How Do High Mortgage Rates Impact Home Sales?
Are high mortgage rates hurting home sales? I’ll explain how rising mortgage rates are impacting the housing market. Spoiler alert: they’re not.
You might think skyrocketing mortgage rates are causing a market crash, but there’s more to it. With 28 years of experience in the Chapel Hill and Durham, North Carolina, real estate market, I’m here to help you navigate these changes.
Current inventory and sales trends. Starting in 2025, we’re seeing a 27% increase in housing inventory compared to last year. This means buyers have more options, which is great news. Pending single-family home sales are up by 5%, showing resilience despite high mortgage rates. According to the National Association of Realtors, pending home sales have risen by 2.2%, reaching their highest point since February 2023.
Local market insights. In North Carolina, pending home sales in the South have improved the most, with a 5.2% increase. Looking at the Raleigh-Durham metro area, median prices are down 2.8%, inventory is down 5.4%, but closed sales are up by 7.7% showing that people are still buying.
Despite rising mortgage rates, buyers are still active and adjusting their expectations.
Breaking it further into Orange, Durham, and Chatham counties, median prices are down 3.2%, inventory is down 15%, and closed sales are up 4%. NAR's Chief Economist, Lawrence Yun, says buyers are adjusting their expectations regarding mortgage rates. They’re no longer just waiting for rates to drop, which gives them a better negotiating position.
Mortgage rates. Currently, 30-year mortgage rates are around 7%. If you have excellent credit, you might get a lower rate, and paying points could help reduce that rate even more. A 1% lower interest rate can make a big difference in your mortgage payment.
If you have questions about the market and your home’s value or need help with a buying or selling strategy for 2025, click on this link to schedule a chat with me. You can also call or send me a message at (919) 759-6359 or [email protected]. I’d love to hear from you.