Are Mortgage Rates Dropping in Atlanta Real Estate? Explaining What’s Happening to Interest Rates in 2024

As we move into September 2024, the Atlanta real estate market presents a dynamic landscape. Mortgage rates have shown significant fluctuations this year, with many potential buyers and sellers wondering if now is the right time to make a move. In this blog, we’ll break down the current state of mortgage rates, why they’re dropping, and what that means for Atlanta’s real estate market.

Key Takeaways 

• In September 2024, Atlanta mortgage rates fell to between 5.7% and 6.35%, a decrease from last year's high of over 7%.

• Cooling inflation (now at 2.5%) and the Federal Reserve's easing of rate hikes are driving the decrease.

• Buyers gain affordability, while sellers benefit from strong demand, but high home prices persist.

• Refinancing is attractive for homeowners, while both buyers and sellers should act strategically before market changes later in 2024.

Current Mortgage Rate Trends in September 2024

As of mid-September 2024, mortgage rates in Atlanta are hovering between 5.7% and 6.35%, showing a slight but notable decline from last year's high of over 7.18%. This decrease is largely driven by cooling inflation and a shift in the Federal Reserve's approach to interest rate hikes. Freddie Mac reports that 30-year fixed mortgage rates have dropped to 6.20%, while 15-year fixed rates are averaging around 5.27%, signaling a favorable environment for buyers who’ve been waiting for relief from last year’s peaks.

Also from another source, mortgage rates recently dropped to around 5.7%, which is significantly lower than the highs seen earlier in 2024. However, further drops are expected to be more moderate as the Federal Reserve prepares for gradual rate adjustments rather than sharp cuts.

Why Are Rates Dropping?

Several factors have contributed to the recent decrease in mortgage rates at Atlanta real estate:

• Cooling Inflation: Inflation has gradually decreased, with the consumer price index rising by only 2.5% year-over-year in August 2024, down from 2.9% in previous months. This lower inflation rate has allowed the Federal Reserve to ease up on its aggressive rate hikes​.
• Federal Reserve Policy: After two years of raising rates to combat high inflation, the Federal Reserve is now signaling a potential shift. While a major rate cut isn't expected, modest reductions in the federal funds rate are likely, which will indirectly impact mortgage rates. However, market experts caution that most of these rate changes have already been priced in by mortgage lenders​.
• Slowing Economic Growth: The labor market has also cooled, allowing more flexibility in monetary policy. As economic activity slows, long-term interest rates such as mortgages are typically lower.

Impact on Atlanta’s Real Estate Market

The Atlanta real estate market has been affected by fluctuating rates, but several key factors are currently shaping the environment:

• Inventory Levels Rising: The number of homes for sale in atlanta has increased slightly, with over 6,300 active and pending listings as of July 2024. This is a positive sign for buyers, as higher inventory levels reduce competition and provide more options​.
• Home Prices Still High: Despite more inventory, home prices in Atlanta remain elevated. Many potential sellers are still hesitant to list their properties, particularly those who locked in low mortgage rates during the pandemic. As a result, while rates are decreasing, the tight housing supply continues to limit affordability for many buyers​.
• Buyer Sentiment Improving: With mortgage rates now lower than they were in 2023, buyer sentiment has improved. Many who were priced out of the market last year are cautiously re-entering, encouraged by the slight reprieve in borrowing costs. That said, buyers are still navigating high home prices and limited options, which means the market remains competitive, though less frantic than last year.

What Buyers Should Know

• Lower Rates Mean Higher Affordability: For buyers, the recent drop in mortgage rates translates to lower monthly payments. Even a slight drop in rates can result in significant savings over the life of a loan. For instance, a decrease of just 1% in interest rates can save thousands of dollars in interest payments over a 30-year mortgage.
• Refinancing Opportunities: Homeowners who locked in higher rates earlier in 2024 or in 2023 may find this a good time to refinance. According to some estimates, refinancing at the current rate of around 5.7% could save hundreds per month, depending on the original loan terms​.
• Timing the Market: While mortgage rates are declining, the Federal Reserve’s future actions and the upcoming presidential election could introduce more volatility later in the year. Buyers should carefully consider their financial situation and act sooner rather than later to lock in favorable rates.

What Sellers Should Know

• Slightly Lower Rates, Strong Buyer Demand: Lower mortgage rates mean more buyers can afford homes, which can drive demand. Although home prices remain high, the slight rate drop makes it more feasible for buyers to stretch their budgets. Sellers may find this an opportune time to list properties as buyers move to take advantage of better financing terms​.
• Strategic Listing: With inventory still below balanced levels, sellers can leverage the still-limited supply to secure favorable terms. Listing now, before more properties flood the market, could give sellers an edge over increased competition in the coming months​.

2024: A Year of Opportunity?

Looking ahead, the Atlanta real estate market may continue to experience gradual improvements in affordability as Atlanta mortgage rates ease. However, buyers and sellers alike should be cautious about overextending themselves financially. With inflation cooling and the Federal Reserve taking a more measured approach, the market may not see significant volatility in mortgage rates for the remainder of the year.

Both buyers and sellers can benefit from the current conditions by acting strategically. Buyers should consider locking in a mortgage rate soon before the market potentially tightens again. Meanwhile, sellers may want to take advantage of the motivated buyer pool before inventory rises and competition becomes fiercer.

Conclusion

The current drop in mortgage rates is a promising sign for Atlanta’s real estate market, but it’s important to remain aware of ongoing economic and political factors that could impact future trends. With rates now below 6%, there’s a window of opportunity for both buyers and sellers to make moves, but timing will be crucial as we head into the latter part of 2024.