The past two years have been challenging for those in home sales and prospective buyers, but better times may lie ahead, according to Lawrence Yun, Chief Economist of the National Association of REALTORS® (NAR). Speaking at NAR NXT, The REALTOR® Experience, Yun predicted a brighter outlook for 2025 and 2026, forecasting higher home sales and moderating mortgage rates. He and Jessica Lautz, NAR’s Deputy Chief Economist, shared insights into the evolving profiles of home buyers and sellers. Here’s a closer look at the key forecasts and how these trends may uniquely impact Atlanta, Georgia.
Home Sales Expected to Rise
Yun’s forecast includes a 9% increase in existing home sales and an 11% jump in new home sales for 2025, followed by another strong increase in 2026. With job growth projected to add nearly 2 million jobs each year in 2025 and 2026, a more stable economic environment may spur Americans to make real estate moves, Yun suggested.
Atlanta Perspective: In Atlanta, job growth has outpaced the national average, particularly in sectors like tech, finance, and entertainment. This trend may drive even higher local demand, as new residents are attracted by Atlanta’s favorable job market and relatively affordable home prices compared to other major cities. The inventory shortage in Atlanta, however, has been a constraint, limiting options for buyers—a factor that could intensify competition in 2025.
Mortgage Rates to Moderate
The direction of mortgage rates will heavily influence the housing market’s trajectory. Yun expects the 30-year fixed mortgage rate, which has ranged from 6.08% to 7.44% recently, to settle at the lower end of this range over the next two years. Although the Federal Reserve recently cut interest rates, Yun cautions that mortgage rates may not decrease as quickly, given the significant U.S. budget deficit. However with the incoming Trump administration, this may have more influence on significant rates drops.
Atlanta Perspective: Atlanta’s housing market, known for its affordability, could benefit if rates moderate as predicted. Historically low rates propelled the market’s growth in 2021 and 2022, but the recent rise to over 6% has discouraged buyers. Lower mortgage rates would attract buyers who have been waiting, possibly spurring the luxury market, a key area of Atlanta’s real estate scene.
Home Prices to Increase Gradually
After record-breaking appreciation in recent years, Yun anticipates more modest home price growth. NAR forecasts median home prices to reach $410,700 in 2025, a 2% increase over 2024, with another 2% rise in 2026.
Atlanta Perspective: Home values in Atlanta have seen robust growth, with some areas experiencing double-digit appreciation in recent years. While price growth is expected to slow, popular neighborhoods like Buckhead and Midtown may see continued demand-driven appreciation due to their appeal among both young professionals and affluent buyers. The sustained influx of corporate relocations into the Atlanta metro area could also drive demand for high-end properties, pushing prices higher than national averages.
Changing Buyer Demographics
Lautz presented NAR data revealing shifts in buyer demographics: more all-cash buyers, older first-time buyers, an increase in multigenerational households, and a rise in single female buyers. These trends highlight the growing challenge of affordability, which is prompting buyers to pool resources or rely on gifts, loans, and other financial support.
Atlanta Perspective: Atlanta’s strong appreciation has elevated entry-level home prices, impacting first-time buyers and young professionals moving to the city. The growth of multigenerational households aligns with Atlanta’s diverse population, where cultural norms support family cohesion. Popular suburbs like Sandy Springs and Decatur, known for family-friendly amenities, may see increased interest among these multigenerational buyers seeking larger homes.
Allure of City Living on the Rise
After a shift to suburban areas during the pandemic, city living is regaining its appeal, especially as buyers seek the vibrancy and amenities urban centers offer.
Atlanta Perspective: Atlanta’s urban revitalization and investment in areas like the BeltLine have made city living increasingly attractive. Neighborhoods like Old Fourth Ward, West Midtown, and East Atlanta Village have drawn young buyers and investors alike, eager to live near cultural attractions and nightlife. As demand rises, these areas may experience intensified competition, adding value to nearby property markets.
Conclusion
With job growth, moderating mortgage rates, and evolving buyer demographics, Atlanta’s real estate market is poised for growth in 2025 and 2026. However, challenges such as limited inventory and affordability will likely continue, especially for first-time buyers and young professionals. Atlanta’s unique appeal—a combination of affordability, economic opportunity, and cultural richness—will keep the city an attractive destination for a wide range of buyers, from cash-paying investors to multigenerational families looking to set roots in the dynamic Southeast.