Atlanta home prices continued to decelerate into the autumn, rising at a slower pace than the national average, according to a highly-watched national report.
The region’s average price was up 0.1 percent in September from August, although it gained 6.2 percent gain from a year earlier – a stronger increase than most other American metros, according to the monthly S&P/Case-Shiller report.
The overall annual gain for the 20-city index was 5.5 percent.
More than nine years after the burst of the housing bubble, the housing market is still groping its way back to health, said Svenja Gudell, chief economist of Zillow, a housing research and data company.
“The Case-Shiller indices continued to grow at a consistent pace as the summer came to a close, and in line with more recent data that continues to show stabilization, if not quite normalization, in the U.S. housing market,” she said.
The greatest danger is that home prices have risen faster than wages and that higher interest rates could soon add to the mismatch, she said.
“The threat of rising interest rates may soon put a damper on housing affordability,” Gudell said.
That is true in Atlanta, where a 10 percent down-payment on a home with median value would require a buyer to save $16,400, and a 20 percent down-payment would be $32,800, according to Zillow.
The median income in metro Atlanta is about $57,000, so saving that much is hard for first-time buyers, according to Zillow. That is partly because of slow growth in wages and salaries and partly because housing prices are rising.
Since hitting bottom in 2012, the average Atlanta price has risen more than 50 percent, according to the Case Shiller index, which leaves the average still below its 2007 peak.
Atlanta’s is the eighth-strongest resurgence among big metro areas. Only four have seen prices rise past their peaks. Of them, the strongest recovery has been in Denver, which is nearly 24 percent above its pre-recession peak, and Dallas, which is 23 percent above its peak.
“Home prices and housing continue to show strength, with home prices rising at more than double the rate of inflation,” said David Blitzer, chairman of the Index Committee at S&P Dow Jones.
He dismissed fears about the impact of the Federal Reserve raising the benchmark interest rate in mid-December.
“While this will make news, it is not likely to push mortgage rates far above the recent level of 4 percent on 30-year conventional loans, Blitzer said. “It will take much more from the Fed to slow home price gains.
Case-Shiller bases its index on a three-month moving average of sales, using repeat sales of homes and does not include prices of new construction. The numbers are adjusted to account for seasonal patterns.
It is not as up-to-the-moment as some other housing surveys, but the index claims greater accuracy and breadth.
That formula focuses on areas with active markets – which means they are generally healthier than average. That, some analysts say, gives Case-Shiller a somewhat rosy-colored view since Case tends to miss neighborhoods where values are depressed and property does not change hands much.
Averaging the data also blurs the difference between markets that are hot and those that are not.
In metro Atlanta, the larger share of the sales and price resurgence has been on the north side of the region, especially in the near suburbs and popular areas inside the city of Atlanta.