There is no doubt now that the brakes are on: the housing market in Metro Atlanta has continued to slow, with rising mortgage rates driving down prices and sales.

The median sale price in October was $379,455, down slightly from the previous month and down nearly 8% since June, according to the Georgia Multiple Listing Service, which tracks sales in a 12-county area centered on the city ​​of Atlanta.

“There have been four consecutive months of falling prices,” said John Ryan, the group’s chief marketing officer. “Historically, we typically see a seasonal decline, but the decline is accelerated compared to what we’ve seen in the past.”

This median price is still 7.5% higher than a year earlier, but a year ago prices were rising at an annual rate of 20%.

Slowing home sales in the Atlanta area and falling prices come as the Federal Reserve raised its benchmark interest rates to keep inflation under control.

About 4,800 homes were sold in the area, down 16% from September, Ryan said.

“We’ve seen a steady decline in the market,” he said. “Activity has definitely slowed down.”

Mortgage rates, while far from historic highs, have more than doubled over the past year, from around 3% to around 7%. These increases lead to lower prices by discouraging spending.

And it’s safe to work in the housing – virtually all signals flash red.

Higher rates mean borrowers pay more for loans, which means higher monthly payments, which gives buyers less buying power.

A buyer of a $400,000 home who puts down a 20% down payment would make a monthly payment of about $1,770 on a 3% loan, according to Zillow, the home search and listing company. At 6%, the monthly payment jumps to $570. At 7%, it’s $780 more.

Some budding buyers are targeting less expensive homes, which may mean looking further afield. Some people stop looking, at least for now.

Fewer buyers meant less intense competition for homes, the bidding wars that drove prices up dramatically. And because homes listed for sale are less likely to be bought immediately, more homes are on the market.

Inventory — the number of homes put up for sale — has soared 247% over the past five months, Ryan said.

Although many potential buyers are still there, the balance has moved away from a market of full sellers. Not only are homes taking longer to sell, but about one in five sellers have lowered their asking price before a sale.

Another sign of change is the number of sellers who now know they have to work harder to market and show their homes in order to sell them, Ryan said: The number of open houses has more than tripled.

Kristen Jones, broker and owner of Re/Max Around Atlanta, said it’s important not to look at recent comparisons because the pandemic period has been so unusual. Additionally, larger demographic forces may still fuel the market, even if interest rates are higher.

Stocks may have risen dramatically, but they’re still lower than 2019, she said.

The large number of young professionals means demand isn’t going to evaporate and the large number of baby boomers looking to downsize means there will be owners motivated to sell, Jones said.

“There is still a lot of pent-up demand from buyers, and we expect to see more activity in early 2023, especially if inflation moderates and rates come down a bit,” she said.

Metro Atlanta*, real estate market, October

Instantaneous

Median selling price: $379,455

Number of houses sold: 4,800

Homes for sale: 13,470

Thirty-year fixed rate mortgage: 6.95%

October compared to last year

Median selling price: +7.5%

Number of houses sold: -31.8%

Houses for sale: +79.6%

Fixed rate mortgage over 30 years: +125%

October signals a slowdown

Days to market: up 167% since June

Inventory (homes for sale): up 247% since June

Price: 8% drop since June

Open days for listed houses: +247%

Number of sales: down 31% in one year

September-October comparisons

2021: price down 1%

2022: price down 16%

2021: sales down 3.2%

2022: sales down 16.6%

* 12 counties centered on Atlanta

Sources: Georgia Multiple Listing Service, Federal Home Loan Mortgage Corp.