Atlanta Home-Buying Affordability Improves Slightly

The share of income needed to buy a home in the Atlanta metro area decreased last year, reversing a four-year trend of worsening affordability.

For households earning the area’s median income of $93,843, the share of income required for monthly mortgage payments decreased to 34.7 percent, down from 35.3 percent in 2023, the Atlanta Journal-Constitution reported, citing Redfin.

The shift in affordability was attributed primarily to wage growth outpacing increases in monthly housing costs. Home prices have been falling in Atlanta as well.

It is the metro’s first improvement in housing affordability since 2020, offering a modest reprieve for buyers navigating a market still defined by high prices, limited inventory and rising interest rates.

“Affordability improved ever so slightly this year because wage growth outpaced the growth in monthly housing payments,” said Redfin Senior Economist Elijah de la Campa. “But that’s not to say buying a home became affordable.”

The buyer for a home priced at the median of $387,948 and earning the median income would still spend almost 35 percent of their pay on housing. The Department of Housing and Urban Development considers households to be cost burdened if more than 30 percent of income is spent on housing.

The median home price has increased significantly from 2019, when the median price was $248,597. Home prices have risen 60 percent since then. While wage growth has improved affordability metrics slightly, prices and interest rates continue to push many buyers to their financial limits.

Atlanta’s housing market continues to face significant challenges, including a deficit of up to 100,000 homes in the area, according to nonprofit Up for Growth.

This inventory gap in Atlanta is aligned with national trends, as the U.S. housing market is facing a shortage of between 4 and 7 million homes, according to the Pew Charitable Trusts.

The inventory of active residential listings in Atlanta was 48 percent higher at the end of last year than at the beginning of the year, according to Georgia Multiple Listing Service.

For many Americans, buying a home remains more out of reach than ever, and that’s unlikely to change anytime soon, de la Campa said. Prices are expected to rise this year due to a lack of homes for sale, pushing more would-be homebuyers to rent instead.

Mortgage rates continue to play a role in affordability. Over the last 12 months, the weekly average mortgage rate stood at 6.91 percent, compared to under 4 percent in 2019.

— Andrew Terrell