September Intown Market Report
By Bill Adams, President
This month, the Average Sales Price for the market is $755,454, a 4% increase in the last year and a 12% increase over the last 24 months. The September Average Sales Price is a decrease of $12,714 from August’s Average Sales Price. The Average Number of Days on the market is 37 days, an increase of 1 day over the last 12 months. The Number of Units Sold fell to 1,436, an 11% drop over the last year.
On Wednesday, September 18th the Federal Reserve lowered the Fed Funds Rate by 50 basis points or ½%. While related, the federal funds rate and mortgage rates are not directly tied together. Most mortgage rates are tied to 10-year US Treasury Bonds of which the movement of the Fed Funds Rate is one of several factors that influence Treasury rates. As of September 23, 2024, the yield on the 10-year Treasury Bond is 3.745%. Over the last year, the interest rate on the 30-year mortgage has fallen by about 1.5%. Using my “hazy” crystal ball, I expect home mortgage interest rates to be below 6% sometime in the next two quarters. Falling mortgage rates will help to ease the housing affordability crunch. In this current high interest rate and home appreciation environment, I have suggested that a prospective purchaser buy now and refinance when rates fall. As the following chart using last year’s interest rates and today’s rates will show that may be a sound strategy on an individual property, however if the market appreciation in a neighborhood is modest it is better to wait. To demonstrate, I took the most expensive neighborhood, Ansley Park, the least expensive community, East Point, and the market Average Sales Price.
In all the examples above, it was better to wait to buy in 2024. Does that mean that buyers ought to wait until 2025 with its projected lower mortgage rates? The answer to that question will depend on each prospective purchaser’s individual circumstances, their risk tolerance, and their borrowing capacity. Finally, as we all know, the market may say one thing and a buyer’s heart may say something else.
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