Triangle sees increased housing inventory, but higher mortgage rates lead to rising rents

Michael Perchick Image
Monday, September 12, 2022
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While some Triangle homebuyers are still making all-cash offers, there has been a marked decrease in investors swooping in to buy properties.

RALEIGH, N.C. (WTVD) -- The population boom in the Triangle shows no signs of slowing as recent jobs announcements are just one factor driving an influx of new residents.

"Part of that is Apple moving here, and more high-tech. And just the prices are so reasonable compared to California," said AnnMarie Janni, a Team Leader with Allen Tate Realtors, as she discussed people from the West Coast relocating to the area.

While Janni said some buyers are still making all-cash offers, there has been a marked decrease in investors swooping in to buy properties.

"We're seeing the lower price points, first-time home buyer, we're seeing those folks, they were always competing with investors. And now they're not, they're just competing with each other. So we're going to be able to see people able to buy houses now, which they haven't. It was frustrating for first-time home buyers for quite a while," Janni said.

Housing inventory has been a metric of focus during the past couple of years, as low housing stock has played a role in higher prices.

"We're in a better place than we were a couple months ago, but we definitely need more housing," said Janni.

According to Triangle MLS, there were nearly 2,300 more homes available for sale across the region in July 2022 compared to July 2021, nearly a 70% increase.

"Right now, we're normalizing. We're getting back into an even market. I would say we were in a seller's market for quite a while, and then the interest rates went up which kind of slowed things down a little bit," Janni said.

Year to date, the median sales price in the region is $405,000, a 22% increase from 2021. While there has been a .5% increase in new listings, closed sales are down 6.7% year-to-date.

The 30-year fixed rate mortgage average is 5.89%, more than twice as high as it was in September 2021. It's one factor that has kept some prospective home buyers on the sidelines, instead looking for rentals. However, they're finding fast-rising prices in that space as well.

A report from Rent.com found that Raleigh had the fifth highest year-over-year rental increase by percentage for one bedrooms, at 42.1%; Greensboro led the country at 74.2%. For two bedrooms, four North Carolina cities ranked in the top nine, including Durham (3rd, 54.2%), Raleigh (6th, 44.8%), Fayetteville (8th, 43.2%), Greensboro (9th, 43.1%). Raleigh and Greensboro were two of three cities nationally that saw top ten highest increases for both one and two-bedroom rentals.

"We've been receiving calls from individuals and families asking for help and assistance to stay in their rental properties, which is fairly unusual for us," said Janet Hocutt-Hairston, the Executive Chair of the non-profit Advocacy to Alleviate Homelessness.

Raleigh had the 41st highest average rent for a 1-bedroom in the country ($1,840), and the highest in North Carolina; Durham had the 40th highest average rent for a 2-bedroom in the country ($2,212), and highest in North Carolina.

Hocutt-Hairston said she'd like to see greater funding for affordable housing.

"Most of the people that I've met are hard-working individuals and families. Some work two and three jobs to try and make ends meet for their kids," Hocutt-Hairston explained.

She further called for more public transportation, which is often a key consideration for where people choose to live.