MarketNsight, a leading real estate data and analysis provider, presented its state-of-the-market report and 2024 predictions during Market Watch.
“Nationwide job growth of nearly 3 million jobs in 2023 underscores the urgent need for increased housing supply to accommodate new workforce entrants, whether they rent or buy,” said John Hunt, Principal and Chief Analyst at MarketNsight.
The Federal Reserve’s indication of rate cuts in 2024 brings a new dynamic to the market, suggesting a continued growth trajectory and lower mortgage rates.
Mortgage rates spent 16 consecutive weeks of rates over 7% since August and hit 7.76% the last week of October. This led to low pending sales due to a two-week lag effect. However, mortgage rates recently dropped to 7.03%, hinting at a market turnaround. “Assuming rates continue to moderate, we have found the bottom,” said John Hunt, Principal and Chief Analyst at MarketNsight. “As rates moderate or fall, discretionary buyers will start to return to the market.”
With only 2.5 months of housing supply, the market still falls short by 45,000 units annually to reach a healthy six months of supply. Currently, inventory is 40% below pre-pandemic levels, contributing to a highly competitive market and escalating home prices. Notably, home prices have risen by 4% year-to-date over 2022, even though December 2023 prices in Atlanta showed a staggering 20% increase over a terrible December 2022. Hunt comments, “We are back to a long-term average of 5%.”
In a market that desperately needs entry-level homes, Atlanta homebuyers increasingly find the door to homeownership closed. At present, inventory under $350,000 is basically extinct. “We need starter home inventory; we are witnessing an all-out war on housing affordability in our country,” said Hunt. Restrictive and exclusionary zoning is the biggest challenge to this.
“Housing affordability is the defining issue of our time,” said Hunt. “We have plenty of office space,…
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