Homebuyers lured by dip in mortgage rates still higher than a year ago

ATLANTA — It wasn’t the price, it was the rate.

Kevin Johnson and his wife closed in December on a newly constructed, five-bedroom, three-bath home in Dallas for $449,000 — $100,000 more than the price they got for their Powder Springs, Georgia, home — a move they weren’t making because they really wanted to leave their home of eight years.

“Had we not found this one, we would have just stayed in our other house,” he said.

Mortgage rates had been climbing all year, shoved higher by the Federal Reserve’s steady hikes in short-term interest rates, a campaign aimed at cooling inflation that had also been chilling the housing market. But as mortgage rates soared, Johnson found a builder who offered an “in-house” mortgage at 3.9%.

“That incentive made the difference,” he said. “If there’s one thing I can do, it’s arithmetic.”

Prices matter, but rates are crucial.

The median list price of a metro Atlanta home has risen 34% in five years, according to Realtor.com, a challenge to affordability. In early February, just 10% of listings were at $250,000 or below, according to broker Kristen Jones of Re/Max Around Atlanta.

Prices have been rising faster than incomes, and not just in Atlanta.

“I think our biggest concern is continuing to find affordability for the majority of Americans,” said Ryan Marshall, chief executive of Atlanta-based PulteGroup, the nation’s third-largest homebuilder. “Most people who buy a house take a mortgage and the impact that the Fed has on affordability is front and center,” he told the Atlanta Journal-Constitution.

The median sales price of a metro Atlanta home in January was $360,000, according to the Georgia Multiple Listing Service.

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