Mortgage Rates and Coweta County’s Real Estate Market
By JESS BARRON, Lindsey’s Inc. Realtors
If you have been keeping any eye on the real estate market, then you have noticed mortgage rates have increased dramatically recently.
Mortgage rates were as low as two and three percent at the beginning of 2022. Now, the rates are above seven and as high as eight in some cases. This increase has resulted in a significant slowdown in the real estate market.
A few percentage points may not seem like much, but it makes a huge difference on your monthly mortgage payment. Let’s use the average sales price of $450,000 in Coweta County as an example. If you are putting 20% down on a $450,000 house at three percent interest for 30 years, the monthly payment, with taxes and insurance, would be around $1,879 a month. The same property, with the same terms at seven percent interest, would have a monthly payment around $2,757. That is nearly a $900 difference per month!
This big of a difference in a mortgage payment has decreased purchaser’s buying power. Buyers cannot afford the same prices for homes that they could before the jump in mortgage rates. We are seeing less buyers looking and less activity on listings as many purchasers are waiting to buy.
Another issue for the real estate market is that many homeowners are not moving. The homeowners that have a mortgage on their home at three or four percent are simply not moving unless they must. The difference in their current payment at three or four percent versus what their new payment would be at seven or eight percent on a new home discourages them to move. This means less homes for buyers to look at with an already limited number of listings for sale. The number of new listings in Coweta County were down almost ten percent year-over-year in August per the Georgia Multiple Listing Service (GAMLS).
All of this adds up to a cooled-down real estate market. The number of pending sales in Coweta County year-over-year was down 31 percent in August per GAMLS. This is tough for sellers but a better environment, with less competition, for buyers. A good thing for sellers is that prices and values have stayed up despite all of this. The average sales price of a home in Coweta was up five percent year-over-year for the month of August.
Jess Barron is an Associate Broker with Lindseys, Inc. Realtors and former President of the Newnan-Coweta Board of Realtors.
