Charlotte-area home prices continue to rise, climbing 8.3 percent in July compared with a year ago, a report released Tuesday shows.
Irvine, Calif.-based CoreLogic said home prices nationwide grew by 12.4 percent over the same period, for the 17th month in a row of year-over-year increases in the U.S. and Charlotte.
When sales of distressed homes are taken out, Charlotte prices appreciated 10.2 percent, and prices nationwide rose 11.4 percent.
The increase in prices comes as mortgage rates rise, motivating some people to buy before rates jump further.
Home prices are also climbing in Charlotte as the inventory of existing homes for sale shrivels.
With fewer homes to choose from, prospective buyers are trying to outbid one another, which is contributing to the increase in prices, real estate brokers say.
Mortgage rates are higher amid speculation about when the Federal Reserve will scale back its bond-buying program. The bond purchases have been credited with keeping mortgage rates low.
According to mortgage giant Freddie Mac, the average rate on 30-year, fixed-rate mortgages was 4.46 percent in August, up from 3.6 percent the same month last year. The refinancing boom is largely expected to be over, thanks to the higher rates.
Nationally, the housing market is being closely watched to see what effect rising mortgage rates will have on home sales and prices.
Some observers expect the pace of price growth to decrease in the second half of this year as rates rise further, which could result in a slowdown in sales.
But, so far, Charlotte home prices appear to be increasing in the face of higher rates.
For example, last week’s Standard & Poor’s/Case-Shiller index showed that 13 U.S. cities saw a weakening in price increases from May to June. But Charlotte was one of six cities in which the rise of home prices accelerated, despite higher interest rates.
July’s 8.3 percent rise in prices was the largest year-over-year increase in Charlotte since March 2012, according to CoreLogic. In June, prices were up 7.54 percent from a year ago.
Some Charlotte-area homebuilders say rising mortgage rates have begun to make potential buyers skittish.
Also, builders say, the higher rates are disqualifying some who are looking to buy.
Real estate industry officials say not enough newly built homes are coming on the market in Charlotte to help offset the shrinking number of homes for sale.
They say builders need more available lots in areas that are most in demand, such as those in the Charlotte city limits or just outside.
Roberts: 704-358-5248; Twitter: @DeonERoberts
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