Looking to relocate to the Tar Heel State? Join the club. Based on recent U.S. Census Bureau data, North Carolina gained 140,000 new citizens between July 2022 and July 2023, the fifth-fastest growth rate in the country.

As you can probably guess, high demand for housing creates a competitive housing market. While residing here offers the perks of gentle winters and balmy summers, predicting the affordability of a home in this Southeastern hub isn't as straightforward. Here's what to know about how much it costs to buy a house in North Carolina.

How much does it cost to buy a house?

The median sale price for a North Carolina home was $384,500 in May, according to Redfin data. That's 3.3 percent up from the same month last year, and more than a quarter of the homes sold (27.2 percent) went for above list price.

But prices can vary significantly depending on where in the state you're looking to buy. For example, in Charlotte the median in May was $428,000, while in Winston-Salem it was just $271,000. And keep in mind that beachfront property can run much higher: The median in Bald Head Island, for instance, was $832,500.

It's important to understand how a home's price impacts monthly mortgage payments. According to Bankrate's mortgage calculator, if you assume a 30-year loan with a 7.00 percent interest rate and a 20 percent down payment, the principal and interest payments on a median-priced $384,500 home would come to $2,046. On a $428,000 Charlotte home, that goes up to $2,278, and on an $832,500 home in Bald Head Island, it soars all the way up to $4,431. And on top of that, you'll have to factor in the price of property taxes, homeowners insurance and HOA fees (if any).

Down payment cost

A substantial initial down payment means you're borrowing less, which decreases your monthly expenses over time. Contrary to popular belief, it's not always necessary to put down a full 20 percent of the home's price. Qualified borrowers can put down as little as 3 percent for a conventional loan, or 3.5 percent for an FHA loan, and some loans require no down payment at all if you meet the criteria. However, a 20 percent down payment will typically allow you to avoid an additional monthly fee for private mortgage insurance.

The down payment can be daunting for many buyers -- 20 percent on a median priced $384,500 home is about $77,000, a significant sum to have in savings. But North Carolina offers several assistance programs that can help cover down payment costs, especially for first-time homebuyers, and it's well worth checking to see if you qualify.

Closing costs

According to a 2024 analysis from Assurance, North Carolina ranks among the least expensive states in terms of closing costs, averaging approximately 1.57 percent of a home's sale price. On a median-priced $384,500 home, that comes out to around $6,000.

But the buyer isn't solely responsible for covering these expenses; closing costs are typically divided between both parties involved. For buyers, typical closing costs include fees related to the mortgage loan, and for services like a home appraisal and inspection (each likely amounting to a few hundred dollars).

Closing costs can be a lot to cover upfront, especially in addition to the down payment. But it's important to also make sure you have some funds left in your bank account for regular maintenance and unexpected emergencies. Lenders like to see a cash reserve so that you have a cushion in case anything goes wrong.

Cost of moving

Don't forget that, once you have a new home, you're going to need to get all your belongings there somehow. If you're just moving to a different area within the state, your relocation budget might not seem too intimidating: Hiring a pro for a local move costs an average of $1,694, according to HomeAdvisor. If you're going long-distance or cross-country, though, that price will go up considerably. And if you're moving into a bigger space than you had before, there may also be the cost of additional furniture to consider.

Homeownership costs

Once you actually own a home in North Carolina, there will be a variety of ongoing maintenance costs to consider. Here are some of the most common costs of homeownership and upkeep:

Property taxes: Property tax rates vary by state, and according to 2023 data from ATTOM, North Carolina boasts a relatively low annual rate of 0.6 percent. Applying this rate to a median-priced $384,500 home, your property taxes would run about $2,300 per year.

Homeowners insurance premiums: It's vital to protect your property with homeowners insurance, and securing a policy will almost certainly be required by your mortgage lender. The cost will depend on many factors, including the specific location of your home, but North Carolinians can expect to pay about $2,495 for $300K in dwelling coverage.

HOA fees: If your residence falls under a homeowners association, there will be regular HOA fees to pay. The amount of these can vary widely depending on the amenities and services provided by each community.

Reducing the costs of buying a house

Consider these strategies to reduce your expenses:

Negotiate for seller concessions: Despite North Carolina's bustling housing market, sellers might still be willing to negotiate. Requesting assistance covering repairs or closing costs couldn't hurt, and such requests are often honored to keep the deal moving along smoothly.

Choose a smaller home: While a sprawling beachfront house may be your ultimate dream, it may not fit your budget at the moment. Consider smaller, more affordable properties for now, like condos or townhouses, to start building equity sooner rather than later.

Expand your search area: Your ideal neighborhood might be out of reach, price wise, but try looking at some of the areas immediately surrounding it. Expanding your search to more budget-friendly neighborhoods can get you much more for your money.

Improve your credit score: Lower mortgage rates go to those with higher credit scores. If you spend some time paying down your debt and upping your score before you buy, you could qualify for better loan terms.

Be patient: High mortgage rates reduce your buying power, but rates rise and fall all the time. Waiting things out for a while in the hopes that rates decrease could result in significant savings (but, of course, there are no guarantees).

Next steps

If you're pondering a move to North Carolina, a local real estate agent can provide crucial assistance. The market here has unique characteristics, so having a knowledgeable guide is essential. Look for an agent with experience in the exact kind of home and location you're hoping for, and interview several candidates until you find someone who's a good fit.

FAQs

What is the average house cost in North Carolina?According to Redfin data from May 2024, the median sale price for a home in North Carolina is $384,500. That means half the homes that sold in May went for more than that price, and half went for less.

What are typical closing costs in North Carolina?For North Carolina homebuyers, typical closing costs include various fees related to the mortgage loan, such as credit check, loan origination and escrow fees, as well as the cost of services like a home appraisal and home inspection. Buyers may or may not need to pay their real estate agent's commission as well, depending on the terms of the deal. And if you hire a real estate attorney, legal fees will be part of your closing costs as well.