They don’t call this Hotlanta for nothing! In September 2022, Money Magazine declared Atlanta the Best Place to Live in the U.S. A vibrant Southern city with many allures, homebuyers worldwide are drawn to the City of Atlanta and surrounding suburban areas for our temperate climate, thriving business community, excellent schools, a wealth of dining and retail destinations, rich history, community-focused events, and so much more. With the advent of COVID-19, housing markets across the nation witnessed some historic changes. The same held true for Atlanta, with even more changes predicted for what remains of 2023.
With the lockdowns that accompanied a global pandemic, homeowners had an opportunity to take long hard looks at their existing homes. While some opted to go the renovation route, many started packing boxes and pored over real estate listings to find a home that approved a better fit for their family and needs. At the same time, renters considered a move into a home of their own. By Summer 2020, while many renters couldn’t afford to buy a home in the city, they found that they could afford a home further out in the suburbs – particularly since so many of them had moved to a work-from-home model and no longer had to worry about regular commutes. With such a sudden and historic rise in demand, many builders and suppliers found it difficult to keep up, creating a surge in demand for resales. Unfortunately, as Economics 101 taught us, a sharp increase in demand also drove a sharp increase in price. Whether new construction or resale, houses were suddenly selling at historically high prices.
Supply chain shortages and low inventories have made for a competitive market, which became all the more so as interest rates began to climb. According to Yahoo Finance, after three years of no rate increases from the Federal Reserve, 2022 witnessed several spikes in hopes of curbing inflation. While those interest rate hikes proved beneficial for high-yield savings account holders, it meant a subsequent rise in mortgage rates and the difference between affording and NOT affording a home for some buyers. The Atlanta Journal-Constitution reported that U.S. 30-year fixed mortgage rates reached 6.48% on January 5, 2023 – nearly 50% higher than the same rate in 2019. As a result, data from The Mortgage Bankers Association's (MBA) Builder Application Survey revealed that mortgage applications for new home purchases decreased by 3.5% in January 2023 compared to the previous year. Forbes predicts that prime rates could climb as high as 5.5% by the end of 2023, while Morningstar forecasts a steady fall back to 2% by the end of 2024.
While supply is still a challenge for builders and house hunters, signs of hope are on the horizon. With inventory levels growing faster here than in most metro areas in the nation, 11 Alive reported that some segments are beginning to see a more rapid rise in inventory than others – such as condominiums and townhomes. The station also shared that the National Association of Realtors ranks Metro Atlanta as one of the most affordable places to buy a home in the nation in 2023, and with our healthy job market, that means more people here can afford a home. Another key indicator is that we’re beginning to see a return of “Coming Soon” communities on builders’ websites, such as David Weekley Homes’ Crescent Pointe at Great Sky in Canton and Pulte Homes’ Addison Grove in Cumming.
When home-seeking in 2023, the experts at Mortgage Atlanta suggest exercising two approaches… Patience and Preparedness. Find a real estate agent who shares your dedication to patience, understands what you are looking for in a new or resale home, and embraces the challenge to get you into your new home. As for preparedness, that’s where we come in. We invite you to schedule a consultation with our team of loan specialists to discuss your needs, find your sweet spot with regard to how much home you can afford, and find the ideal loan option to fit that vision. If you’re holding off on purchasing a new home because you want to wait for interest rates to decline, don’t! We can chat about your options, including refinancing your loan when interest rates drop to more comfortable levels.
To schedule a consultation with Mortgage Atlanta, please call us at 678.564.1522, email our company president Brian Berman at bberman@mortgage-atlanta.com, or fill out our online contact form. Our office is located at 601 Woodlawn Dr. Ste 340 in Marietta. We look forward to becoming YOUR mortgage company and wish you the best of luck in your new home search!
