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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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Data: RentCafe analysis of Yardi Matrix data; Note: Analysis includes 200 largest U.S. cities; Chart: Axios Visuals

One square foot of rental space in Atlanta is almost double the cost of a square foot in Columbus. 

Driving the news: A monthly rent of $1,500 can get you a 788-square-foot apartment in Atlanta, slightly larger than the national average of 782 square feet, according to a new report from listing service RentCafe.

The big picture: The rental market is thriving as homes for sale are limited and interest rates are high. People in Gen Z are also prioritizing location over home size, Doug Ressler of real estate research firm Yardi Matrix tells Axios.

Those renters are influencing development in big cities, from smaller floor plans to next-level amenities and conveniences.

Zoom in: Consider this house with three bedrooms, three bathrooms (nearly 1,500 square feet) and a fenced-in yard in Columbus for rent for $1,500.

In Macon, you can snag a historic 1,200-square-foot, two-bed, two-bath house for the same price.

😑 Yes, but: That budget will get you this 575-square-foot apartment with one bedroom in Midtown Atlanta. 

And if you want to get close to downtown Savannah, you're looking at a 600-square-foot carriage house with one bedroom and one bathroom.  

Between the lines: Smaller cities with big apartments are on the rise, especially in tech hubs that draw jobseekers, says Ressler, manager of business intelligence at Yardi Matrix, a sister company of RentCafe.

Also, millennials are seeking more space as they age and build families.

Be smart: Rent is rising faster than income nationwide.

The median U.S. renter is spending close to 30% of their monthly income on average rent, per the latest report from Moody's Analytics, an economic research firm.

Reality check: It's still cheaper to rent than buy in the vast majority of the country, a new Redfin report shares.

How much rental space $1,500 will get you in Atlanta

One square foot of rental space in Atlanta is almost double the cost of a square foot in Columbus.

Hub Stories - All

One square foot of rental space in Atlanta is almost double the cost of a square foot in Columbus. Driving the news: A <a class="gtmContentClick" data-vars-link-text="monthly rent of $1,500" data-vars-click-url="https://www.rentcafe.com/blog/rental-market/market-snapshots/rental-space-for-1500/" data-vars-content-id="86d0a187-e07c-4d3b-9a4a-e668ec550762" data-vars-headline="How much rental space $1,500 will get you in Atlanta" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.rentcafe.com/blog/rental-market/market-snapshots/rental-space-for-1500/" target="_blank">monthly rent of $1,500</a> can get you a 788-square-foot apartment in Atlanta, slightly larger than the national average of 782 square feet, according to a new report from listing service RentCafe.

Real Estate

Data: Point2Homes; Map: Tory Lysik/Axios Visuals

Atlanta renters earned 59% of the income they would need to afford a starter home in October, according to an analysis by real estate website Point2Homes.

Researchers considered "starter homes" properties valued in the lower one-third of all available homes for sale.

Why it matters: Higher mortgage rates and housing costs are keeping homeownership out of reach from many first-time buyers.

By the numbers: Renters in Atlanta earned a household income of $42,359 on average, while the income needed to cover a mortgage was $72,162, per the study.

In September, a typical Atlanta starter home cost $271,427, the study found, analyzing Zillow data.

Zoom out: Following October's interest rate hike, renter households in 15 of the 50 largest U.S. cities made less than half the income needed to buy one of the cheapest homes in town, per the analysis.

The big picture: Across the U.S., the share of first-time home buyers has shrunk to a record low, according to the National Association of Realtors. First-time buyers made up 26% of all buyers in 2022, down from 34% last year, the group found.

Go deeper: 3 reasons it's getting harder for renters to buy

Atlanta renters can't afford starter homes

Higher mortgage rates and housing costs are keeping homeownership out of reach from many first-time buyers.

Atlanta renters earned 59% of the income they would need to afford a starter home in October, according to an <a class="gtmContentClick" data-vars-link-text="analysis" data-vars-click-url="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" data-vars-content-id="9b0b07ec-a453-47e5-aa23-8f333d762630" data-vars-headline="Atlanta renters can&#x27;t afford starter homes" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.point2homes.com/news/research/starter-homes-where-to-find-them-entry-level-house-myth.html" target="_blank">analysis</a> by real estate website Point2Homes.<ul><li>Researchers considered &quot;starter homes&quot; properties valued in the lower one-third of all available homes for sale.</li></ul>

News

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.

Mortgages

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.

Data: RentCafe analysis of Yardi Matrix data; Note: Analysis includes U.S. metro areas (defined by Yardi Matrix market boundaries) with the most apartments located in multi-family buildings of 50 units or more; Map: Kavya Beheraj/Axios

We're not yet at Manhattan-level square footage (not even close). But newer apartments in metro Atlanta are a little cozier than older units.

Why it matters: Apartment sizes are shrinking nationally, a reversal in the rental market that saw units get bigger during the early part of the work-from-home era.

By the numbers: The average size of newer Atlanta apartments is 900 square feet, compared to the 2022 national average of 887 square feet, per a new report from listing service RentCafe.

The big picture: Nationwide, newly built apartments shed 30 square feet on average compared to 2021, per the report.

That sharp decrease was fueled in part by more studios and one-bedroom apartments entering the market, researchers found, analyzing the 100 metro areas with the most high-density buildings.

Zoom in: Decatur's average new apartments measured in at 881 feet, the smallest in the metro.

Builders went bigger around Marietta, where the average square footage in newer units is 1,060 square feet.

Intrigue: The average size of an apartment in 12Hundred Studios, an affordable housing development in Hunter Hills that opened in 2022, is 250 square feet, Urbanize reports.

What's happening: In 2020 and 2021, demand for more space resulted in larger unit configurations, RentCafe analyst Adina Dragos tells Axios.

"Fast forward to 2022, the demand for more apartments prompted developers to accommodate more units in their projects," Dragos says.

Case in point: 57% of apartments completed last year were small units — defined by RentCafe as studios and one-bedrooms — across the U.S.

Of note: At the local level, researchers considered new apartments those units built between 2013 and 2022.

What we're watching: Apartments under construction. As the market keeps fluctuating post-pandemic, their size could signal whether the trend of smaller rentals will stick.

Atlanta's newer apartments are shrinking in size

A new study says the walls are closing in

Housing

We&#x27;re not yet at Manhattan-level square footage (not even close). But newer apartments in metro Atlanta are a little cozier than older units.Why it matters: <a class="gtmContentClick" data-vars-link-text="Apartment sizes" data-vars-click-url="https://www.axios.com/2023/03/14/smaller-apartments-flooding-market" data-vars-content-id="bbf7ad75-aee4-4310-b98d-bb3e2b34e052" data-vars-headline="Atlanta&#x27;s newer apartments are shrinking in size" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/03/14/smaller-apartments-flooding-market" target="_self">Apartment sizes</a> are shrinking nationally, a reversal in the rental market that saw units <a class="gtmContentClick" data-vars-link-text="get bigger" data-vars-click-url="https://www.wsj.com/articles/supersize-apartments-are-back-in-demand-11624964401" data-vars-content-id="bbf7ad75-aee4-4310-b98d-bb3e2b34e052" data-vars-headline="Atlanta&#x27;s newer apartments are shrinking in size" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.wsj.com/articles/supersize-apartments-are-back-in-demand-11624964401" target="_blank">get bigger</a> during the early part of the <a class="gtmContentClick" data-vars-link-text="work-from-home" data-vars-click-url="https://www.axios.com/2022/09/15/census-bureau-work-from-home-pandemic-labor" data-vars-content-id="bbf7ad75-aee4-4310-b98d-bb3e2b34e052" data-vars-headline="Atlanta&#x27;s newer apartments are shrinking in size" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/09/15/census-bureau-work-from-home-pandemic-labor" target="_self">work-from-home</a> era.

Data: Moody's Analytics; Table: Kavya Beheraj/Axios

In the fourth quarter of 2022, the average asking rent in the Atlanta metro area was $1,583, up 6.4% from a year earlier, per economic research firm Moody's Analytics, writes Axios' Sami Sparber. 

Why it matters: Affordability concerns are starting to weigh down the booming rental market.

What's happening: Many would-be home buyers chose to rent longer last year, sustaining apartment demand, economists at Moody's Analytics say. But people are hitting their spending limit.

For the first time in over two decades, households now have to spend 30% of their income on average rents, a new report shares.

Year-over-year rent growth slowed in the second half of the year across the board, "and we expect further deceleration as new supply makes it to market at the same time the labor market softens," senior economist Lu Chen tells Axios.

What we're watching: New apartment construction. The expected surge in supply could help bring down prices.

Yes, but: Experts say most cities will "remain undersupplied with the kind of affordable units that see the highest demand," per The Wall Street Journal.

Atlanta rents are still too damn high, for now

But affordability concerns may lead to a slowdown

In the fourth quarter of 2022, the average asking rent in the Atlanta metro area was $1,583, up 6.4% from a year earlier, per economic research firm Moody&#x27;s Analytics, writes Axios&#x27; Sami Sparber. Why it matters: Affordability concerns are starting to weigh down the booming rental market.

Sami Sparber

Featured stories

It takes Georgians nearly 10 years to save for a home

How much rental space $1,500 will get you in Atlanta

Atlanta's newer apartments are shrinking in size

Atlanta rents are still too damn high, for now

Atlanta renters can't afford starter homes