Home prices in the Big Peach rose 6.3 percent in 2016, compared to the national average growth rate of 5.8 percent.
“Home prices continue to advance, with the national average rising faster than at any time in the last two-and-a-half years,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. “With all 20 cities seeing prices rise over the last year, questions about whether this is a normal housing market or if prices could be heading for a fall are natural. In comparing current home price movements to history, it is necessary to adjust for inflation. Consumer prices are higher today than 20 or 30 years ago, while the inflation rate is lower.”
One factor behind rising home prices is low inventory, Blitzer added.
“While sales of existing single family homes passed five million units at annual rates in January, the highest since 2007, the inventory of homes for sales remains quite low with a 3.6 month supply,” he said. “New home sales at 555,000 in 2016 are up from recent years but remain below the average pace of 700,000 per year since 1990.”
Another factor is mortgage rates.
“A 30-year fixed rate mortgage today is 4.2 percent compared to the 6.4 percent average since 1990,” Blitzer said.
Information courtesy of Atlanta Business Journal