CHARLOTTE, N.C. — As national mortgage rates soar to nearly 8%, housing demand in Charlotte remains high, according to a loan officer.

Similar demand continues in Raleigh and in towns along the coastline, according to the same loan officer.

What You Need To Know

  •  Average, 30-year fixed rate hovering at just under 8%, according to NerdWallet

  •  Demand is still high in North Carolina cities like Charlotte and Raleigh

  •  Mix of new residents, first-time homebuyers and non-motivated sellers creating demand, loan officer says

“This is no doubt the highest. This is the highest [the rate’s] been in 23 years. So, not very many folks have seen it,” Patrick Laraway said.

Laraway is in his 15th year of originating mortgage loans in the Charlotte area. Laraway is licensed in both North and South Carolina. 

“It’s no doubt a payment shock or just an interest rate shock of, ‘Whoa, how did we get to interest rates close to 8%, or 8%. Or, even high 7s.’ And, that trickles down into what people’s monthly payments are looking like,” Laraway said about the current mortgage rate market.

Financial advising website NerdWallet says the 30-year fixed rate mortgage average is just under 8%. 

On the typical $400,000 Charlotte home, the rate increase in the last year, from 5% to just under 8% adds about $650 a month to mortgage payments, according to Laraway. The increase was calculated on a $400,000 home with a down payment of 10%. 

“I mean this has been 12-plus months of pretty high interest rates, so the big shock isn’t there,” Laraway said. “I think more folks are surprised when they see a No. 7 or No. 8.”

Despite the increase in the last 12 months, it’s doing little to stop demand in Charlotte, Raleigh and towns along the coastline. 

“Charlotte is an anomaly, we haven’t seen big price decreases. I believe our year-to-date average is a 7% appreciation in the Charlotte area, our average home price has gone up to $400, $450 [thousand],” Laraway said.

People still want to leave high-priced city rentals, while existing homeowners do not want to sell, for fear of losing their original lower-rate loan. Add in thousands of new people moving to the state, and you get the soaring demand, according to Laraway. 

“It’s not demand like COVID, that was unprecedented. We still have a demand for housing. There’s a housing shortage in Charlotte. Meaning, there are not enough houses to meet the demand of everybody moving here,” Laraway added. 

Client response is a mixed bag for Laraway’s team at LendScout by American Security Mortgage. The current rates are a surprise to many first-time homebuyers, who have not seen rates this high in their lifetimes, Laraway described. Meanwhile, older homeowners say the current rates are nothing compared to the rates seen in the 1980s and 90s, but homes were often much cheaper, Laraway added. 

There is some good news for buyers. Laraway said the current market is creating the first advantage for them since before the pandemic. Sellers are offering better deals on closing costs and other incentives, to combat higher monthly payments, he said. Additionally, new home builds will help alleviate some of the demand. 

“This is kind of unprecedented,” Laraway said. “Average home price $400,000 with a 7-8% interest rate, it’s gonna hurt.”