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A daily look at the most significant and interesting stories affecting Atlanta. Written by Kristal Dixon and Thomas Wheatley.

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The housing market appears to be cooling off nationally, and it looks like that trend is replicating in Atlanta. 

Why it matters: Any relief from sky-high home prices is welcome, especially as mortgage rates creep up.

Atlanta's median home sales price was $350,000 in January, up just 1.5% from last year and down 3.3% from December.

Inventory was up 41% from last year, but down 9.16% in January.

Homes sat on the market for 11 days on average in January, up 32 days from last year.

Zoom out: Nationally, median home sales prices have crept up 1.3% from one year ago.

The national median home sales price in January was $383,000.

Sales fell for the 12th month in a row, according to the latest from the National Association of Realtors.

As demand falls, homes sit on the market a little longer, which gives buyers a little more room to negotiate.

What’s next: Spring, which is typically marked by high demand, more competition and higher home prices, is right around the corner.

If spring 2023 follows typical trends, we should expect home prices to rise again in the near future.

Yes, but: Experts predict 2023 will see a far less frantic housing market than in 2022.

The bottom line: We're starting to see a moderate market correction, but home values aren't falling. 

This turnaround in Atlanta is sorely needed as many renters don't make enough money to buy a starter home.

Median home sale prices drop in metro Atlanta

Any relief from sky-high home prices is welcome, especially as mortgage rates creep up.

The housing market appears to be cooling off nationally, and it looks like that trend is replicating in Atlanta. Why it matters: Any relief from sky-high home prices is welcome, especially as <a class="gtmContentClick" data-vars-link-text="mortgage rates creep up" data-vars-click-url="https://www.freddiemac.com/pmms" data-vars-content-id="2f0dd463-e9f5-4bc9-83de-d9727d4b2647" data-vars-headline="Median home sale prices drop in metro Atlanta" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.freddiemac.com/pmms" target="_blank">mortgage rates creep up</a>.

Real Estate

Data: Redfin; Chart: Alice Feng/Axios Visuals

Nearly 60% of homeowners with mortgages in Georgia have a rate below 4%, per Redfin data shared with Axios.

That's locking homeowners in place and leaving buyers with few homes to choose from.

Why it matters: Mortgage holders are experiencing the "golden handcuffs" phenomenon.

They might have a great rate now, but likely can't move without spending a lot more cash, explains Redfin chief economist Daryl Fairweather.

By the numbers: In metro Atlanta, buying a median-priced home in 2021, which came in at $325,000, at a 3% rate, would correspond to monthly mortgage payments of $1,565, per Redfin.

At 6.4% — the U.S. average rate in May — a home at the same price would have an estimated monthly payment of $2,105 per month.

Roughly 90% of mortgage holders in Georgia have a rate lower than 6%, according to Redfin's data.

What they're saying: Metro Atlanta's inventory of homes for sale was already tight before the Fed's interest rate hikes.

With people staying put and fewer homes going on the market, home prices — which tend to drop or stabilize when loans become more expensive — are actually increasing, Mike Carnathan of the Atlanta Regional Commission told Axios.

If the inventory of for-sale homes doesn't keep up, people rent or look to buy elsewhere, he says.

Zoom out: It's not just a local issue. Nine in 10 U.S. homeowners secured mortgage rates below 6% as of late 2022, per the new Redfin report. Meanwhile, mortgage rates have swung between 6 and 7% nationally in recent months.

"Golden handcuffs" pinch metro Atlanta's housing market

Homeowners might have a great rate now, but likely can't move without spending a lot more cash, a Redfin economist says

Mortgages

Nearly 60% of homeowners with mortgages in Georgia have a rate below 4%, per Redfin data shared with Axios.<ul><li>That&#x27;s locking homeowners in place and leaving buyers with few homes to choose from.</li></ul>

Data: RE/MAX; Note: Overall number includes 50 metro areas analyzed by RE/MAX; Table: Kavya Beheraj/Axios

Home sales were down 29.2% year over year in the metro Atlanta area, per RE/MAX’s February report.

Why it matters: In 2022, potential buyers were desperate for more inventory. Now, homes are hitting the market but people can’t afford them.

What's happening: Rates for a 30-year loan were at 6.09% in early February, and shot up to 6.65% by the end of the month, per Freddie Mac.

By the numbers: By and large, more metro Atlanta homes are on the market — and are sitting there for nearly twice as long.

The number of properties on the market increased by 88%, from 7,370 to 13,841, compared to February 2022.

Homes are sitting on the market for an average of 50 days, up from 26 in February 2022.

They're also selling for more. The median sold price is $364,000, up 2% from $357,000.

Zoom out: Because there’s less competition nationally right now, buyers don't have to front as much cash as they did a year ago, Axios' Emily Peck reports.

Between the lines: Buyers who can afford these mortgage rates have more power.

They have more options than a year ago, they can take their time searching and they can make offers that aren’t wildly above list price.

Yes, but: These rates make buying unaffordable for many.

What they're saying: Competition is still fierce, Sherry Fortson Bailey of Keller Williams Intown Atlanta told Axios. With higher interest rates, people don't want to pay exorbitant amounts over asking prices, 

"[A seller] can't just put a perceived value on it and hope that someone pays an inflated value," she said.

Despite stats showing an ample number of properties were available in February, tell that to buyers looking in select neighborhoods right now, she said. 

"There just isn't anything out there. If it is good, it's gone."

What's next: Mortgage rates dropped nearly a quarter point this month, which means buyer activity will likely pick back up.

Metro Atlanta real estate inventory goes up, sales go down

Real estate

Home sales were down 29.2% year over year in the metro Atlanta area, per RE/MAX’s<a class="gtmContentClick" data-vars-link-text=" February report" data-vars-click-url="https://www.prnewswire.com/news-releases/remax-national-housing-report-for-february-2023-301774754.html" data-vars-content-id="50e31239-13f1-4cb1-a546-ef5bea33d7bd" data-vars-headline="Metro Atlanta real estate inventory goes up, sales go down" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.prnewswire.com/news-releases/remax-national-housing-report-for-february-2023-301774754.html" target="_blank"> February report</a>.Why it matters: In 2022, potential buyers were desperate for more inventory. Now, homes are hitting the market but people can’t afford them.

Data: Zillow Economic Research; Map: Tory Lysik/Axios Visuals

It'll take Georgians 9.4 years to save up for a 10% down payment on the typical home, Zillow data shows. 

That would require saving 5% of the median household income every month. Homebuyers would need to save 10% of the median household income to generate a 20% down payment in the same amount of time.

Why it matters: Affordability could be a "major driver of cross-country moves" as buyers seek a lifestyle within their means, Zillow economists say.

By the numbers: In the metro Atlanta area, the length of time drops just slightly to 9.2 years.

The U.S. average is 8.9 years, with Iowa the lowest state at 5.2 years and Hawaii the highest at 18.4.

Between the lines: The share of first-time buyers in the U.S. has shrunk to a record low as inventory and affordability issues persist, according to the National Association of Realtors.

First-timers are also waiting longer to buy. The median first-time buyer age jumped from 33 to 36 from 2021 to 2022, the latest data shows.

Of note: A record share of Americans believes it's a bad time to buy a house.

The big picture: Saving enough for a down payment is the biggest barrier to entry, says Brandi Snowden, a director at the National Association of Realtors.

Many would-be-buyers are saddled with debt, including student loans, car loans and credit card debt.

Homebuyers aren't putting as much money down as they were at the height of the housing frenzy, Axios' Emily Peck reports.

The intrigue: 37.6% of metro Atlanta home sales were made in cash in April — a drop of nearly 8 percentage points from the same time the previous year, new Redfin data shows. 

Nationwide, the share of U.S. cash buyers reached a nine-year high.

It takes Georgians nearly 10 years to save for a home

The U.S. average is 8.9 years, with states like Iowa being as low as 5.2 years and Hawaii as high as 18.4.

It&#x27;ll take Georgians 9.4 years to save up for a 10% down payment on the typical home, <a class="gtmContentClick" data-vars-link-text="Zillow data shows" data-vars-click-url="https://www.zillow.com/research/understanding-affordability-32538/" data-vars-content-id="a6ec7977-a222-4fef-b6a2-02812590d39b" data-vars-headline="It takes Georgians nearly 10 years to save for a home" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.zillow.com/research/understanding-affordability-32538/" target="_blank">Zillow data shows</a>. <ul><li>That would require saving 5% of the median household income every month. Homebuyers would need to save 10% of the median household income to generate a 20% down payment in the same amount of time.</li></ul>Why it matters: Affordability could be a &quot;major driver of <a class="gtmContentClick" data-vars-link-text="cross-country moves" data-vars-click-url="https://www.zillow.com/research/understanding-affordability-32538/" data-vars-content-id="a6ec7977-a222-4fef-b6a2-02812590d39b" data-vars-headline="It takes Georgians nearly 10 years to save for a home" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.zillow.com/research/understanding-affordability-32538/" target="_blank">cross-country moves</a>&quot; as buyers seek a lifestyle within their means, Zillow economists say.

Atlanta shows no signs of a market crash this year. Here's what experts say to expect instead.

Supply simply can't keep up with demand. 

With "a huge deficit of housing," strong demand and expected population growth, the Atlanta metro market is poised for appreciation, says Kelly Stephens,  vice president and managing broker of Engel & Völkers' North Fulton and Buckhead offices.

2. Still, 2023 won't be as hectic for buyers.

The market won't be as tumultuous as 2021 or 2022, according to Stephens.

Zoom out: Karen Hatcher, immediate past president of the Atlanta Realtors Association, predicts a healthy economic outlook for 2023, which should drive relocations and incomes. 

 "Coupled with interest rates leveling out, we should see strong buyer demand from locals and domestic migration with a healthy selling season," she says. 

To keep up with all the demand, Hatcher says new construction will be necessary. 

Current homeowners who bought or refinanced in the last couple of years when mortgage rates were at record lows are projected to stay in their homes, she says.

Stephens predicts there will be "more new construction sales in proportion to resale this year."

"Builders are continuing to add inventory and are finding ways to work with lenders on a bulk scale to help open up better mortgage options for buyers," she says. 

Here's what experts say 2023 holds for Atlanta real estate

Atlanta shows no signs of a market crash.

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Atlanta shows no signs of a market crash this year. Here&#x27;s what experts say to expect instead.

Brianna Crane

Featured stories

"Golden handcuffs" pinch metro Atlanta's housing market

It takes Georgians nearly 10 years to save for a home

Metro Atlanta real estate inventory goes up, sales go down

Median home sale prices drop in metro Atlanta

Here's what experts say 2023 holds for Atlanta real estate