FAYETTEVILLE, N.C. (WTVD) -- The latest weekly report from the Mortgage Bankers Association found that mortgage applications decreased 11% last week for the first time in weeks. The news partially signals home sales may finally be slowing.
It's an outlook echoed in a report issued by Zillow on Thursday.
Zillow predicted home sales will be down 6.4% in 2022 compared to 2021. The report cited "spiking mortgage rates, inventory gains, and lower-than-expected pending home sales and mortgage applications" as contributing factors to the predicted outlook.
However, in Fayetteville, Keller Williams Realtor Blair Eastman-Priester said she hasn't experienced a drop in demand.
"Our market is pretty steady, especially being that we have Fort Bragg here; that keeps us pretty stable," she said.
She said though increasing mortgage rates have started to cause some challenges for certain buyers, they aren't yet making a dent in the demand.
"We have not had clients say 'You know what? The rates just went up, I've changed my mind.' That's not the case. They still actually need a home," Eastman-Priester said.
She said lack of inventory is the leading issue for buyers in Fayetteville.
There are 50% fewer homes on the market in Fayetteville now than compared to April 2020, according to Zillow data for the Fayetteville market. Even in the last year, available houses have decreased by 12% according to Zillow.
New residential permits filed in Cumberland County show around 160 new homes being built since January; this is a 43% increase in the number of permits filed between September and December 2021.
"There's just there's so much demand that to replace the inventory levels is a true challenge. Because every time you list the house is sold as you build it. You're not getting inventory that's sitting on the ground. So it's not that you have more, there's not enough supply to still meet the demand," said Ben Stout, who runs Ben Stout Construction in Fayetteville.
Stout builds residential homes and said this year he has had double the number of homes under contract than in 2020, but it's not enough to level supply and demand.
"One of the mentors that I deal with quoted the Tale of Two Cities, it is the best of times, and it was the worst time. It's the greatest time to ever sell a house and the hardest time to ever build a house," Stout said.
Supply chain issues continue to plaque builders' ability to quickly get a home on the market.
He said HVAC and cabinet supplies are some of the top issues impacted by the supply chain at the moment.
"We foresee the next few years as being very, very good but still challenging in trying to get some of this stuff done," Stout said. "We think the market is still going to continue like this for some time."
The latest NAHB/Wells Fargo Housing Market Index (HMI) showed while homebuilders are still positive about the future, their positive outlook has been waning since January. The index also reported a decrease in the traffic of prospective buyers throughout 2022.
However, Stout said he is still optimistic about the Fayetteville market.
"We still find there is going to be plenty of market and opportunity moving forward, but no relief around the corner," he said.