Given the recent tapering down of FED rate hikes this month, I expect to see mortgage rates stabilize in the back half of the year. This stabilization should improve buyer confidence. Nevertheless, homebuyers are consistently stepping in and buying at any rate decreases. As the year progresses, I view pent-up demand as a good sign for the Atlanta market.
Unfortunately, the pent-up demand may not have anywhere to go, as inventory is still at record lows. In Atlanta, we dipped back below two months of supply in February.
We are already seeing demand pick back up nationally on home sales. February saw a 14.5% increase in sales, ending a 12-month decline.
With sales picking back up and inventory at record lows, I anticipate home prices will continue to increase throughout the year slowly. If you are in the market for a new home, buying sooner rather than later could be a good decision before competition and prices tick back up.
Below I outline the most recent data from a national and local market perspective.
National Market Analysis
Median home price
The national median home price in February was $363,000, up 0.2% from February 2022.
Days on the market
The national average for the number of days homes were on the market in February was 34, compared to 18 days in February 2022. Of the homes sold in February, 57% were on the market for less than one month.
Supply
The national supply for February is sitting at 2.6 months. These national supply challenges are expected to continue in the near term. Supply is down 10.3% from January 2023 but improved from February 2022, which recorded 1.7 months of supply.
Buyers
First-time buyers accounted for 27% of sales in February, down from 29% in February 2022. Investors and second-home buyers accounted for 18% of home sales in February, down from 19% in February 2021.
Region
In the southern region of the country, home sales are down 21.3% from a year ago but are up 15.9% from January 2023. Prices in the southern region have increased by 2.7% year over year.
As of March 16th, the 30-year fixed rate mortgage average is 6.6%, up from 4.16% a year ago.
Atlanta Market Analysis
Median home price
The Atlanta median home sale price in February was $387,000, up 1.8% from the February 2022 median price of $380,000. The median sales price has risen 3.2% from January 2023 low.
Days on the market
The Atlanta average for the number of days homes were on the market in February was 46, compared to 24 days n February 2022, a 91.7% increase.
Supply
The Atlanta supply for February is sitting at 1.8 months. The supply is up approximately 80% from February 2022. However, the increase is not as significant as the percentage suggests; the February 2022 supply was at a dismal 1.0 months. Recall that a healthy market has 4-6 months of supply. Atlanta’s supply is still well below the national average.
Home sales
Atlanta home sales in February are down 40% from February 2022.
Atlanta is still in a challenging supply and strong price position. Prices remain up over 43% compared to February 2020, before the pandemic. Likewise, with Atlanta’s continued population and business growth, I believe the real estate market will continue its strength as rates cool down and stabilize.
Conclusion
Homes prices are ticking back up from both seasonality and ongoing supply challenges. As we progress through the year, I expect this trend to continue. Likewise, barring any black swan events or potential banking crisis, we should see stabilization from both a mortgage rate and price perspective.
There are some excellent opportunities for buyers who know where to look. That’s why working with an experienced agent like myself is crucial to ensure you get the best home for your needs.
If you are ready to buy or sell a home, please do not hesitate to contact me.