Atlanta Housing Seals Summer with Good News
For the second month in a row, the Atlanta residential real estate index rose 0.1. The Cal-Culator now stands at 6.9 – the highest recorded number ever for the index. Home sales, prices, rates and an increase in first-time homebuyers propelled the index forward, even though lack of inventory continues to plague the nation.
Home Sales and Prices
According to the National Association of Realtors, national home sales dipped in August 4.8 percent from the previous month, following three straight months of gains. Lawrence Yun, NAR chief economist, attributes the dip to the “summer theme of tight inventory” which deterred buyers.
However, Atlanta home sales increased a respectable 8.4 percent in August from the previous year, according to the Atlanta Board of Realtors. ABR also announced average and median home sale prices are continuing to gain traction. The median sales price in August was up 2.3 percent from last year and the average sales price was up 6.6 percent from the previous year.
“Overall housing market conditions remain positive and on track with a normal, seasonally based market,” said ABR President Ennis Antoine.
Along with inventory, another factor that has been significantly hampering the job hunt is first-time homebuyers, a traditional catalyst for the market. The percent of first-time buyers is steadily increasing, however – now 32 percent, up from 28 percent in July and 29 percent last year.
Rates continue to be historically low and declined to 3.91 percent in August after rates rose to above 4 in July for the first time since November 2015, according to Freddie Mac’s average commitment rate for a 30-year conventional fixed-rate mortgage. Even if rates rise, its not expected to negatively hamper the industry.
“When the Federal Reserve decides to lift short–term rates, likely later this year, the impact on mortgage rates and overall housing demand will likely not be pronounced,” says Yun. “With job growth holding steady, prospective buyers can handle any gradual rise in mortgage rates — especially if today’s stronger labor market finally leads to a boost in wages and homebuilding accelerates to alleviate supply shortages and slow price growth in some markets.”
Despite all of the bright spots in the housing industry this month, inventory continues to pose a problem. Atlanta area housing inventory increased just 2 percent from last year and decreased a staggering 14.4 percent from the previous month, according to ABR.
“With sales and overall demand higher than a year ago and supply mostly unchanged, low inventories will likely continue to limit options for those looking to buy this fall even with the overall pool of buyers shrinking because of seasonal factors,” said Yun.
The next Cal-Culator will be released November 10 and will give a look into how the Atlanta housing market will fare during the colder months.