Atlanta’s Housing Industry Off to a Great Start in 2016
As we kick off 2016, we’ve learned a couple of things. First, spring is on its way thanks to the absence of Punxsutawney’s shadow, and second, the housing industry is off to a great start. The Cal-Culator – Atlanta’s residential real estate index – improved 0.2 to start the year off at a 7.0 due to robust home prices, increased down payments and phenomenal homes sales.
Rising home prices, an indicator of a robust housing industry, are here to stay, according to multiple housing organizations.
- The latest S&P/Case-Shiller Home Price Indices recorded a 5.3 percent annual increase in home prices.
- The Federal Housing Finance Agency offered its latest monthly House Price Index and found prices in November increased 0.5 percent from the previous month.
“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Sales of existing homes were up 6.5% in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market.”
The average down payment rose considerably in the fourth quarter, according to LendingTree. The company reported the average payment increased to $51,721 from $48,924 in Q3.
“The fourth quarter marked another period of housing market improvement, where home values continued to rise for most markets,” said Doug Lebda, founder and CEO of LendingTree. “Higher home prices mean larger down payment amounts, even though down payment percentages remain fairly flat. As we continue to see the housing market improve, current homeowners who have postponed a move may be more inclined to sell, creating more housing inventory for buyers across different price distributions.”
Existing home sales, led by the South and the West, soared in December– 14.7 percent from November, according to the National Association of Realtors.Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended to a seasonally adjusted annual rate of 5.46 million in December. Sales are now 7 percent above a year ago.
Pending Home Sales also increased, but only marginally by 0.1 percent. However, Yun remains positive this number will increase in coming weeks as mortgage rates have declined.
“Buyers looking to close on a home before the spring buying season begins may be rewarded with a mortgage rate at or below 4 percent.”
The next SaportaReport will be released March 8. Please check back to see if 2016’s trajectory in the Atlanta housing industry remains.