Homes For Sale In Charleston SC: Interest Rates Remain Low

Homes For Sale In Charleston SC: Golden Opportunity For Buyers

If you are searching homes for sale in Charleston SC, there are many good reasons to buy sooner than later. Home ownership offers many advantages over renting, many of which I have covered before.

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One of the biggest advantages is the fact that you will lock in your monthly housing payment for 30 years.

You will pay the same for as long as you own your home.

If you rent, you can count on that payment going up in the upcoming years because rents will continue to rise.

Locking in that payment at today’s numbers offers a big advantage for home buyers. That’s because interest rates for mortgages continue to remain close to their all time lows.

A recent Freddie Mac article “Mortgage Rates: Still The Deal Of The Century” basically sums up the current market with this statement:

“If you are in the market to buy a home, today’s average mortgage rates are something to celebrate compared to almost any year since 1971.”

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30 year fixed rates are currently under 4%, around 3.75% to 3.89%. A year ago they were closer to 4.25%-4.30%.

To put these numbers into historical perspective, here is a chart showing the average interest rate for the previous decades.

Freddie Mac first started tracking interest rates in 1971.

Since then, the highest point came in November 1981 with an interest rate of 18.63%. The low point was in November 2012 at 3.31.%. As you can see, we are much closer to the all time low.

To better understand what all this means, the Freddie Mac article shows what the monthly principle and interest payment would look like for a $200,000 mortgage under the different rates:

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One thing buyers need to be aware of is that interest rates are projected to increase over the course of the rest of the year.

No one can say for certain just how much, but most industry analysts expect them to rise by half a point to over a full point.

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These are the latest projections from Fannie Mae, Freddie Mac, The National Association of Realtors, and The Mortgage Bankers Association.

Another factor that buyers of homes for sale in Charleston SC need to be aware of is rising home prices.

The most recent Existing Home Sales Report from The National Association of Realtors shows that March home sales increased from February by 6.1%.

Compared to March of 2014, home sales increased by 10.4%. Overall, home prices have increased by 7.8%.

homes for sale in charleston sc      

While this can be good news for buyers, it can also wind up costing those who wait. Buyers can buy with confidence, knowing we are in a strong, appreciating market.

However, either rising interest rates or rising home prices by themselves could lead to buyers losing buying power. Together, they can price many would be buyers out of the market.

The graph below perfectly illustrates this. In this scenario, a buyer wants to keep their mortgage payment around $1400/month and they are shopping for a $300,000 home.

Notice how as the interest rate (on the left column) increases, in order to keep the roughly $1400/month mortgage payment the same, the price of the home (bottom column) decreases.

This just takes into account a rising interest rate, and does not factor in rising home prices. Add that to the equation and you can imagine how much more quickly a buyer can lose purchasing power.


homes for sale in  charleston sc

With the current interest rates, there really shouldn’t be a rent vs. buy debate. Fact is, you will likely spend less on a mortgage than you would with rent in today’s current market.

Home owners have had an advantage over renters for many years in the fact that they typically spend less of their monthly income on monthly housing payments than do renters.

That is even more the case in the current market.


homes for sale in charleston sc


Historically, home owners spent 22% of their monthly income on housing, while renters spent 25%.

Today, home owners enjoy a nearly 15% advantage over renters–spending only 15.3% of their monthly income as opposed to 30.1% by renters.



So, What’s Holding Buyers Back?

By the looks of the numbers, nothing is really holding buyers back. Buyer demand is out strong, and the numbers back that up. It seems first time buyers are out as well.


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 Recent numbers from the First Time Buyer Mortgage Share Index show that 50% of all home buyers in February were first time home buyers.

Pending Home Sales increased their year-over-year numbers for the 7th month in a row, and are at the highest level since June 2013.

So it seems there isn’t anything holding back the buyers. However, one additional factor could impact buyers besides rising rates and rising prices: inventory.

Inventories across the country remain low. Buyer demand far exceeds supply. This not only means a limited supply for buyers, but it also means the best homes sell fast. Many buyers are seeing other buyers beat them to the house they want, or they are experiencing multiple offer situations.

Besides the inconvenience, a lack of inventory helps fuel rising home prices. It’s simple supply and demand.

What’s Going On With Homes For Sale In Charleston SC?

Much of what we are seeing with the national numbers apply locally as well. Home sales are up, prices are up, and we are lacking inventory.

So, all of what I’ve laid out in this post applies to people searching for homes for sale in Charleston SC.

Here’s a look at home prices over the last year for the entire Charleston MLS:

The Average Sales Price in Charleston hit $301,307 in April. That is not quite at the peak number we hit in 2014, which happened in June with an Average Sales Price of $315,050.

That is the highest number we have seen since August of 2007 at $318,038.

So, interest rates are near their historic lows and home values in Charleston are close to the highest we have seen in years.

Buyers searching for homes for sale in Charleston SC should know that right now is a golden opportunity to buy.

The longer you wait, the more it will cost you. It could even costing you the chance at owning a home.

If you are buying a home and would like to search the Charleston MLS, then visit my Pam Marshall Realtor website.

You can sign up to have a free list sent to you that is continuously updated with the hottest, newest listings that match your search criteria.

You can also download Buyers Guides, and learn more about the home buying process through my blog and videos.

If you are thinking about selling, then make sure you hire the right agent to get your home sold. Learn more at my Pam Marshall Realtor sellers page.

If you want to keep up with the latest market statistics for homes for sale in Charleston SC, then visit my Charleston SC Real Estate stats page.

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