Home sales

Rising mortgage rates shake up Atlanta home sales in August

Many young professionals are tenants, so when they buy, most leave apartments, leaving a vacant home for a potential buyer. And if they rented a house, the landlord may just want another tenant.

Additionally, many older homeowners aren’t ready because zoning restrictions in much of the region have limited options for downsizing baby boomers. Many municipalities make it difficult to build townhouses, condos, apartments, and even single-family homes smaller than a certain size.

“Despite historically high prices, my generation is not unloading their homes because there is nowhere to go,” hunt said. “The inventory is so low – that’s what makes the difference.”

More than 12,400 homes were put up for sale last month, up slightly from July, according to Georgia MLS.

While that number is higher than a year ago, it’s still significantly lower than in a pre-pandemic market in which buyers and sellers have roughly equal bargaining power, according to industry experts. lodging.

Moreover, the balance between demand and supply is different in different regions and at different price levels. The most expensive homes are fairly common, but listings for cheaper and more affordable homes in the Atlanta metro area are becoming increasingly rare.

The number of homes for sale at $500,000 or more is the highest in more than two years, said Kristen Jones, broker and owner of Re/Max around Atlanta. “But the inventory of homes under $300,000 is 62% of what it was in August 2019.

So the more expensive the house, the less a seller can count on a bidding war between potential buyers, said Emily Wheeler, chief operating officer of Village Premier Collection, a network of real estate agents.

“In the $400,000+ market, we’ve seen lots of price reductions and more sellers contributing to buyers’ closing costs. Anything under $300,000 is still contracted fast,” she said.

Another reason for the scarcity of homes for sale is that rising mortgage rates have given homeowners a reason not to sell.

The Federal Reserve’s campaign to tame inflation with higher borrowing costs was largely responsible for raising rates from an average of less than 3% at the end of last year to 5.81 % at the beginning of summer. These rates fell below 5% in July and early August, prompting some buying, but then started to climb again. At the end of last week, the average 30-year mortgage hit 5.89%, its highest level since late 2008.

At 5%, the monthly mortgage payment for a $400,000 home, after a 20% down payment, would require a payment of approximately $2,000 per month. A 6% mortgage would require about $200 more per month.

“The market has seen a big shift over the past month,” Wheeler said. “More listings are coming to market, but more buyers are waiting to buy because they’re not comfortable with where the market is heading.”

30-year average mortgage rate

Summer high: 5.89% (September 8)

Summer low: 4.99% (August 4)

Last year’s high: 5.89% (September 8)

Last year’s low: 2.86% (September 16, 2001)

Previous pre-pandemic peak: 18.5% (October 1981)

Previous pre-pandemic trough: 3.32% (November 2012)


Metro Atlanta Real Estate Market*, August

Sales: 6,186

Median sale price: $394,000

Active registrations: 12,428


Metro Atlanta real estate market*, August vs. prior year

Sales: down 21.3%

Median selling price: +16.2%

Active ads: up 59%

*Area of ​​12 counties

Sources: Federal Reserve Bank of St. Louis, Federal Home Loan Mortgage Corp., Georgia Multiple Listing Service