Mungo Homes expands to Charlotte with lower-priced homes

A veteran South Carolina home builder will go low in a bid to beat high interest rates with its first-ever foray into Charlotte.

Columbia, S.C.-based Mungo Homes will aim to keep prices low and draw first-time buyers as it makes the metro area its 10th market, a roster that ranges from its hometown to Raleigh/Durham and Richmond, Virginia, the Charlotte Observer reported. 

The relative affordability of the residential market in the Charlotte metro has combined with steady population growth, which convinced Mungo Homes to expand into the area despite the recent hikes in interest rates from a long run of historic lows through the pandemic.

“The job growth here is excellent — the migration is usually near the top nationwide,” Matt Kearns, Mungo’s lead development manager, told the outlet. “The big appeal of the Charlotte metro area is the relative affordability. One of our strategies as we enter the market is to target that first-time home buyer.” 

That will require land buys and designs that can lower the cost of development and take some of the sting out of borrowing costs.

Home mortgage interest rates are hovering around 7 percent, more than double the average for 30-year loans just a few years ago. The higher rates bring significant increases in monthly payments for home buyers.  

Mungo Homes plans to achieve some offsets through density allowances for town homes at sites within the City of Charlotte. It plans its first project, called Sloan Station, in west Charlotte, and another, Lakeview Village, on the north side of the city. 

The two projects will combine for nearly 100 units, with uniform designs bringing more savings on development. Units will have similar looks, prices from around $300,000 to $350,000. They will range from 1,250 to 1,700 square feet, with three bedrooms, two-and-a-half bathrooms, and one-car garages.

Charlotte is affordable compared to major metros like New York or Los Angeles, but its home prices have increased rapidly since the pandemic, outpacing many other Sun Belt markets. The average price increased from $331,000 in January 2021 to $479,000 last month, according to Chad Hendrix of Hendrix Properties. That’s an increase of nearly 45 percent in three years.

Middle-income housing affordability is emerging as a significant challenge in Charlotte. Last September, families needed an annual income of $152,000 to afford a median-priced home, according to the Childress Klein Center for Real Estate at the University of North Carolina at Charlotte.

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