Economic stability and job security among active home buyers are fueling growth in the real estate market as demand outpaces inventory.
Bill Murray, president of the Atlanta Realtors association says buyers are able to pay the higher rates due to incomes supported by a stabilizing job market.
According to a new Equifax National Consumer credit trends report, outstanding first mortgage balances in February reached $8.81 trillion, closer to the $9.04 trillion recorded in 2008.
Murray says that is a good thing.
“I would expect the mortgage balances to be higher because people feel better about where they are, where they are working and what they are making,” says Murray.
Gunnar Blix, Chief Deputy Economist at Equifax says despite nearing the pre-great recession peak nominally, the market is in a much healthier place compared to 2008, as interest rates are low and home prices have normalized.
Stricter lending requirements instituted after the 2008 bubble have stabilized the real estate market, allowing only those able to sustain mortgages to get approved.
“Atlanta’s job growth is one of the strongest job segments in the economy and if the job growth is there and people aren’t losing their jobs, and interest rates are low and you have equity in your home, the fact that the mortgage balances are higher that’s not a bad thing,” said Murray
An Atlanta Realtors Association report released in February shows low inventory for homes in Metro Atlanta, with home prices increasing by 9.9 percent.
Murray attributes the data to historically low inventory but says the number has started picking up as new construction lends to the growing demand.
Median home sale prices in January in Metro Atlanta stood at $245,000
Home equity loan balances have been declining since the 2007 peak. The balances as of January 2018 were down 65.2%
Outstanding first mortgage balances in February reached $8.81 trillion closer to the $9.04 trillion recorded in 2008.