Breaking Down Atlanta's Housing Crisis: 2021 vs. 2024
The Atlanta housing market, like many others across the U.S., has experienced significant changes over the past few years. A comparison between 2021 and 2024 highlights how rising home prices, interest rates, and the increasing financial burden on households have widened the affordability gap. Let’s take a closer look at the data and what it means for the Atlanta market.
Housing Costs in 2021 vs. 2024
In 2021, the median home price in Atlanta was around $295,000. Fast forward to 2024, and that number has skyrocketed to $380,000—an increase of $85,000 in just three years. Meanwhile, mortgage interest rates have more than doubled from 3% in 2021 to 6.5% in 2024, adding to the financial strain for potential homebuyers.
These two factors—rising home prices and higher interest rates—have caused monthly mortgage payments to surge. In 2021, the typical payment on a median-priced home was about $1,660. By 2024, that payment has increased to $2,730, a difference of over $1,000 per month.
The Growing Burden on Homeowners
While the median household income in Atlanta has risen from $64,000 in 2021 to $81,000 in 2024, it hasn’t kept pace with the escalating costs of homeownership. In 2021, homeowners were spending about 31% of their income on housing, which is just under the recommended threshold of one-third. But by 2024, that figure has jumped to 40%.
This increase in housing costs means that more of Atlanta’s residents are allocating a larger portion of their income toward their homes, leaving less for other essential expenses such as student loans, childcare, and retirement savings.
Proposed Solutions to Atlanta’s Housing Crisis
During the recent Presidential debate, two potential solutions were proposed to address the housing crisis. Each offers a different approach to tackling the affordability challenge.
$25,000 Homebuyer Credit: This proposal would provide new homebuyers with $25,000 toward a down payment. While this sounds appealing, it could inadvertently make the situation worse. As no additional housing units are being built to meet this increased demand, home prices would likely rise further, making homes even less affordable for the very people this policy is meant to help.
Building 3 Million New Homes by 2028: The second proposal focuses on increasing the supply of housing by building 3 million new homes by 2028. This solution tackles the root of the problem by addressing the shortage of homes, which could help stabilize prices and make housing more affordable in the long run.
A Balanced Approach
One potential solution to avoid exacerbating the problem would be to delay the $25,000 homebuyer credit until after new housing units are built. By increasing the supply of homes first, the additional demand created by the credit could be met without driving up prices further. This balanced approach could help create a more affordable and stable housing market in Atlanta.
An alternate strategy is to implement a phased rollout of the $25,000 homebuyer credit, tying its availability to the introduction of new housing supply. Rather than waiting until all 3 million homes are built, the credit could become gradually accessible as an adequate number of new homes are added to the market.
This way, as more housing supply enters the market, increasing affordability, the additional demand generated by the credit would be balanced by a corresponding rise in available properties. Such a middle-ground approach would help prevent home prices from rising too quickly due to heightened demand without sufficient housing to support it. This strategy would create a more stable, sustainable market for both buyers and sellers in Atlanta, promoting long-term affordability.
By linking the homebuyer credit to new housing milestones, we can ensure that more people benefit from homeownership opportunities without contributing to the housing price inflation that can come from unchecked demand. This balanced approach offers a realistic solution to help address Atlanta’s housing needs while promoting affordability.
Conclusion
The data paints a clear picture: between 2021 and 2024, homeownership in Atlanta has become significantly more expensive. Rising home prices and interest rates have pushed monthly mortgage payments beyond what many households can comfortably afford. While proposed solutions like the homebuyer credit seem helpful on the surface, they could further inflate prices without addressing the underlying issue of limited housing supply.
Building more homes is key to solving the crisis and ensuring that more Atlantans can afford to buy homes without sacrificing their financial well-being. Addressing both demand and supply issues will be critical in restoring balance to Atlanta's housing market.
