Prices climbed steadily as demand surged, fueled at first by record-low mortgage rates.
When rates rose later on, the frenzy cooled, but affordability remained a challenge.
Even as of 2023, prices were still rising year-over-year (up ~4.4% from 2022).
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This means buying a home became much less affordable for the average family over that time.
Sales Activity Fluctuations
Home sales activity fluctuated significantly during this period.
When COVID-19 hit in 2020, homebuying paused briefly, then surged.
Ultra-low mortgage rates and new remote-work opportunities in 20202021 led to a homebuying frenzy.
This decline in sales wasnt because demand disappearedit reflected affordability challenges and lack of inventory.
Inventory Challenges
Despite the slowdown in 20222023, housing inventory remained quite low in North Carolina.
This steady inflow of new residents added fuel to the housing market.
With limited houses available, it remained a sellers market throughout 20182023.
In 2018 the average 30-year rate was about 4.54%, then it dipped to ~3.94% in 2019.
These moderate rates helped buyers by keeping monthly payments reasonable.
20202021: Record Lows
Rates plunged to historic lows.
Throughout 2021, rates averaged under 3%.
These ultra-low rates made it possible to afford a higher-priced home for the same monthly payment.
20222023: Sharp Increases
The trend reversed dramatically.
By mid-2023, rates were hovering in the 6%7% range.
This rapid rise had a cooling effect on the housing market.
Many would-be buyers suddenly found that homes they could afford in 2021 were now out of reach.
Inflations Additional Pressures
General inflation picked up in 20212022, reaching about 9% at its peak.
Construction materials and labor costs also jumped significantly.
Construction costs in NC were roughly 30% higher in 2023 than five years before.
According to Zillows consumer housing survey, about 77% of buyers purchase a single-family detached home.
Alternative Housing Types
Townhomes and condos became important options, especially as prices rose.
Zillows data shows townhouses/rowhouses account for roughly 7% of home purchases nationally.
Southern states like North Carolina led in new manufactured home shipments each year in this period.
In the late 2010s, millennials were entering their prime homebuying years.
Early in this period, first-timers were active, taking advantage of decent affordability.
In 20202021, low interest rates enabled more first-time buyers to purchase homes they couldnt have afforded before.
However, the intense competition meant many first-timers had to bid against older or cash-rich buyers.
In NC, we saw boomers moving both within the state and from out of state to retire here.
The pandemic made remote work common and allowed people with means to spend more time in leisure locations.
North Carolina, with its beautiful mountains and beaches, saw increased interest in second homes.
experienced a boom in sales.
However, this trend reversed once rates rose.
By 2023, U.S. vacation home sales had cooled dramatically, down nearly 75% from their pandemic peak.
This regions strong job growth in tech, research, and universities attracted many new residents.
Overall, the Triangle was a high-demand, tight-supply market.
Charlotte Metro
Charlotte, the largest city, had a similar boom.
As a finance and banking hub, it drew many newcomers and had steady job gains.
Triad (Greensboro/Winston-Salem/High Point)
The Triad region had more moderate growth compared to Raleigh or Charlotte.
Coastal Areas
North Carolinas coast saw a mix of primary and secondary home demand.
Beach communities had the vacation home surge discussed earlier, which drove up prices particularly in 20202021.
Towns in the Outer Banks saw double-digit annual price increases.
By 2023, coastal markets cooled somewhatsales volume fell after the frenzy, and inventory improved.
Mountains and Western NC
The Asheville area and mountain counties also experienced robust demand.
Asheville is known for its scenic beauty and livability, which attracted remote workers and retirees alike.
Overall, the price growth in 20082017 was moderate.
For buyers under $250K income, the earlier decade offered a gentler climb in prices.
Housing was generally more affordable in the early 2010s because prices had reset after the crash.
In 2008, 30-year mortgage rates were around 6%.
Compared to 20182023, the rate environment was far more predictablethere was no sudden spike like in 2022.
By the mid-2010s, investors were less of a factor than they became in 2021.
Gradually it shifted to a balanced market by 2015 and a slight sellers market by 2017.
But nothing like the intense sellers market of 2021.
