Is a mortgage rate reduction on its way? Affordability has long been an issue for home buyers, especially for first-timers, and the relentless uptick in prices for Charlotte homes the past few years has kept many out of the market.
And this month, with a 6.1 percent decrease in the number of closed sales, the first significant drop we’ve seen in recent memory, the pressure is increasing to relieve one of the biggest obstacles to buying a home.
The latest monthly indicators show that while there are hints of an end to the long-running sellers’ market, both inventory and price continue to haunt new home buyers. As of June 30, 2019, the median price of homes in the greater Charlotte region grew by $18,250, or 7.3%. As previously mentioned, inventory continues to shrink. The number of homes on the market dropped by 1,528 units, a decrease of 14% from last June. And while a balanced market requires a 6 months supply of homes for sale, we currently have only 2.3 months supply, a drop of 14.8%.
As for the hints of a return of some balance between buyers and sellers, we’re once again seeing a drop in the percentage of the original list price received. The decrease of .6% for this month is modest, but is at least a continuation of the decreases we’ve been reporting on for the past few months.
Of course, the drop in the number of closed sales in June does not suggest a new trend. It’s just one month. However, it might just be large enough to get the attention of the Federal Reserve, which has been under pressure from the White House to lower the rates mortgage lenders can offer. In its June meeting, the Fed decided not to alter the federal funds rate, citing solid retail sales, low unemployment, and an acceptable inflation rate. But the pressure is on.