Wilmington, N.C.- So far 2023 has been a year of highs and lows for the nation’s housing market.
Since the start of the year housing prices have fallen an average of 1% a month throughout the nation. Experts say the reason for the decline in prices are the recent increase of mortgage interest rates. Interest on the average mortgage obtained in 2023 has hovered above 7%, compared to 4.5% this time last year.
As interest rates climb, so do your mortgage payments. An increase in two or three percent can add hundreds of dollars per month. The higher fees have chased away some buyers, especially investment buyers.
“When you study the recent housing boom, what you discover is that it was fueled by investors,” said Scott Saxton of Just For Buyers Realty. “Investors were just gobbling properties, knowingly the rates were so low that they could turn around and rent them for a profit. Now that the rates and monthly payments are higher, that eats into their margin, and investors are deciding to put their money elsewhere.”
Alaska had the biggest decline in month-over-month prices. Home prices fell by 4.9% in January. New Mexico and Wyoming followed, with a 3.8% decline. Mississippi took the next spot with home prices dropping 3.7% in January as compared to the month before.
However here in the Cape Fear Region prices have remained steady. The graphic below shows the average price for each of the last 12 months in the tri-county area of New Hanover, Brunswick and Pender Counties. What you will notice is that housing prices basically hover in the same $20,000 range. One month there may be a new record setting high, than the next couple of months there will be a decrease, followed by a few increases.
“I look at this chart and I see stability,” said Saxton. “The housing market in this part of the country is not based on the fickle activity of investors. Instead it is based on people relocating here from other parts of the country. People want to live here… and as long as that’s the case, I am not worried about this area having a bubble.”
Average Monthly Prices March 2022 to February 2023
Nationwide the average price for an existing home is $359,000, some 27% lower than the Cape Fear average.