The metro Atlanta housing market left the height of the summer with falling sales, a growing pool of listed homes in the market and the hope that lower mortgage rates are coming.
About 4,800 homes were sold in the region’s 12-county core during August, down about 11% from July, as the median price of a home dipped 4% to $400,000, according to data compiled by the Georgia Multiple Listing Service.
“There is usually a seasonal slowdown in the fall,” said John Ryan, chief marketing officer for the organization. “I think the market will be steady, but we’ll see a bit of a boost if the rates come down.”
Mortgage rates, which had been at historic lows early in the coronavirus pandemic, rose dramatically in 2022 and 2023 as the Federal Reserve mounted an aggressive campaign to slow the economy and tame inflation by making it more costly to borrow. The Fed’s efforts sent mortgage rates to their highest levels in two decades.
That worked against both sides of the demand-supply equation.
Higher rates make buyers pay dramatically more each month for a loan — which convinced many potential buyers to postpone house-hunting. But elevated rates also persuade many potential sellers not to put their homes on the market if they currently have a low rate and don’t want to trade it for a new loan.
Rates are also a consideration for developers who borrow money to buy land and start construction, while trying to entice many buyers who must qualify for mortgages.
The national jobs report released Friday showed continued, but weakening, job growth, adding to expectations that the Federal Reserve is expected to start cutting its benchmark rate later this month.
That move would be welcome, said Stephen Haines, president of Acworth-based Artisan Built Homes. Artisan has Atlanta-area developments in Hapeville, Villa Rica, Dallas and Cumming.
“Would we be OK if they don’t? Yes,” he said. “We would be OK if the rate goes the other way, but we’d be better if it drops.”
While rates can push buyers to downsize their search, there’s more than economics driving people to purchase homes, Haines said: Babies are born, older children leave home, some couples divorce, some partners die.
Those factors exist no matter what the Fed does, he said. “Interest rates don’t sell homes. Life changes sell homes.”
When rates climbed, it was a shock. But as time passed, people stopped comparing them to the historically low rates, so a dip in rates is attractive, Haines said.
“We have seen a lot more people looking recently,” he said. “We think there’s pent-up demand.”
The average 30-year mortgage rate as of Thursday was 6.35%, the lowest it has been since February 2023, according to Freddie Mac, which buys mortgages in the secondary market.
Even a modest decline makes a big investment more attractive, according to Denisha Traylor and Jarrell Hughley, who bought a home in Atlanta three years ago, but have been looking to move up.
The couple settled on a new home being built in Douglasville.
“I want a yard, I want a little more land,” said Hughley. “The lender only needs a 2% down payment and we are jumping on that right now.”
They’re under contract and waiting before locking in a mortgage rate, Traylor said. “Since rates have been going down, we want to wait.”
For potential sellers, too, falling rates are an enticement.
In August, nearly 18,000 homes in the 12-county Atlanta core were listed for sale, according to Georgia MLS. That is about 4% higher than in July and more than 60% from the same month a year ago.
While higher prices make homes less affordable, increased numbers of listings take the steam out of increases. Meanwhile, lower rates can cut monthly payments.
So a first-time buyer, a nurse, working with broker Torrence Ford, owner of Re/Max Premier in Cobb County, had been in the hunt for a house for six months and was stymied, partly because she was approved only for a $200,000 loan. But more homes on the market gave her more options and better prices, and as rates dipped, her lender approved her for a $300,000 loan.
She picked out a home in Conyers, Ford said. “She is now happily under contract.”
About the Author
