The recent analysis from the Federal Reserve Bank of Atlanta’s Home Ownership Affordability Monitor (HOAM) reveals a significant decline in homeownership affordability across North Carolina since 2019. The HOAM Index evaluates the capacity of a median-income household to afford a median-priced home, taking into account factors such as sales price, principal and interest payments, property taxes, homeowner’s insurance, and private mortgage insurance. An index value of 100 or above indicates affordability for a median-income family.
From January 2019 to January 2025, all 15 metropolitan areas in North Carolina experienced declines in the HOAM Index values. This trend aligns with a nationwide decrease in homeownership affordability, where the index dropped from 98 in January 2019 to 64 by January 2025.
In early 2019, most metropolitan areas in North Carolina had index values above 100. Only Wilmington, Durham-Chapel Hill, and Asheville were below this threshold. By contrast, by early 2025 only Rocky Mount remained slightly above the affordability threshold; all other metro areas fell below it. Asheville recorded an affordability score of just 55 in 2025, marking it as the least affordable market statewide. Hickory-Lenoir-Morganton, Greensboro-High Point, Winston-Salem, and Burlington showed the most significant declines.
This data indicates a shift from a scenario where median-income households could afford homes across much of North Carolina to one where such opportunities are largely limited to one area. Factors contributing to this change include historically low interest rates during the pandemic that initially increased purchasing power but later rising mortgage rates outpaced incomes while housing prices stayed high.
The implications are broad: reduced homeownership affordability can affect local labor markets as workers may be priced out of living near employment centers. It also limits wealth-building opportunities for renters aspiring to buy homes and discourages current homeowners from moving due to higher costs associated with upsizing or relocating. These factors exacerbate existing housing supply issues in North Carolina.
Overall, declining homeownership affordability presents challenges not only for individual households but also for economic stability and mobility within the state.
