The Charlotte real estate market continues to hold up surprisingly well, but buyers are certainly facing some headwinds.

Mortgage rates are back above 7%. According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year fixed mortgage rate reached 7.03% on September 24, compared with 6.30% a year ago. [freddiemac.com]

Meanwhile, we’re moving into the seasonally slower part of the real estate year.

August single-family home sales in Mecklenburg County fell 17% from July, while the average sales price declined about 7%. Those sound like big drops, but both sales activity and prices typically soften as summer ends and we head toward winter.

Year over year, the picture is much steadier. The average sales price of $686,638 was still about 3% higher than last August, while the median price of $520,000 was essentially flat.

Inventory Is Worth Watching

One number that has my attention is housing supply.

Mecklenburg County is now at approximately 3.3 months of supply, the highest level since 2016.

That’s still a relatively balanced amount of inventory, but it’s a noticeable change from the extremely tight market we’ve experienced for years. More inventory means buyers have choices and sellers face more competition.

And affordability is certainly getting tougher. Buyers are combining today’s home prices with 7% mortgage rates, while also dealing with higher costs throughout the rest of their household budgets.

So I suspect we’ll see a quieter and more price-sensitive market over the next few months as higher rates, affordability and normal seasonality all work together.

That isn’t necessarily a bad thing. A market with more inventory gives buyers some breathing room, while sellers with well-priced, desirable homes can still find plenty of demand.

The interesting question heading into the end of the year is how consumers respond. The stock market remains strong, yet the average household is feeling noticeably more pressure in the pocketbook.

For Charlotte real estate, I’ll be watching inventory, sales volume and affordability. Those should give us a good indication of where we’re headed as we move into winter.

And as always, here’s a summary of the stats for single family homes in Mecklenburg County in August compared to the previous month and again to the same month last year:

• Home sales are down 17% from last month and 4% from last year.
• Average sales price is down 7% from last month and up 3% from last year.
• Median sales price is down 2% from last month and even with last year.
• Average price per square foot is down 2% from last month and up 4% from last year.
• Sale to list price ratio at 98% is down from 99% last month but even with last year.
• Average time on market is up 16% from last month and up 10% from last year.
• Pending sales are down 6% from last month and 9% from last year.
• Supply is up 5% from last month and 22% from last year.
• Mortgage rates at 7.03% are up from 6.67% last month and from 6.26% last year.
• Average house payment is down 5% from last month and up 10% from last year.

You can always find the detailed stats on our website here.