Tariffs, fluctuating interest rates and increasing home prices – what does it all mean for the Atlanta housing economy? Leslie Appleton-Young, chief economist with First MLS (FMLS), joins Host Carol Morgan on the Atlanta Real Estate Forum Radio podcast to discuss the current state of the Atlanta housing market.
Pending Sales and Interest Rates
Interest rates are not dropping significantly, leading pending sales to be very sensitive. Appleton-Young mentions that 25% of sales are all-cash transactions made by older generations with higher incomes and established equity in their current homes. This affects first-time homebuyers who want to purchase a home but are limited by student loan debt and past inabilities to save. Mortgages are also expected to remain at 6% this year, putting a damper on affordability and market stability.
On a larger scale the economy is uncertain, but not yet at a crisis level. Consumers worry about the 10% tariffs; however, they are not “deal-breakers” and are not likely to send the economy into a spiral alone.
Appleton-Young said, “I think it's just anticipating. If we were to have these huge tariffs that are kind of put out there and then pulled back, it would be a major dislocation for the economy.”
“Lock-in Effect” on Resale Inventory
Inventory is slightly above pre-pandemic levels, especially in areas with new construction. Older generations stayed “locked-in” at their current homes to avoid higher interest rates, but now the market has slowed down, and those resale homes are sitting on the market for longer. Earlier this year, resale inventory remained on the market for an average of 12 days. Now, it’s closer to 26 days.
New Construction Homes
“Georgia's much better positioned because there is a more supportive environment for new construction than you find in other states,” said Appleton-Young. “That's why, when you look at the national numbers, just take a check back and realize that Georgia is typically doing better.”
The median home price in Georgia is $381,000 and $444,000 in Atlanta. When people enter the Atlanta housing market from higher-priced states like California, there is often a thought of, “Wow, this is affordable.” For Atlanta natives, that is not the case, and they are forced to rent long-term. Homebuilders are combatting that with enticing rate buy-downs, while many homebuyers have pivoted to multigenerational housing. With more family members under one roof, everyone can pitch in and connect without leaving home.
“I do think there are listings happening because people are like ‘Enough. I want to downsize. I want to move to a different state. I want to be closer to my grandchildren. I want to buy that multigenerational house,’” said Appleton-Young.
She anticipates that prices will rise 1% to 3% this year, just not as quickly as years prior. This slowdown is likely due to increased equity among homeowners.
Tune in the full episode to discover more housing market predictions and what to expect when buying a home this year. For more about FMLS, visit www.FirstMLS.com.
About First MLS
FMLS is the fourth largest multiple listing (MLS) service in the nation. Since 1957, it has served over 57,000 real estate professionals, including agents, appraisers, brokers and home inspectors. FMLS is privately owned and not affiliated with the National Association of Realtors.
Podcast Thanks
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