Buying a home in North Carolina’s red-hot market isn’t for the faint of heart. With bidding wars and all-cash offers becoming the new normal, buyers have to get creative in their approach to make their offer stand out.

While the coronavirus pandemic has had a clear impact on prices and helped throw off the balance between supply and demand, the reason the market is so hot right now cannot be blamed solely on it. Here are three factors driving up home values:

 Supply and Demand

The price of a home is tied to the supply and demand in the market. When there are fewer houses available, buyers will bid higher to snatch the property. The uncertainty brought about by the pandemic has made folks more reluctant to list their homes, while others deliberately took their homes off the market fearing the spread of coronavirus due to open houses and walkthroughs. Add to the mix the trend of Americans moving to North Carolina – most noticeably from Northeastern states – demand has been off-the-chart.

Low-Interest Rates

Due to falling mortgage rates, the cost of borrowing money to purchase a home has steadily dropped. First-time homebuyers, such as millennials, have jumped at the opportunity to take advantage of the rates while they last. In addition, many people are choosing to refinance their mortgages at lower rates rather than looking for a new home in such a competitive market.

Building Materials

Costs of building materials, like lumber, have surged this year and fueled prices for new homes. Random-length lumber prices have more than tripled since April 2020. The National Association of Home Builders said the lumber price surge is adding $24,000 to the average price of a newly built home.

Is there anything that The Sharpe Mortgage Team can do for you this week? If you’re interested in purchasing a home or refinancing your current home in Winston-Salem or the surrounding areas, give us a call! We can discuss your financial goals and discuss a loan program that might be right for you.