Why Home Prices Are Defying Gravity: The Three Forces Driving Appreciation into 2025

Despite higher mortgage rates cooling national sales volume, home prices continue rising across the U.S.—and Coastal North Carolina remains one of the strongest regions. This upward trend is not a speculative bubble. It’s the result of long-standing structural forces that keep supply limited and demand constant.

Major forecasters like Realtor.com and Fannie Mae project 3%–4% home price appreciation in 2025 nationally, with fast-growing markets like New Hanover, Pender, Onslow, and Brunswick counties often outperforming that baseline.

1. The Inventory Lock-In Effect

The most powerful force behind rising prices is the severe shortage of homes for sale—largely caused by homeowners who refuse to give up their low mortgage rates.

The “Golden Handcuffs” Phenomenon

• Over 60% of U.S. mortgages are locked below 4%.
• Moving would require trading that payment for a new mortgage at 6.5%–7%.
• Most owners simply won’t make that swap, so they stay put.

This decision removes millions of potential listings from the market, pushing inventory to historically low levels.

The New Construction Gap

• Builders have underbuilt every year since 2008.
• Population growth far outpaces new housing supply.
• Rising costs for materials, labor, and land push new-home prices higher, lifting the entire market.

Even with active building in Southeastern North Carolina, construction cannot keep up with migration and household formation.

2. Unrelenting Demand from Key Demographics

Higher mortgage rates have reduced some buyer activity—but not nearly enough to cool prices.

The Millennial Wave

The largest generation in U.S. history is now in its 30s and early 40s—prime buying years. Their sheer numbers create a constant demand floor.

Migration to Affordability

Coastal NC remains a top destination for buyers relocating from expensive regions. These buyers often bring large equity gains with them, making them less sensitive to interest rates and more capable of bidding aggressively.

Renters Pushed Toward Buying

Rents have climbed dramatically. Many renters view locking in a fixed mortgage payment as a smarter long-term financial strategy than absorbing yearly rent hikes.

3. Economic Resilience and Investor Activity

Broader economic conditions and investor behavior continue to support price growth.

The Wealth Effect

• A strong stock market increases down-payment power.
• Homeowners with large existing equity can upgrade despite higher rates.

Real Estate as an Inflation Hedge

From large institutions to small landlords, investors see real estate as a reliable hedge. This consistent investor demand adds another layer of competition.

Anticipated Rate Cuts

Even the expectation of future rate reductions keeps demand firm. Buyers plan to purchase now and refinance later, creating steady pressure under prices.

Aspyre Realty Group: Your Knowledge-Based Partner

Coastal North Carolina’s appreciation is driven by structural, not speculative, forces—low inventory, demographic momentum, and investor confidence. Understanding these dynamics is essential whether you're buying, selling, or investing.

At Aspyre Realty Group, we track every rezoning application, monitor new home inventory from national and local builders, and analyze infrastructure plans. We're experts in helping you navigate the real estate market because of this knowledge, showing you exactly how these forces shape values in your neighborhood.