Updates · Mecklenburg
Charlotte Rent Is Easing, but Buying a Home Still Costs More Each Month
Charlotte rents are flat and apartments sit empty, but a 7.24% mortgage keeps buying out of reach. Here is how Idea 1 would lower the monthly payment.
Rent in Charlotte is easing. Buying a home is not. That gap matters for every family trying to stop renting and start building equity. Here is what the latest numbers show, and how one of our eleven ideas would help.
Charlotte rents are flat or falling
Renters have a little more room this fall. Apartment List says Charlotte's median apartment rent was $1,378 in September, 2.6% lower than a year earlier. It also found that 9.4% of units in the buildings it tracks were open for rent, the highest share since its index began in 2017.
A Q3 report from the real estate firm Matthews found the same trend. Apartment vacancy in the Charlotte area rose to 6.0%, and fewer new renters moved in than a year earlier. Realtor.com puts Charlotte's October median rent for all rentals at $1,740 a month, down about 2% from last year.
Buying still costs far more each month
Home prices have barely moved. Realtor.com reports a median sold price of $420,000 in Charlotte in October, down 1% from a year ago. Homes took a median of 63 days to sell.
The problem is the loan. Freddie Mac says the average 30-year fixed mortgage rate was 7.24% on October 29. That is down a bit from the week before, but a year ago it was 6.17%.
Here is a simple example. Say a family buys a $420,000 home with 20% down and borrows $336,000. At 7.24%, principal and interest comes to about $2,290 a month. At last year's 6.17%, it would have been about $2,051. Compare that with a $1,740 median rent, before taxes, insurance and repairs. This is our own math for illustration, and your rate and costs will differ.
So many Charlotte families can rent more cheaply than they can buy, even though owning is how most families build wealth.
One idea: lower the monthly payment, and build more homes
Idea 1, Lower Home Payments and Build More Homes, goes straight at that monthly gap. A buyer who qualifies could get a second loan for up to 35% of the home's value. That loan would have no interest and no monthly payment. When the home is sold, the buyer repays the loan plus a share of the home's gain in value.
Using the same $420,000 home, suppose a buyer puts 20% down and uses a 30% second loan. The regular mortgage would then be $210,000, which is about $1,431 a month at 7.24%. That is our own rough example, not a promise of savings.
The plan also calls for more starter homes and a first chance for renters to buy from large landlords. With so many apartments sitting empty, helping renters become owners is a practical next step, and more homes keep the help from simply pushing prices up.
There is a real tradeoff. The buyer gives up part of the future gain in exchange for a lower payment now. These are draft ideas, not current law.
Tell us what you think
Would a lower monthly payment help your family move from renting to owning? Vote yes, no or not sure on Idea 1, and add a private comment if you like. Visitor votes are not a scientific poll, but they show us which ideas people actually want.
If you care about costs like these and have ever thought about public service, our Run for Office page explains how to start.
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