Home sales jumped as they usually do in March, but were still much lower than a year ago, held back by higher interest rates and a shortage of homes for sale.
In the 12 counties centered on Atlanta, 5,525 homes were sold last month, an increase of 33% from February, but about 20% fewer than the same month a year ago, according to Georgia Multiple Listing Service.
“We are going into the active season,” said John Ryan, chief marketing officer for Georgia MLS. “But you throw in interest rates and you throw in uncertainty about the economic situation that we are in and there are some headwinds.”
Inventory — the number of homes listed for sale — is 78% higher than it was a year ago. But that represents only two months of sales, which is far below the ratio in a balanced market in which sellers and buyers have roughly equal bargaining power, Ryan said.
The rise of interest rates over the past year has crimped the buying power of any purchaser who cannot pay cash and has also persuaded many homeowners not to sell, since it would mean moving to a higher rate in their next home.
Those rates — while not set by the Federal Reserve — do respond to changes in the Fed’s base rate, which has been climbing for 16 months.
Higher rates are meant to curb inflation by slowing the economy. However, the apparent ebbing of inflation and some signs of a weakening labor market could mean an end to the interest rate hikes.
Some experts say mortgage rates have peaked.
“If interest rates have peaked, that would be very good,” Ryan said. “If there is a narrative with interest rates down and more inventory coming on to the market, we would see a more active market.”
The median sales price of a home sold in the 12 core counties of metro Atlanta last month was $375,980.
The overall market has already seen modest improvement, said Reponzell Morris, associate broker at Re/Max Around Atlanta. “A year ago it was very challenging with so many people in the marketplace and inventory so low.”
Yet the better balance between supply and demand is the result of fewer buyers as well as more sellers, she said. “There’s new construction, new homes. But with interest rates higher, some people have been disqualified from getting a mortgage.”
Metro Atlanta housing, March snapshot
Median price: $375,980
Number of sales: 5,525
Number of listings: 9,485
Metro Atlanta housing, March compared to a year earlier
Sales price: -0.8%
Number of sales: -19.7%
Number of listings: +78.9%
Metro Atlanta housing, March compared to February
Sales price: +0.9%
Number of sales: +33.4%
Number of listings: -1.0%
Average 30-year, fixed-rate mortgage rate
Pre-pandemic high: 18.63% (Oct. 9, 1981)
Pre-pandemic low: 3.23% (April 11, 2013)
Last year’s peak: 7.08% (Nov. 10, 2022)
Recent peak: 6.73% (March 9, 2023)
Current: 6.2% (April 6)
Source: Georgia Multiple Listing Service, Freddie Mac, Federal Reserve Bank of St. Louis
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