The smaller gains came despite low mortgage rates, good job growth, upbeat consumer sentiment and relatively low household debt levels. Those are all factors that typically fuel a spate of home buying.
But the price of homes, which crashed after the burst of the housing bubble in 2006 and 2007, has been rising steadily since 2012. Because wages and salaries have risen less, homes are becoming less affordable.
That dynamic also is playing out here. Since the housing market started rebounding seven years ago, metro Atlanta home prices have averaged 6.6% annual increases. That is more than twice as fast as wages have grown during that time.
“Buyers have hit a breaking point in what they’re willing to pay, even with low mortgage rates and even in places where incomes are high,” said Matthew Speakman, an economic analyst with Zillow.
Even now, with price hikes slowing and the economy still cruising along, home prices are going up faster than wages. Recent data show the median wage increasing about 3.6% during the past year, according to Federal Reserve Bank of Atlanta data. The metro Atlanta housing market has increased more than that every month since the fall of 2012, according to Case-Shiller.
Nationally, Las Vegas had the largest price hike in the past year, at 8.2%.
Key to the higher prices in metro Atlanta is an imbalance between buyers and sellers, said Jeff LaGrange, a vice president with Re/Max. Inventory, a measure of that balance, is down 5% from a year ago. That has propped up prices amid fewer sales overall, he said.
Yet the market in metro Atlanta is far from even. Home prices in Cobb County have slipped 1% in the past year, according to Re/Max. In DeKalb, prices are up 8%, and Fulton has seen a 7% rise.
In the city of Atlanta, which includes sections of counties, the median home price has soared 16% in the past year, according to Re/Max. Prices in neighborhoods from Old Fourth Ward to Ansley Park have seen several years of steep increases as growing numbers of affluent buyers pick the city over the suburbs, triggering expensive new construction or renovations.
Metros with fastest home price growth over year
Las Vegas: 8.2%
Portland, Ore.: 6.1%
Source: S&P CoreLogic Case-Shiller Index
Average metro Atlanta home price changes
Past year: 4.7%
Past three years: 17.3 %
Past five years: 31.8%
Since 2012: 81.6%
Source: S&P CoreLogic Case-Shiller Index, AJC research