CHARLESTON COUNTY, S.C. (WCBD) — Mortgage rates have been on the rise over the last six weeks, and are now at the highest level since November 2000.

At the same time, data from the U.S. Census shows around 30 people are moving to the Charleston region each day, and the region’s population is growing three times faster than the U.S. average.

Right now, the average 30-year fixed mortgage rate is between 7-8%, and with many of those moving to the Lowcountry looking to buy homes, local real estate agents shared what impacts this is having on the Lowcountry housing market.

Closed home sales:

According to the September 2023 market update from the Charleston Trident Association of Realtors, closed home sales are down across the Tri-County area compared to last year.

In some areas, higher mortgage rates are decreasing demand for home buying as economic experts report home loans dropped to the lowest level since 1995 across the nation. Real estate agents also explain that prices of houses are going up at the same time.

Median sales prices

A new report from real-estate company, Redfin, said homebuyers must earn $115,000 to afford the typical U.S. home, which sold for around $420,000 dollars in August.

This poses an issue for Charleston homebuyers, as data from the 2023 U.S. Census shows the median household income in the region is $72,719 and the median home sales price in Charleston County for September 2023 was $630,000.

A 2021 Urban Land Institute report listed the Charleston region as the 28th most expensive place to buy a home in the country.

The situation is better in neighboring areas, like Berkeley County, where the median home sale price in September 2023 was $387,589, and Dorchester County, where the median price was $390,000. However, the trends show higher mortgage rates aren’t lowering home prices, as some home buyers might hope.

Homebuyers in the Lowcountry

Real estate agent Andrew Scherl said he is now seeing some buyers change their priorities when looking at homes, focusing more on the cost and less on factors like location.

“Typically that [pre-approval] number is dictating where we are shopping now, where before it was the likes, the interests, the location,” he said. “Sometimes now that number is saying ‘Hey I got approved for this much, so unfortunately the areas you really wanted to be in are probably not going to be in your budget.'”

However, realtors explain that Charleston’s housing market is unique because many people are also looking past the interest rates.

“Charleston has always been a place where people flock to, and that’s a whole other reason that specifically locally interest rates they matter, but they matter much less,” said Paul Smith, a real estate agent in the Lowcountry. “And our market is still very strong — it’s balanced, but it’s strong.”

Smith also points out Charleston’s market typically sees more buyers paying with cash to avoid high mortgage rates.

“We have incredible numbers of appreciation, so we have people from New Jersey and New York and Connecticut — Vermont — selling their homes for $1.5 million, and they come with a million dollars and Charleston seems affordable and cheap,” he said.

Skyrocketing mortgage rates can be discouraging for those who are not using cash, but realtors explain there are options.

“Interest rates are definitely an issue,” Smith said. “But there are a lot of creative incentives that are being offered by new construction and by sellers to make it still doable for buyers.”

Experts also recommend using home buyer assistance programs, opting for an adjustable-rate mortgage, or saving for a bigger down payment as tactics to lower a home buyer’s mortgage rate.