Let's consider a family that is contemplating buying a home two months before their rental contract expires. They live in a two-bedroom apartment and are looking at homes in the mid-$400,000 range in Raleigh.

We will follow the numbers this family can look at in early November. Rental figures are available up to October, while the sales data is the most recent from the September MLS figures.

First, let's look at the rental market. According to the November Raleigh Rent Report from Apartment List, the overall median rent is $1,370.

By bedroom type, the one-bedroom averages $1,207, and the two-bedroom averages $1,376. Rent decreased by 0.3% over the month of October.

Compared to a year ago, this is a decrease of 0.1%. Essentially, it has been stagnant for the entire year.

In the same report, the national median rent was $1,384. It was somewhat surprising to see that Raleigh is 1.0% lower than the national average, considering the trends from a few years ago.

I believe the reason for the halt in rent increases is due to supply. Since new apartment complexes have been built throughout the Triangle, landlords feel less justified in raising rents.

For tenants, this is a time when they have leverage in renewal negotiations. If I were in their position, I would check the move-in specials at nearby new developments when I receive a rent increase notice.

Now, let's look at the sales side. According to the September report from Doorify MLS for the Raleigh area, the median sale price was $425,000.

This is a decrease of 4.5% from last September's $445,000. That's a drop of $20,000.

Transactions have also decreased. The number of closings in September was 472, down 10.1% from 525 in the same month last year.

New listings were down to 759, a decrease of 3.7%. In contrast, the total inventory on the market increased to 2,180, up 5.6%.

The fact that new listings are down while inventory is up indicates that existing homes are not selling well and are piling up. The absorption period for inventory has also lengthened to 4.1 months, compared to 3.8 months last year.

The time it takes to sell a home is 37 days, nearly the same as last year's 36 days. However, when looking at the cumulative data from January to September this year, it shows 35 days, which is noticeably longer than last year's 30 days.

The ratio of the actual sale price to the original listing price is 95.6%, the same as last year. This means that homes typically sell for over 4% less than the initial asking price.

From the numbers alone, it appears to be a favorable market for buyers. Prices have dropped, there are plenty of listings, and there is room for negotiation.

However, when we factor in interest rates, the picture changes. According to Freddie Mac's weekly survey, the average 30-year fixed mortgage rate was 7.32% as of October 22.

It had risen to 7.40% on October 8 and 15 before slightly decreasing. A year ago, on October 23, 2022, it was 6.19%.

Let's apply this to our earlier scenario. If they buy a $425,000 home with a 20% down payment, the loan amount would be $340,000.

At 7.32% for a 30-year fixed mortgage, the monthly principal and interest payment would be $2,336. This excludes property taxes and insurance, and the cents are rounded.

If we apply the same 20% down payment to last year's price of $445,000 with the interest rate of 6.19%, the monthly payment would have been $2,178. Although the home price has dropped by $20,000, the monthly payment has actually increased by $158.

I believe this calculation best illustrates the current Raleigh market. The increase in interest rates has completely offset the decrease in home prices.

On the other hand, the median rent for a two-bedroom in Raleigh is $1,376. Compared to the earlier monthly payment, there is a difference of $960.

When you add property taxes, homeowner's insurance, and HOA fees, the difference becomes even larger. If you are considering buying, it would be wise to get estimates for these three costs first.

Therefore, my judgment for this family is to not rush into a decision. Since rents are stable, it is quite reasonable to continue renting for another year while increasing their down payment.

However, if they are certain about living there long-term and have found a home that meets their school district or commuting needs, the situation changes. Now is a good time to consider asking for seller credits or a buy-down on the interest rate.

Interest rates can be lowered later through refinancing, but home prices and conditions are set at the time of contract. Buying when the negotiating power is on the buyer's side is also a strategy.

For reference, MLS figures may differ from portal figures due to regional boundaries and aggregation methods. This is why numbers from Redfin or Realtor.com can vary slightly even for the same September data.

If you have a neighborhood of interest, be sure to check reports at the zip code level. Even within Raleigh, trends can vary significantly by area.

I will summarize the October sales figures once the next MLS report is released. This month's summary is that rents have stabilized, home prices have dropped, but monthly costs have actually increased.