For first-time Atlanta homebuyers, getting under contract is 'a blessing'
It can feel like storm chasing. For several years now, Atlanta’s limited housing supply, coupled with mushrooming demand, has meant prospective buyers have had to scramble with an offer.
The average metro housing price has gone up 15% in just the past year to $430,000. That’s nearly double what it was just five years ago.
Historically low mortgage rates have helped drive the market. But recently, efforts to cool inflation have caused mortgages to become severely more expensive.
Forty-year-old project manager and East Atlanta resident Sammie Reed knows it. He’s been looking to buy since December. WABE’s “All Things Considered” team caught up with Reed to find out how the process is going.
“Price point-wise, it’s ok, but I do understand that in this market right now, it’s ridiculous. It’s so hard to get a house,” Reed said.
Just inside the Clayton County line, the four-year-old, two-story, 3,000-square-foot brick facade house has four bedrooms, three and a half baths, a two-car garage, intricate tray ceilings and even a deck with a gazebo. It was on the market exactly one day before it went under contract after Reed toured the place. The asking price: $400,000.
Reed knows waiting has cost him. Having a loan from the U.S. Department of Veterans Affairs will help cushion some of the blow. Yet what’s really going to hurt is the steep increase in mortgage rates. A year ago, Reed likely could’ve secured a loan in the upper two- to low three-percent range. Today’s average 30-year fixed-rate VA loan is 5.43%. That translates to $700 more a month just in interest.
His agent, Lentheus Chaney of Sovereign Realty and Management, told WABE it’s been hard to convince clients to keep mortgage rates at the top of mind.
“I’ve had clients who didn’t lock in soon enough, and then when they went and started looking and found a house, the interest rate had gone up, and their payment changed,” Chaney said.
“Sometimes that makes them feel a little uneasy. But it’s still better to go forward than the alternative, and that’s to continue to rent, and not gain any equity and property.”
Chaney said it’s a blessing to even get under contract in the first place.
“Although we are still in a very competitive market, as interest rates go up, less buyers are going to be in the marketplace\, and I think that’s the whole goal. But I don’t think prices are going to go down because of that.”
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