The Charlotte market is giving buyers something they haven’t had much of lately: choices

There is an interesting tug-of-war happening in housing right now.

Mortgage rates remain stubbornly elevated, but the Charlotte housing market is simultaneously becoming friendlier to buyers. Translation: borrowing isn’t cheap, because apparently the economy enjoys keeping everyone humble, but buyers have considerably more leverage when negotiating the actual real estate transaction.

The latest complete monthly data from Canopy MLS shows 13,082 homes available across the 16-county Charlotte region in June, up 5.6% from a year earlier. Supply reached 3.6 months, while pending sales jumped 8.7% year over year. Closed sales were essentially flat, increasing 0.2%.

More recent weekly data reinforced the trend. For the week ending July 18, Charlotte-region inventory was 13,631 homes, up 8.6% year over year, while pending sales increased 10.7%.

That’s an important combination: more homes to choose from without buyer demand disappearing.

Mortgage rates: don’t expect the Fed to magically fix them

The Federal Reserve held the federal-funds target range at 3.50% to 3.75% on July 29, citing inflation that remains above its 2% objective.

Mortgage rates aren’t set directly by the Fed, but inflation expectations, Treasury yields and broader bond-market conditions have an enormous influence on them.

The latest MBA survey available shows an average contract rate of 6.76% for a conforming 30-year fixed mortgage, with jumbo loans averaging 6.70% and FHA loans 6.41% for the week ending July 24. Those survey rates include specific assumptions regarding points and loan-to-value, so they should be viewed as market benchmarks rather than a quote available to every borrower.

The Federal Reserve’s July Monetary Policy Report also described the prevailing 30-year fixed mortgage rate at about 6.4% as of July 1, while noting that most outstanding mortgages remain below 4%. That’s one reason existing homeowners remain reluctant to sell and surrender those extraordinarily low rates.

What does that mean for Charlotte buyers?

It means waiting exclusively for a dramatically lower mortgage rate may not necessarily be the best strategy.

If rates eventually fall, affordability improves, but something else happens too: more buyers can jump back into the market.

Today’s higher-inventory environment may allow buyers to negotiate things such as seller concessions, closing-cost assistance, repairs, purchase-price reductions or temporary rate buydowns.

That can sometimes create a better overall financial outcome than simply chasing the lowest advertised interest rate.

Charlotte isn’t suddenly a buyer’s market

This distinction matters.

At 3.6 months of supply, Charlotte is still well below the roughly six months generally associated with a balanced housing market.

So I wouldn’t characterize Charlotte as a full-blown buyer’s market.

I’d call it a better buyer’s market than we’ve had in years.

There are more choices and more negotiating opportunities, but desirable homes that are priced correctly can still move quickly.

For buyers, preparation still matters.

First-time homebuyers should look beyond the interest rate

A first-time buyer doesn’t necessarily need 20% down, and today’s financing landscape offers considerably more flexibility than many consumers realize.

Depending on eligibility and property type, we can evaluate conventional financing, FHA loans, VA loans and available down-payment strategies.

The right question isn’t simply:

“What’s the rate?”

It’s:

“Which combination of rate, closing costs, down payment and monthly payment gives me the strongest overall deal?”

A seller willing to contribute toward closing costs or a temporary rate buydown can materially change that calculation.

FHA and VA buyers may have opportunities

Government-backed financing remains particularly relevant when affordability is tight.

FHA financing can offer lower down-payment requirements and more flexible qualification standards for eligible borrowers.

For eligible veterans and active-duty service members, VA financing can provide tremendous advantages, including the possibility of financing without a down payment and without monthly private mortgage insurance.

And with Charlotte inventory improving, FHA and VA borrowers may find sellers more receptive to their offers than they were during the bidding-war insanity of several years ago.

Conventional and jumbo borrowers should compare structures, not just rates

For conventional and jumbo borrowers, the cheapest-looking rate isn’t automatically the cheapest mortgage.

Points, lender credits, temporary buydowns and anticipated holding period all matter.

Interestingly, MBA’s latest survey showed jumbo rates averaging 6.70%, slightly below the 6.76% conforming benchmark.

That illustrates why borrowers shouldn’t assume one financing category will automatically be more expensive than another.

We can compare several structures side-by-side before deciding where your money is best spent.

Should homeowners refinance right now?

For someone holding a 3% or 4% mortgage, probably not simply for the thrill of obtaining a shiny new mortgage.

But refinancing isn’t exclusively about lowering the interest rate.

It can make sense when a homeowner wants to consolidate higher-interest debt, eliminate mortgage insurance, restructure the loan, change the term or access equity.

The correct way to evaluate a refinance is with a break-even analysis:

How much does the transaction cost, how much does it save each month, and how long will you realistically keep the new loan?

If the math doesn’t work, don’t refinance. Revolutionary concept, apparently.

A HELOC may make more sense than refinancing a low-rate first mortgage

The “rate-lock” phenomenon creates another opportunity.

If you already have a low first-mortgage rate but need access to equity for renovations, investment, education expenses or debt consolidation, a HELOC or second mortgage may allow you to access that equity without replacing your entire first mortgage.

The Federal Reserve specifically noted that the majority of outstanding mortgages remain below 4%, which helps explain why this strategy remains so relevant.

Real-estate investors have options too

Traditional conventional financing isn’t the only game in town.

For investors, DSCR loans can potentially qualify a rental property based primarily on its cash flow rather than the borrower’s traditional personal income.

That can be particularly useful for borrowers building rental portfolios or purchasing investment properties in Charlotte and throughout North Carolina.

Self-employed? Don’t assume your tax return tells the whole story

Business owners frequently discover that aggressive but perfectly legitimate tax deductions reduce the income appearing on their tax returns.

That can create headaches with traditional mortgage underwriting.

Bank statement loans may provide another route by evaluating qualifying cash flow through bank deposits rather than relying solely on traditional tax-return income.

It’s not appropriate for everyone, but for the right self-employed borrower it can solve a problem that a traditional bank simply can’t.

The takeaway for August

Charlotte’s housing market is in a surprisingly interesting position.

Inventory is increasing. Buyer negotiating power has improved. Demand remains healthy. Mortgage rates remain elevated.

That’s not necessarily a bad market.

It’s a market where strategy matters more than headlines.

A buyer who negotiates the purchase correctly, selects the appropriate loan program and preserves cash intelligently can potentially come out considerably better than someone who sits on the sidelines waiting for a mythical “perfect” mortgage market.

And if rates improve substantially later?

We can evaluate refinancing when the numbers actually make sense.

Let’s Create Your Leverage

At Leverage Lending Group, we compare financing strategies across conventional, FHA, VA, jumbo, HELOC, DSCR, bank statement and other mortgage programs to help borrowers choose the structure that fits their actual goals.

Main Office: 704-631-9276
Direct: 704-248-8742
Email: info@lendwithleverage.com
lendwithleverage.com

Loan programs, rates and eligibility are subject to borrower qualification, property eligibility, underwriting requirements and market conditions. Market rates cited above are industry survey averages and are not an offer to lend.