Metro Atlanta home prices improved year-over-year for the 18th straight month in August, though the arrival of housing's usual "off-season" brought negligible monthly growth.
Home prices nationwide increased 12.4 percent on a yearly basis in August. On a monthly basis, prices were up only 0.9 percent.
Excluding distressed sales, home prices increased 11.2 percent over August 2012 and 1.0 percent over July 2013. Again, no states experienced depreciation.
Metro Atlanta Home Prices Slowed in August
After a strong run, the rate of Metro Atlanta home prices appreciating slowed in August. In addition to normal seasonality, the recent sharp rise in mortgage rates off their historic lows was a clear driver behind the slowdown.
Anand Nallathambi, CoreLogic's president and CEO says "For September, the company's Pending HPI indicates prices (including distressed sales) will gain 12.7 percent on a yearly basis and 0.2 percent on a monthly basis, continuing the slowing trend. Removing distressed sales, Metro Atlanta home prices are poised to rise 12.2 percent year-over-year and 0.7 percent month-over-month.
Meanwhile, Redfin reported another slip in homebuyer demand in August, with both home tours and offers declining.
While homebuyer demand typically falls from July to August—signaling the end of the normally active summer season—this year’s drop in demand was more drastic than usual, says Redfin analyst Ellen Haberle.
Looking ahead to the rest of 2013, Redfin is keeping its eye on mortgage rate trends, which will likely play an even bigger role. "If rates were to spike above five percent, many buyers who have been rushing to find a home while rates are low may step out of the market temporarily, which would trigger a sharp drop in demand," Haberle concluded. "On the other hand, if rates remain stable, we expect demand will flatten this autumn."
Rates are now expected to remain flat or drift a bit lower since the Fed announced it was not yet ready to cut back on its Bond purchase program. This could help Metro Atlanta home prices as we head into the winter months.