Atlanta housing market forecasts for 2017 call for continued home-price increases, though the gains might be smaller than what we’ve seen over the last year. Mortgage rates, meanwhile, are expected to remain below 4% well into next year. Learn more about these and other Atlanta real estate market predictions below.
Atlanta Housing Market Forecast 2017: Slower Growth?
Denver, Seattle and Portland generated a lot of real estate headlines during 2016, due to the double-digit home price gains seen in those cities. But there’s an East Coast city that rivals their gains, but gets far fewer headlines. It’s Atlanta.
The Atlanta housing market saw huge home-price increases in 2016. And while the 2017 forecasts for this market are a bit more conservative, it will still probably outpace the nation next year in terms of home value appreciation.
According to the economic research team at Zillow, home prices in Atlanta, Georgia rose by 10.5% over the last year (from October 2015 - October 2016). The company has forecast an additional 6.3% gain over the next 12 months, through October 2017.
That’s more than double the outlook for the nation as a whole. Nationally, Zillow predicts that U.S. home prices will rise by around 3% over the next year.
The Atlanta housing market forecast for 2017 mirrors the projections being made for other major cities in the U.S., and for the nation as a whole. Economists and housing analysts believe that home values will rise more slowly in 2017 than what we’ve seen over the last couple of years. There are a number of factors driving these more conservative forecasts, including affordability issues and inventory growth.
According to the Atlanta Realtors Association (ARA) Market Brief, released earlier this month, the number of homes sold in September 2016 dropped 1.9% from the same month last year. So perhaps we are seeing the early signs of a decline in demand.
Average Mortgage Rates Below 4% for a While?
Mortgage rates, meanwhile, are expected to remain below 4% through the end of this year and well into 2017. When this article was published, in October 2016, the average rate for a 30-year fixed-rate home loan was 3.52%. This is based on the weekly industry survey conducted by Freddie Mac, the government-controlled company that buys and sells mortgage loans on the secondary market.
In a recent mortgage rate forecast, published in September 2016, the company stated:
“We expect [30-year] mortgage rates to gradually rise in the coming months, ending 2016 around 3.6 percent and averaging 3.6 percent for the year. This would be the lowest annual average in the past 40 years. Next year, we expect rates to drift modestly higher, ending 2017 at about 3.9 percent and averaging 3.7 percent for the year.”
Inventory Is Tight, Competition Is High
But don’t let the 2017 Atlanta housing market forecast fool you. While home prices could indeed rise more slowly in 2017, competition will remain high in and around the city. This is due to a lack of inventory.
According to the ARA Market Brief mentioned earlier, housing inventory totaled 16,222 units in September 2016, marking a decline of 1.8% from a year earlier. ARA President Lane McCormack reported that Atlanta housing inventory remains near an all-time low, and that “the market will remain tight with increasing prices until more inventory is available.”
Disclaimer: This article contains forward-looking statements (predictions and forecasts) for the Atlanta real estate market in 2017. Such statements were provided by third parties not associated with our company. We have simply compiled them here as a service to our readers.
I currently own a condo in Atlanta and have been itching about investing in real estate. We have the opportunity to rent our condo (which would basically just pay the condo expenses) and purchase another property to live on. Would you recommend buying now or wait a few years once the markets are less competitive? Granted that rates are higher now, I fear that prices will not slow down any time soon, making homes less affordable in a few years. Any feedback would be greatly appreciated.
Thanks!
Hi Sorian. I can’t really offer any specific advice, given the seriousness of your decision. I hope you can understand that. But I will say that if you’re seriously considering a second purchase, a case could be made for doing it sooner rather than later. Home prices in the Atlanta area are forecast to continue rising for the foreseeable future. Mortgage rates could trend upward as well, due to recent policy changes made by the Federal Reserve. So you might end up paying more for a condo down the road, than what you would pay now. Food for thought!