CHARLOTTE (QUEEN CITY NEWS) — More and more families are getting priced out of the housing market, as home prices across the nation continue to increase. First-time buyers are hoping higher interest rates will have a cooling effect on the year-long hot market.
As of 2022, the average price tag on a home in the U.S. was nearly $350,000. Those living in the Charlotte area were paying even more, around $401,748.
“Each time we sell a new house, it becomes a neighborhood record,” owner of ZZ Home Realty Zhengzheng (ZZ) Wiley said.
This time last year, Wiley said her phone was ringing off the hook with clients looking to buy a home, now she said calls are coming in less frequently.
“A lot of people are stepping aside to the sidelines, waiting for the market to crash, and some just simply priced out of the market,” Wiley said.
Back in November, homeowners saw about a three percent interest rate on a 30-year fixed mortgage. The Fed has already announced three interest rate increases this year and said more would be coming.
Economists anticipate rates to reach 6.5 percent by the end of the year.
“As the interest rate has risen, it has kind of cooled the market off, so we are seeing fewer sales going forward,” UNC-Charlotte Belk College of Business economics professor John Connaughton said.
But will fewer sales impact the prices for those who are willing to buy? Even with a smaller bidding pool, the cost to purchase a home is not expected to change dramatically.
“Most people think, ‘Oh yeah, if the price keeps going up, it will drop, right? It will crash. Is that the truth?’ At least from the historical data, I don’t see that,” Wiley said. “The market is not going to crash. What happened in 2008 is not going to happen again.”