as four days and for as much as 2% above list price. 

  1. Wilmington

Wilmington is a port city located on the gorgeous Cape Fear River, allowing residents and visitors to stroll along the water as they peruse bustling shops and delicious southern restaurants.  

According to Redfin, homes in this area are selling for an average of 12.6% higher than last May, now at a median price of $473,000. Last year, their average days on market was a whopping eight days, though it has risen to 22 this year. A DOM of 22 days is still over ten days quicker than the national average, so Wilmington’s housing market is still quite competitive.  

  1. Greensboro

Another trendy NC spot is Greensboro. There are many athletic venues and events to attend, seeing as Greensboro is home to the women’s ACC basketball tournament and the PGA Wyndham and U.S. Figure Skating Championships.  

Downtown Greensboro is very walkable, making it popular for younger adults looking for a city feel without the city price tag. Although Greensboro home prices have risen 15.1% since last year, they remain affordable at $290,000. This market is very competitive, and finding a home may prove tricky. Many homes get multiple offers above list price, and the hottest homes in this area can go pending in 18 days. The average DOM, however, is 28 days. This rate is still quicker than the American average though not as cutthroat as other up-and-coming neighborhoods in the state.  

Economic Factors Impacting the North Carolina Housing Market 

A holistic view of the housing market North Carolina boasts requires a basic understanding of the main economic drivers affecting the market. Let’s look at a few critical ones below: 

Mortgage Rates 

Current mortgage rates in North Carolina are at 6.91% as of the writing of this article. The national average is 7.05% according to Bankrate—this puts North Carolina slightly behind the typical rate for the country.  

Higher interest rates deter borrowing and discourage those who already own homes from putting their homes on the market. Many homeowners across the nation report feeling “tied” to their current homes, as it is unlikely they will secure a mortgage rate as low as their current one if they move to a new property. Prospective buyers in Georgia would be wise to monitor mortgage rates in the coming months for a better understanding of how they impact the housing market. 

Inflation and Cost of Living 

Mortgage rates relate directly to inflation, another massive contributing factor to the affordability of housing and the status of housing markets in general. Inflation has increased the cost of living for many across the U.S., including in North Carolina. This means fewer people can truly afford to limit housing costs to less than the recommended 30% of their monthly income. 

Population Changes and Demographics 

In the last decade, North Carolina has gained over 900,000 new residents, marking a 9.5% gain in population, and an 8.8% gain in the number of housing units since 2010. Since 2022, North Carolina had the fourth highest number of new residents moving in from out of state. Most new residents came from Florida, whose insurance rates and skyrocketing median home prices have been pushing residents out.  

North Carolina Housing Market Forecast 

The increase in North Carolina residents signals a healthy housing market North Carolina buyers want to keep up for the future. Although supply is still well far from balanced, hopefully this uptick in new builds and new listings continues to give buyers more choice in this popular market.  

There is no indication of home prices dropping across North Carolina. Instead, property prices were up by 4.8% year over year, and the market continues to show resilience and stability, with low inventory levels and high demand leading to competitive bidding wars. 

North Carolina’s natural attractions will never change, from its beaches to its mountain ranges, and this will continue to pull buyers in from cities where inflation is hiking prices up further and further. In fact, the 2022 Migration Moving Report stated that North Carolina was second only to South Carolina as a top ranking inbound moving state. 

However, real estate experts warn that once buyers move to North Carolina, they don’t tend to leave. Demand is not likely to lessen anytime soon, even as housing prices and interest rates continue to rise. 

Likelihood of North Carolina Housing Market Crash  

With so much incoming demand for this market from people escaping other states and from the influx of tech companies moving in, there will be plenty of people keeping the North Carolina market competitive and lively.  

As supply continues to increase and interest rates decline, the market should stabilize a little bit. Demand still outpaces supply, and that doesn’t seem likely to change soon. 

Forecast for The U.S. Housing Market 

Now that we’ve looked at North Carolina’s housing market, let’s zoom out a little bit. What about the U.S. housing market? What do you need to keep an eye on in the coming years? 

The United States’s current median existing-home sale price is around $384,500 per the National Association of Realtors. The inventory, though, remains low. A balanced market typically has a 5-to-6-month supply, but the current figure is 2.9. 

We’re currently in a seller’s market with buyers looking at continued rising house prices. The same trend can be seen with renters. Housing continues to appreciate, in general.  

Dr. Lawrence Yun, Chief Economist and Senior Vice President of Research, National Association of Realtors, believes the housing market will appreciate 15 to 25% over the next five years. He thinks that the seller’s market will continue because housing inventory will remain low. In five years, however, he predicts a more balanced market, in which neither party has a built-in advantage. Thus, the market will shift to a case-by-case basis to determine what kinds of deals people can get. 

Hybrid work also impacts the housing market. This shift in work culture means suburbia will continue to grow. States like Texas, the Carolinas, Tennessee, and Florida should see continual growth. 

The number of single-family homes built decreased over the past couple years while the number of multi-family homes increased due to lower prices and a demand for affordable housing. Higher mortgage rates and inflation (affecting price of materials) were the main causes.  

Lower income households continue to struggle in the current housing market. This trend appears likely to continue into the foreseeable future. Without enhanced supply or helpful subsidies, the outlook is that many Americans will still wrestle with housing affordability in the years to come.  

North Carolina Rental Market 

The rental and buying market are obviously closely linked. When home prices fall, landlords are more likely to buy properties to rent out. Home prices and rental prices are correlated as well because a hot market means prices rise.  

Rents were more unaffordable than ever in 2021 and 2022. In 2022, 22.4 million households paying rent said it was unaffordable, which is the highest that figure has ever been, according to a January report from the Joint Center for Housing Studies at Harvard University. The study found that half of all renters in the United States spent over 30% of their income on rent and utilities.  

The markets cooled in 2023, though, due to new units and decelerating demand. But a serious problem persists: Rent increases are still outpacing income gains.  

Moreover, high interest rates are keeping borrowing and transaction activity down. Over half the banks surveyed by the Federal Reserve reported that demand for multifamily loans decreased year-over-year. 

The pandemic caused a housing disparity that isn’t going away anytime soon. Unaffordable housing is a serious issue across America. Whether high rents or low income is the main cause doesn’t change the fact that this problem is widespread.  

This short summary leads directly into North Carolina’s current rental market, with key trends from Zillow:

North Carolina Rental Market Key Trends 

  • Median Rent: $1,899 
  • Month-Over-Month Rent Change: +$4 
  • Year-Over-Year Rent Change: -$1 
  • Available Rentals: 16,005 

Conclusion 

Purchasing a home anywhere is an important decision that requires a lot of time and research. Be sure to continue digging for further info on the specific neighborhoods you’re interested in and monitor interest rates and home prices before diving into this market. If you find that now isn’t the best time, take a step back and grow your savings and credit score. When in doubt, consult with a real estate professional to get advice tailored to your specific situation.

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