Charlotte region growth strains affordable housing stock

ADOBE STOCK

Housing affordability continues to lose ground to demand across the Charlotte region according to the State of Housing 2024 report by UNC Charlotte researchers.

Charlotte’s rapid growth is putting additional stress on the region’s affordable housing stock.

With more than 471,000 people moving to the region from 2014-23, including 49,000 from 2022-23 – roughly the population of Huntersville – workforce housing isn’t keeping up in terms of units or affordability, according to the State of Housing 2024 Report published by UNC Charlotte researchers. That growth paired with a shortage of available housing and high interest rates means a shortfall of housing that low- and moderate-income people can afford.

The sixth annual report by the UNCC’s Childress Klein Center for Real Estate was released Nov. 20 at the State of Housing in Charlotte Summit at the Center City campus. The study draws upon six data sources that consist of owner-occupied, rental, and subsidized housing in Mecklenburg, Cabarrus, Gaston, Iredell, Lincoln, and Union counties in North Carolina and Lancaster and York counties in South Carolina.

“House prices have increased very quickly in Charlotte in recent years, making Charlotte housing increasingly unaffordable,” said Yongqiang Chu, the study’s primary author and a UNCC professor. “While the market has cooled significantly since COVID-19, there are no signs of significant price declines in the near future. The significant slowdown in construction during the last two years and the easing monetary policy will put significant upward pressure on house prices going forward. Much needs to be done to achieve housing affordability.”

The report found:

• House price growth stabilized at a lower rate than during the COVID-19 pandemic but is still rising. Median home prices in the region increased from $414,360 in September 2023 to $429,945 in September 2024.

• Housing supply is catching up. The Charlotte Metropolitan Statistical Area detailed a surplus of 5,000 units in 2023.

• Availability remains tight with the number of median days on the market still less than 20.

• Affordable housing is hard to find. Only 2% of houses sold for under $150,000, and about 19% sold for under $300,000 in 2024.

• Affordability is better than last year because of falling interest rates. A family income of $138,000 is needed to afford a median-priced house in 2024 compared to $152,000 a year earlier.

• Rents have fallen in 2023 and 2024 due to multifamily apartment construction in recent years.

Homeownership remains elusive for Black people. In Mecklenburg County, the rate is 43% compared to 68% for white households. The North Carolina rate is 47% for Black people – significantly better than in Mecklenburg – compared to 75% for white households.

Nationally, the Black homeownership rate is 45.7%, compared to 74.3% for their white peers. The peak Black ownership rate was 49% in 2004.

Jim Carr, author of the State of Housing In Black America report and an appraisal bias study, contends market forces work against Black households and even initiatives like down payment assistance may not help.

“If you put together a good down payment program, but there are no houses for you to buy, it won't matter,” he said. “If the prices are so high and you compete against the vast investors, the down payment won't help you because they don't need an appraisal,” he said at the National Association of Real Estate Brokers Black Wealth Summit in Atlanta.

“They don't need to have an inspection; they pay cash, so you're not in the game. Even if you've got everything going for you in your neighborhood, you show up, and they charge you based on risk-based pricing. All of a sudden, you're paying more than your white counterparts.”
 

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