We have seen many changes in the market since the Federal Reserve began raising its policy rate rapidly earlier this year. The average 30-year mortgage has seen an increase from 3.41% in early January to 6.3% at the time of this writing. This has had a huge impact on sales volume, as buyers are more inclined to wait out the storm and hope for lower rates in the future before buying.
What is the impact of these rising rates? If we take the median year-to-date sale price of $620,000 for Hatteras Island properties and assume a standard loan of 20%, that’s a big difference on the principal + interest portion of a mortgage payment:
- If you bought at the January 3 rate, the principal + interest would be $2,202.42 per month.
- If you were buying at today’s rates, principal + interest would be $3,070.11 per month.
It is a difference of $867.69 per month! It is the purchasing power that has evaporated over the course of 2022 so far. Mortgage rate hikes have dampened the volume of sales, but house prices are not falling. Let’s check the August 2022 statistical report from the Outer Banks Association of Realtors to see where things stand.
We are still well below pre-Covid inventory levels, and we actually have less inventory than we did last year during a very hot real estate market. This is one of the factors that keeps the upward pressure on prices – the lack of homes available for sale.
Total sales volume is down from 2021 so far, but still ahead of what has been happening since the start of 2020. It’s still a very active market.
Hatteras Island Statistics
Things are still moving fast, with the average number of days on the market for a property being less than half of what it was last year. Median home prices have increased significantly compared to 2021, and you can see a similar trend in sales volume on Hatteras Island compared to the entire OBAR area – less sales volume than last year , but still ahead of 2020, which has been a very busy year.
If you want to see the full report, you can view it monthly on the OBAR website:
Thanks for reading and happy fall fishing!
About the Author: Stephen Smith is an Outer Banks Realtor with Coldwell Banker Seaside Realty. He was recognized in 2021 as one of the top 10% Coldwell Banker agents in the world. He has lived on the Outer Banks for nearly 20 years and met his lovely wife on Hatteras Island. They currently reside in Nags Head with their daughter, but Hatteras Island is still home in many ways. For any questions on the Hatteras real estate market or larger OBX, you can contact Stephen directly at email@example.com or 252-216-9230. His website is https://www.stephensmithobx.com or you can receive his weekly newsletter by subscribing to https://mailchi.mp/43cd4a4bf1a6/obxnewsletter.