As interest rates rise, N.C. home sales decrease

JACKSONVILLE, N.C. – Rising interest rates might have cooled a once-booming housing market in North Carolina.

A new report from the National Association of Realtors reveals home sales are down for the third consecutive month, just as interest rates rose to a national average of about 4.5 percent.

“The higher the interest rate, the higher the payment and the less that the average bar can afford in a mortgage payment,” said Todd Daugherty, a real estate broker in Onslow County. “So it does create a trickle-down effect.”

Jacksonville Board of Realtors President Royce Bennett said that effect will likely mean less people looking to sell their homes, and fewer developers choosing to build ones. It’s the law of supply and demand, and less inventory means higher sale prices.

“That makes this a good time to buy a house because as things move along, inventory is going to go down, so there’ll be less selection, rates are going to go up, so it’ll cost you more to buy,” Bennett said, “So it just emphasizes that now is the time to move.”

With more people buying to take advantage of lower interest rates, that means quicker sales, more activity on the market and a brighter future for houses up for sale in North Carolina.

“If things stay good for the local market, hopefully it’ll stay good as far as the trickle down,” Daugherty said.

Interest rates are expected to continue to rise through 2014. The National Association of Realtors reports by this time next year, rates will hover around 5 percent.