03 Dec Mortgage News Summary for December
We are following several mortgage and real estate news stories this week.
New home sales declined at the national level in October. Locally, property owners in Mecklenburg County should be prepared for a steep increase in home values. Meanwhile, the number of home showings has decreased in the Charleston area. Here is more on the mortgage news stories we are watching:
Sales on New Homes Decline Across the Nation
U.S. home sales sank 8.9% in October. The number of recently constructed, unsold homes on the market rose to the greatest level since 2009. New home sales have been on the decline for four of the past five months, with the sales of new homes having dipped 12% year-over-year largely as a result of rising interest rates. New home affordability is again an issue with the climbing rates. Likewise, existing homes are experiencing a decline in sales, down 5.1% this year. The average 30-year mortgage interest rate was 4.81% as of last week, an increase from 3.92% compared to the same time in 2017.
Mecklenburg County Property Owners Should Brace for A Jump In Value
The last time Mecklenburg County property values were re-evaluated was 2011. In a just over a month, property owners in Mecklenburg County will receive the verdict on their revised property tax values. Both residential and commercial property values have increased significantly over the past eight years in part because of a robust economy and a healthy real estate market. It shouldn’t come as a surprise that the new values will reflect that. In addition, these updated property values will affect how Charlotte-Mecklenburg and the other locales will spread out the strain of property taxes over the next several years. Be prepared for some sticker shock as property values across the country have risen 53%; the average home value has increased by 41% while commercial properties, including apartments, are up 77% on average. The county expects homeowners to receive their new property tax value in mid-January.
Charleston Region Home Showings Have Dropped
During the month of October, home showings decreased by 15.2% around the Charleston area. According to the Charleston Trident Association of REALTORS, this is the steepest decline in the past year. But the low turnout for showings is not unique to the “Holy City,” as Charleston is nicknamed. Home showings across the South are down for the first time in 12 months. The “South,” for purposes of this study, included states from Maryland to Texas. With mortgage interest rates rising to a seven-year high as of October, the decline in showings may be an indicator of buyer reluctance, according to the ShowingTime Showing Index. Another factor could be affordability, which, based on the National Association of Home Builders’ affordability index, continues to be a serious constraint for homebuyers. It’s interesting to note that although showings have declined in the Charleston region, home sales are on pace to match last year’s record sales if the last two months of 2018 are as strong as the first.
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Boak, Josh. “US new-home sales plunged 8.9 percent in October.” Web blog post. The Charlotte Observer. 28 November 2018. Web 28 November 2018.
Portillo, Ely. “New property values are coming out in a few weeks. Get ready to see a big jump.” Web blog post. The Charlotte Observer. 30 November 2018. Web 30 November 2018.
Wise, Warren L. “Home showings plummet 15% in Charleston.” Web blog post. The Post and Courier. 1 December 2018. Web 1 December 2018.