If you’ve been watching mortgage headlines, you’ve seen the same line on repeat: rates are easing. Freddie Mac’s weekly survey shows the 30-year fixed hovering near 6.5%, the lowest average of 2025 and the best since last fall. Homes.com covered the slide earlier in August, and fresh updates since then have reinforced the downtrend. Yet even with better financing math, demand hasn’t snapped back—mortgage applications fell again in late August and the last week of the month. In plain English: rates are softer, but a lot of would-be buyers are still sitting out.
Here in the Charleston area, the market is behaving like much of the country—inventory is rebuilding, and homes are taking longer to place under contract than they did a year ago. July data from the Charleston Trident Association of REALTORS® (CTAR) show active listings up 16.5% year over year and months’ supply up to 3.5 (from 3.1), with days on market up to 45. Prices are largely holding—median up ~1% YoY to $430,000—but the direction of travel on supply is unmistakable.
Nationally, the inventory picture looks similar. NAR reported 1.55 million homes for sale in July—+15.7% versus a year earlier—and Realtor.com’s trackers show active listings up ~20–25% year over year through late August, marking more than a year and a half of consecutive growth. Translation: buyers have more choices than they did in 2023–2024, even if we’re still not fully back to 2019 levels. National Association of Realtors
So why the buyer hesitation despite better rates and more selection?
1) Affordability is still stretched. Prices didn’t drop while rates were high—they mostly plateaued at elevated levels. Harvard’s Joint Center for Housing Studies notes that home sales fell to multi-decade lows amid a historic affordability squeeze, with prices up roughly 60% since 2019 and ownership costs outpacing incomes. Even with a 6-handle on rates, the payment on a typical home remains heavy, which is why you’re hearing more buyers say they’re waiting for something starting with a “5” before jumping back in.
2) The “lock-in” effect hasn’t vanished.
Millions of owners still sit on sub-4% or sub-5% mortgages. Academic work from the FHFA shows that for each percentage point today’s rate exceeds an owner’s original rate, the probability they’ll sell drops markedly—a textbook lock-in. Redfin’s analysis finds the share of owners with rates below 6% remains very high, even if it’s slowly shrinking. Fewer would-be sellers list, and the ones who do tend to be needs-based (life events, job moves), not “let’s-see” listers—muting the kind of churn that usually energizes buyers.
3) Insurance and carrying costs weigh more, especially near the coast.
Beyond principal and interest, homeowners are absorbing higher insurance premiums (property + wind + flood in many coastal zones). A 2025 JCHS summary points to rising insurance and tax burdens, and South Carolina’s own insurance market review documents coverage challenges in coastal communities—factors that push total monthly cost up even if the rate ticks down. Locally, Risk Rating 2.0 for flood policies has also changed how some premiums are calculated. Buyers do the math; some opt to wait.
4) The data says activity is tepid right now.
Mortgage applications—our best near-real-time demand proxy—declined in the last two weekly reads. National existing-home sales showed only modest improvement in July, and pending contracts slipped slightly month-over-month to close out the month. Momentum isn’t rolling over, but it isn’t roaring ahead either.
What does that mean for Charleston-area sellers? You’ll likely see more showings spread over a longer window, and pricing cleanly to today’s comps matters more than ever. CTAR’s July print shows percent of original list price received softening and days on market rising—classic signs of a market that rewards turnkey presentation and accurate pricing over “test the ceiling” strategies. If your home shines and is positioned well, it still sells; it just may not sell at last year’s speed.
For buyers, this is the first genuinely choice-rich moment we’ve had in a while—without a bidding-war culture on every block. Realtor.com’s weekly reads show active listings up ~20% year over year nationwide, and Charleston’s own months’ supply has crept higher. If rates do drift lower into the fall, competition could return quickly; locking a home now with seller credits toward closing costs (or a rate buydown) can be a smarter play than trying to time a perfect rate that everyone else is also waiting for.
A quick reality check on payments
Even at 6.5%, payments aren’t light. MarketWatch pegs a median-priced home financed at today’s rate near $2,700–$2,800/month (before insurance/taxes/HOA), which is still a stretch for many households. That’s the uncomfortable math behind the “rates down, sales not surging” puzzle. MarketWatch
What I’m telling clients right now
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Buyers: Prioritize total monthly cost, not just the headline rate. Ask your lender to model 2-1 buydowns and permanent buydowns, and we’ll hunt for seller concessions in listings with 20+ days on market. If you own a home now, we’ll compare a sell-then-buy versus rent-then-buy path to avoid double payments.
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Sellers: The market is rewarding move-in-ready. Pre-list punch lists, inspections, and intelligent pricing get you to “yes” faster. Be open to closing cost credits or rate buydowns—they can widen your buyer pool more than a small price cut.
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Everyone: Insurance matters. Before you fall in love with a property, let’s quote all policies (home, wind/hail, flood) so there are no surprises at underwriting.
Charleston specifics to watch into fall
Inventory momentum: July showed 5,167 active listings (+16.5% YoY) and 3.5 months’ supply. If we cross into the 4–5 months range, expect more normal negotiation dynamics (contingencies, repairs, credits) across most price points. CTAR MLS Public Stats
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National backdrop: NAR’s 1.55M active listings (+15.7% YoY) suggests we’ll keep seeing more selection even if rates drift sideways; Realtor.com still shows consistent YoY inventory growth week-by-week.
Rates: Freddie Mac’s index is the cleanest “one-number” to watch weekly. If we break meaningfully below 6.5%, you’ll likely feel showing traffic pick up. If we print a 5-handle, expect a busier Q4. Freddie Mac
Bottom line (and how I can help)
We’re in an unusual moment: rates lower, selection better, demand cautious. For some, that’s the sweet spot—less competition and more leverage on terms. For others, affordability or insurance math says “not yet.” If you’d like a calm, data-driven read on your block—whether that’s Park Circle, West Ashley, Mount Pleasant, or the islands—I’ll map the comps, model payments (including insurance), and build a plan to buy or sell without drama.
By: Dustin Guthrie, Realtor
