As temperatures soared in June, the housing market cooled — but it’s still a tough environment for first-time homebuyers of modest means.
The sales slowdown came, at least partly, because of the usual seasonal pattern as many Atlantans take summer vacations. The major brake on the housing market, however, remains persistently high mortgage rates, according to the Georgia Multiple Listing Services.
Signs of slowing are threaded through the statistics, along with the touchstones of a market that is significantly more expensive than a few years ago.
The number of listed homes now represents about three months of sales. That is about half of what experts say is a balanced market in which buyers and sellers have roughly equal bargaining power, but it is more than twice the ratio of two years ago.
Since early 2022, the number of homes listed has surged and sales have slowed. Back when listings were far fewer and sales higher, homes for sale flew off the market, but now they sit longer, according to national broker Realtor.com.
About 5,000 homes were sold last month in the 12-county core of metro Atlanta, which was about 13% lower than the same month a year ago, said Georgia MLS. The median price of a home sold in June was $432,050, which was more than 5% higher than a year ago — a modest increase compared to double-digit increases of 2020 and 2021.
Affordability is one headwind that slows sales — a problem especially for younger Atlantans early in their careers.
Inflation in various goods and services has been a problem, but prices of gasoline and groceries have largely stabilized while average wages and incomes have been rising.
However, housing is one component of inflation that has outpaced paychecks by far. The median price of a home sold in metro Atlanta has soared 56% since the spring of 2020, more than twice the improvement in incomes, according to Georgia MLS and the Bureau of Labor Statistics.
Four years ago, the median price of a metro Atlanta home was $265,000.
Worse, with the population growing and construction still trying to catch up from years of meager action after the Great Recession, the number of modestly priced homes for sale in or near Atlanta has dramatically shrunk. There are homes selling for less than $250,000 and anything toward that end of the price spectrum is snapped up quickly. The most sales last month were between $300,000 and $400,000.
The lion’s share of listings was much higher.
And if higher prices and the lack of affordable homes weren’t enough, higher mortgage rates have meant much higher monthly payments for buyers. Rates, which were at historic lows for years, climbed in 2022 and 2023 as the Federal Reserve began its campaign against inflation.
The average rate peaked last fall at nearly 8% — and that was for someone with a very good credit history. More recently, the average rate has dipped below 7%, but not by much, according to the Federal Home Loan Corp., which tracks mortgage rates.
Many potential buyers have never seen rates approaching current levels: The current rate is higher than it was between April 2002 and last fall.
Some buyers have the savings or family money to pay cash. Those who cannot pay in cash have to resign themselves to higher rates, while planning to refinance their loans when rates fall.
Someday.
Those who do not need to buy must bide their time, said broker Kristen Jones, owner of Re/Max Around Atlanta. “I believe the floodgates would open if rates dropped below 6%.”
Metro Atlanta housing market
June snapshot
Median sales price: $432,050
Number of sales: 5,004
Listed for sale: 16,686
June housing market, compared to a year ago
Median sales price: up 5.4%
Homes sold: down 13.3%
Listed for sale: up 62.8%
Source: Georgia Multiple Listing Services
