Zillow published an analysis last week which predicted that Charlotte would have the “hottest housing market in 2023” due to strong projected home value growth and demographic trends. And while the housing market has cooled significantly in recent months in response to higher interest rates, Charlotte is in a position to weather the storm better than most other markets.
Zillow projects that the market will add about 6% more households in 2023, behind only Austin in terms of household growth, providing continued demand despite higher mortgage costs. This prediction follows decades of strong regional growth, largely from people moving here from other parts of the country. About 75% of the population growth in 2021 in the Charlotte metro was from domestic migration with the remaining from international migration and natural increase (births – deaths).
Source: US Census Bureau, 2010-2020 evaluation estimates; 2021 population estimates.
While in-migration has helped the Charlotte metro be one of the fastest growing large metros for years, the population growth rate has been declining since 2016. However, recent population estimates at the state level signal that this trend of slower population growth may have changed in 2022. Both North and South Carolina saw faster population growth rates in 2022 than any year in the previous decade, including the peak years of 2015-2016, largely due to increases in net migration. Both states saw large jumps in international migration and South Carolina saw about 25% more domestic migration than the previous year.
Charlotte Metro population growth rate if return to the peak of the previous decade.
Source: US Census Bureau, 2010-2020 evaluation estimates; 2021-2022 population estimates.
If the population growth rate rebound occurred in the Charlotte metro as it did at the state level, the region will have grown faster than it has for years. For example, a return to a 2% growth rate in 2022, last seen during the mid-2010s, would mean the metro added 54,000 people, or 75% more than in 2021 (31,000). While the population estimates at the county and metro level will be released in March and will reveal whether this trend extends to the Charlotte metro, the state-level estimates point to a higher growth rate in 2022 than the relatively slow rate in 2021.
As the Charlotte metro saw a larger drop in 2021 than either state, and the influence of the pandemic was still very present during the 2022 sample period (July 1, 2021 – July 1, 2022), uncertainty remains on whether the Charlotte metro will have seen the same bump in 2022. However, strong employment growth during the period along with familiar quality of life and cost of living factors that have attracted residents for decades support the idea of a jump in population growth following 2021. As the region continues to add more people, perhaps at a faster rate than we have seen in recent years, demand for housing will continue to make the market competitive for buyers.
