The new year’s housing market in metro Atlanta got off to its usual winter-chilled start with just about the same number of home sales in January as during the same month a year ago, according to the Georgia Multiple Listing Services.
And that was before a shiver went through the market with the rise of mortgage rates in early February.
Yet in January, the market showed signs of life, as about 3,100 homes were sold in the region’s 12-county core centered on the city of Atlanta — 0.1% more than in 2023, according to John Ryan, chief marketing officer for Georgia MLS.
The relative shortage of homes for sale continued to give sellers at least a modest advantage, which kept prices from dipping.
The median price of a home was $385,000. That was only a hair higher than the December median, but it was 6.9% above the price of a home sold the first month of 2023.
Sales are typically slow during the winter months, and this year’s weather — at least for several weeks — was somewhat colder than usual. Historically, the market picks up as winter ends and accelerates in April toward an early summer zenith.
A potential complication this year is the uncertain trajectory of mortgage rates.
Sales were depressed in the fall as rates crested at 7.79%, far below historical highs of the early 1980s, but the highest level in more than two decades, according to the Federal Home Loan Mortgage Co., which tracks rates.
January’s sales, while modest, represented a rebound.
Mortgage rates reflect, but do not usually parallel, the Federal Reserve’s benchmark rate. When the Fed lifts that rate, it raises the price of borrowing for big banks, which generally pass on that cost to their borrowers, so the changes ripple across the economy.
The Fed hasn’t revised rates since August and, with inflation quiescent, investors have been expecting a decrease soon. Then, at the January 31 meeting, the Fed’s rate-setting committee signaled plans to leave the rate elevated for some months before — presumably — lowering it later this year.
Mortgage rates on Feb. 2 jumped more than on any day in the past year, according to national housing brokerage Redfin. Immediately, there was a sharp national drop in pending sales — the initial contracts that usually lead to a home sale, Redfin said.
Broker Kristen Jones, owner of Re/Max Around Atlanta said she thinks the rate-triggered scare in sales won’t last. Rates, she believes, will drop later this year, possibly getting below 6% again, where they haven’t been since September 2022.
Moreover, most pending sales end up counting as final sales a few weeks later, so the preliminary deals made in January should show up in final sales this month and next, she said. “Higher pending sales is a good indicator that closings will be up over the next 30 to 60 days.”
Metro Atlanta* home sales
January 2024
Units sold: 3,098
Median sales price: $385,000
Active listings for sale: 11,118
Compared to January 2023
Units sold: up 0.1%, from 3,094
Median sales price: up 6.9%, from $360,000
Active listings: up 6.2%
Average mortgage rates
High, past year: 7.79% (October, 2023)
High, past 25 years: 8.62% (May 2000)
Low, past year: 6.12 (February 2023)
Low, past 25 years: 2.67% (December 2020)
Last month: 6.64% (January 2024)
Recent: 6.92% (Feb. 7)
*12-county region centered on Atlanta
Sources: Georgia Multiple Listing Services, Federal Home Loan Mortgage Co., Redfin
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