Today’s Mortgage Rates in North Carolina

If you’re thinking about buying or refinancing a home in North Carolina, you could be in for some good news. Homebuyers who opt to purchase property in this state will get access to housing prices that are well below the national average. When those low prices are paired with the historically low interest rates we’ve seen in early 2021, new homeowners stand to save a lot of money across the board.

If you’re on the fence about buying in this state, now is the time to act. Mortgage rates tend to fluctuate, and there’s a chance they will increase in the near future. Housing prices in North Carolina are also expected to rise over the next several years, so if you’re trying to save on your home purchases, it could be wise to move quickly. Here’s what you need to know about rates and the market in this state.

Mortgage Rates in North Carolina

Mortgage rates across the nation have reached all-time lows over the past year. Due to the hit the economy sustained by the COVID-19 pandemic, the Federal Reserve slashed interest rates early in the pandemic, and mortgage rates fell in tandem. Mortgage rates have consistently fallen since then, through the final quarter of 2020 and into 2021.

As of the second week of January, the average rate for a 30-year fixed-rate mortgage in North Carolina was 3.00%. The average rate on a 15-year fixed-rate mortgage was 2.44% during that time, while the average rate on a 5/1 ARM was 2.25%. These rates are extremely low, but keep in mind that your credit score and unique financial situation will determine what rates you’re eligible for.

It’s tough to know where rates will be in the near future. As the economy fluctuates throughout the year, mortgage rates will likely change with it. That said, experts generally agree that rates are likely to increase in the near future.

[ Read: How to Calculate Your Mortgage ]

North Carolina mortgage rates overview

Homebuyers in North Carolina will be met with relatively low housing prices across the board. While this is good news for those looking to buy in this state, it’s important to note that housing prices have consistently increased in recent years. The average home price in the state has increased by about $80,000 in the last five years alone, and it is only expected to keep rising.

North Carolina homeowners have plenty of loan types to choose from when buying a house, and some offer lower interest rates than others. The common mortgage types in North Carolina include:

• Conventional mortgage: These loans are available with either fixed or adjustable rates and terms ranging from 15 to 30 years.
• FHA loan: These loans are backed by the Federal Housing Administration to help low- to moderate-income families buy a home.
• VA loan: VA loans are backed by the Department of Veterans Affairs to help current and former military members buy a home with no down payment.
• USDA loan: USDA loans are backed by the US Department of Agriculture to help fund home purchases by rural, low- to moderate-income homebuyers in qualifying areas.

First time home buyer programs in the state of North Carolina

The North Carolina Housing Finance Agency offers several programs to help first-time homebuyers in the state buy a house. These programs include:

• The NC Home Advantage Mortgage — This program provides eligible borrowers with fixed-rate mortgages with down payment assistance.
• The NC 1st Home Advantage Down Payment — This program provides first time buyers and military veterans up to $8,000 of down payment assistance. The $8,000 down payment assistance comes in the form of a 0% deferred second mortgage loan, which is forgiven 20% per year at the end of years 11-15, with complete forgiveness at the end of year 15.
• The NC Home Advantage Tax Credit — This program allows eligible first-time homebuyers and military veterans to save up to $2,000 on their taxes with a mortgage credit.

[ Read: First-Time Home Buyer Programs and Grants ]

Most and least expensive places to live in North Carolina

North Carolina residents generally enjoy housing prices below the national average. While prices are increasing, especially in the most expensive cities, affordable housing is available throughout the state.

Least expensive places to buy real estate in North Carolina

When it comes to home purchases, there are plenty of cities in North Carolina where you can buy real estate at an affordable price. The numbers below reflect the typical home value for homes in the 35th to 65th percentile range.

With the exception of Fayetteville, most of North Carolina’s most affordable cities have low populations and are outside of large metro areas when compared to the state’s other populous areas. Most of the cities on this list can be found in the central part of the state.

The least expensive areas to buy a home in North Carolina include:

1. Fayetteville, NC: Average home price of $111,100
2. Lexington, NC: Average home price of $113,200
3. High Point, NC: Average home price of $114,700
4. Statesville, NC: Average home price of $120,700
5. Gastonia, NC: Average home price of $121,900

Most expensive places to buy real estate in North Carolina 

When it comes to the most expensive areas in North Carolina to buy real estate, the home prices are still pretty affordable compared to the rest of the nation. All of the most expensive cities in North Carolina have moderate population sizes, and many of them neighbor more metropolitan areas.

For example, Chapel Hill and Apex sit outside the large cities of Durham and Raleigh, respectively.

The areas where it’s most expensive to buy real estate in North Carolina include:

1. Chapel Hill, NC: Average home price of $358,000
2. Cary, NC: Average home price of $336,400
3. Apex, NC: Average home price of $315,400
4. Asheville, NC: Average home price of $251,100
5. Mooresville, NC: Average home price of $247,000

North Carolina mortgage rates compared to the national average 

Real estate prices in North Carolina as a whole fall well below the national average. While the average home price nationwide is $263,351, the average North Carolina home price is $220,710. Even the most expensive cities in the state offer housing prices comparable to or lower than you’d find in the most affordable cities in other states.

North Carolina also has lower mortgage rates than most of the nation. As of the first week of January, North Carolina’s average rate was 0.04% below the national average. As a result, homebuyers in the state will pay less in total interest over the life of their mortgages.

Already own a home and want to refinance?

If you already own a home in North Carolina, you can still take advantage of the historically low interest rates in this state. Homeowners in North Carolina can save a lot of money over the life of their loan by refinancing for a lower rate.

Mortgage refinance rates in the state are competitive with the rates on other mortgage loans. As of the second week of January, the rate on a 30-year fixed-rate refinance loan was 3.02%, just slightly above the national average of 3.01%.

If you want to refinance your mortgage, take time to shop around with a few mortgage lenders and see where you can get the best rate. Run the numbers to decide whether it would be worth refinancing in your situation.

[ Read: How to Refinance Your Mortgage ]

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