In a sign that long-spiraling home prices across South Carolina may be leveling off, the median cost of a house across the state climbed less than 1 percent in February, the smallest percentage increase in almost a decade.
The figure rose 0.6 percent last month to $300,000, about $1,700 more than last February and $102,000 more than in 2019, the year before the COVID-19 pandemic sent the housing market on fire, according to preliminary data from the S.C. Realtors Association.
It's the smallest increase since August 2014.
Home costs have not declined across the state since October 2012, when the median price edged down 0.1 percent to $149,900, half of the cost of a house last month.
Home sales slid nearly 28 percent in February compared to the same month a year ago as 5,764 homes changed hands statewide. The fall in sales has occurred 15 consecutive months.
Lower sales and nearly flat prices are the result of higher borrowing costs, persistent inflation and low inventory, according to industry officials.
"Prices are stabilizing," said Rob Woodul, president of S.C. Realtors and an agent with Carolina One Real Estate in Charleston. "I think we will continue to see that."
He said the increase in mortgage interest rates during the past year also has given would-be buyers pause before they jump into, for many, the biggest purchase of their lives.
"They are being more selective, and they want to make sure they can afford it," Woodul said.
He also noted most homeowners locked in at low interest rates before the Federal Reserve's spike began about a year ago to tame inflation, and many people are reluctant to take on higher debt in a new home.
"It's going to have to be something special to give that up," Woodul said.
As for sales, every submarket in the state except one reported double-digit percentage declines, with some of the bigger metropolitan markets sliding more than 25 percent from a year ago. The Pee Dee area showed a 9 percent dip.
Charleston, the state's largest market by volume, posted a 26 percent drop in closings. Myrtle Beach, the second-largest, slipped 25 percent. Columbia saw a decline of almost 28 percent while Greenville was down 12 percent.
Hilton Head slid nearly 24 percent, while nearby Beaufort dipped 28 percent.
As for median prices, the state's three largest metropolitan areas posted increases of zero to 3 percent last month. Greenville held steady at $290,000 while Columbia was up about 2 percent to $254,500, and Charleston climbed 3 percent to $375,500.
Myrtle Beach saw a surge of almost 11 percent over the same month a year ago. Hilton Head showed a 3.2 percent rise, and Spartanburg reported an 11 percent climb in home prices.
Across the state's 16 submarkets, only Aiken saw a decline in median home prices of 2 percent to $259,000.
Hilton Head continued to post the highest median price at $475,000. Beaufort ranked second at $386,000 while Rock Hill, in the growing suburbs of Charlotte, came in third at $385,000.
Charleston slipped to fourth highest in median price, followed by Myrtle Beach at about $310,000.
Several submarkets reported median prices between $250,000 and $300,000, including Anderson, Columbia, Greenville, North Augusta and Spartanburg. Those between $200,000 and $250,000 were regional offices in Florence, Greenwood, Orangeburg and Sumter. Gaffney held the lone price below $200,000.
Interest rates play a huge role in the housing market, and they have been edging down during the past couple of weeks because of turmoil in the banking industry.
Home loan financier Freddie Mac reported March 23 the average rate on a 30-year, fixed-rate mortgage slipped to 6.42 percent. The average rate on a 15-year note dipped slightly to 5.68 percent. Both rates were between 3.5 percent and 4.5 percent at this time last year.
Sam Khater, Freddie Mac's chief economist, attributed the decline in rates to instability in the financial sector, and he pointed to increased purchase demand as home prices became more stable.
"If mortgage rates continue to slide over the next few weeks, look for a continued rebound during the first weeks of the spring homebuying season," Khater said.