COVID-19 has affected every aspect of our lives — especially our home lives. While some individuals have been left homeless, others are trying to navigate moving from their apartments to homes of their own. But is it the right time to buy a house in North Carolina?
Mortgage Rates in NC Are at an All-Time Low
Interest rates in North Carolina continue to trend downwards. This week saw 30-year fixed rates fall again to 3.07%. This is a small tick downwards from last week’s 3.14% and a steep drop from 3.91% this time last year.
The recession continues to drive interest down as lenders attempt to make rates more appealing to struggling buyers. Though unemployment in NC has fallen since July, rates are still the highest the state has seen since 2014. Combined with their uncertainties of a record economic recession and fears about COVID-19, buyers are being cautious.
Though the Fed is promising to keep rates low for the near future, some argue that interest rates could rise in 2021. This chance makes late 2020 particularly attractive to potential homebuyers, as their purchasing power is close to cresting at record highs. But is that enough to recommend buying a new home this year?
House prices are on the rise.
Though interest rates remain low, another important factor to consider is the actual price of homes. As of this summer, the NC House Price Index is up 5.47% over last year. There are several factors at play that can explain this.
One of the biggest contributors to high prices is the continued growth of biotech jobs in North Carolina. These high-tech jobs continue to attract well-paid workers to the state, and the industry has been relatively unaffected by the pandemic. High pay and good job security generally make buying a house a particularly safe choice for workers in the field. For others though, this increase in demand is only pushing prices higher.
Even outside the biotech industry, NC is seeing an increase in transplants from bigger metropolitan areas. People from New York, Boston and Chicago are moving to the state, fleeing areas harder hit by the pandemic. These new North Carolinians are mostly settling down in less-dense centers that aren’t the coronavirus hotbeds they’re used to back in the North.
Housing inventory is low and demand is high.
Increased demand naturally leads to higher prices. Something new home buyers might not be expecting, however, is a lower inventory of homes to buy. This trend doesn’t just mean you’ll have a harder time finding the right house in the exact right neighborhood you’d like. It also means you’ll need to be ready to act fast when you find a home you want to buy.
Trevor U., a 28-year-old health information technician from Pennsylvania, and his wife Sarah (age 27) bought their first home in Burlington last month. They quickly found out just how fast homes are appearing and leaving the market.
“One place that we liked had just been listed less than an hour before,” Trevor said, “but when we reached out to the realtor, they told us it was already under contract.”
To buy or not to buy?
So what does all this mean for you? Is now the right time to buy a house in North Carolina?
Overall, record low interest rates can make buying a house in 2020 a sound financial decision, but there are a few things to be aware of.
Although it’s a good time to buy, be aware that basic supply and demand make it a seller’s market. Don’t be discouraged by slightly higher prices. However, prepare for competition, more due diligence and earnest money and for listings to move quickly.
With that said, if your finances are in order and you’re a savvy shopper, 2020 could be the right time to buy a new house in North Carolina.