Charlotte’s housing market conditions improved as the spring selling season began and mortgage rates stabilized in the mid- to low-6% range.
The average new-home sales rate rocketed higher in the first three months of the year to levels comparable with recent highs seen during the pandemic and helping draw down new-home inventory levels.
Builders also have pulled back sharply on new construction as starts activity fell well below closings. The more readily available supply of new homes has helped spur sales, while the inventory of existing homes remains constrained by higher mortgage rates that have relegated many sellers to the sidelines.
Strengths
The city center has $6.9 billion of new developments in the pipeline that will bring 7.2 million square feet of office space and 7,700 apartments, transforming the skyline. In south Charlotte, 1,500 residential units are planned along Providence Road.
Weaknesses
The share of millennial homeowners lags behind the national average in Charlotte, underscoring the area’s affordability challenges. A study by RentCafe showed millennial homeownership between 2017 and 2022 rose 24%, substantially lower than the nation’s 64% increase for the same period.
Supply
Quarterly housing starts decreased 32.7% from a year ago, while the number of available vacant developed lots sits at 15,762, up 26.7% over the same quarter last year. In terms of supply/demand balance, the market area is 2.94% undersupplied.
Sales
New-home sales in the Charlotte metropolitan area decreased 15% year over year to an annualized rate of 9,866 units in April. Over the past 12 months, 3,021 of sales were attached units and 6,845 were detached. Existing-home closings for the 12-month period ending April posted a year-over-over decline of 40.6% to an annualized rate of 44,854 units.
Prices
The average list price for a new detached home in the Charlotte area increased 1.1% from 2022 to $475,210 in April, while the average list price for a new attached home decreased 9.8% over the same period to $400,514. Homes priced under $250,000 experienced the most closing activity over the past year. The new-home affordability ratio for a detached home reached 25.2 in April.
Economy
Total non-farm employment in the area increased 3.5% from the same period last year to 1,344,400 payrolls in March. There were approximately 6,000 more jobs in March compared with the previous month. The local unemployment rate decreased to 3.3% in March, compared with 3.4% in February. March’s jobless rate is higher than it was at this time last year when it stood at 3.1%. Zonda forecasts the region’s unemployment rate will finish the year at 3.5%.
Community
The population, which is expected to increase by 1.5% this year, is approximately 2,814,340. There are approximately 1,121,180 households in the region, which is up 2% year over year. Forecasts show that current household formation is expected to increase by an annual growth rate of 3.6% for 2027.
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