Cost Declines and Mortgage Rates

In addition to the improved employment outlook, a drop in the cost of consumer goods fueled by declining energy prices may put more money in the pockets of potential homebuyers. Consumer prices for all urban consumers in the southeastern states declined 0.6 percent in November, according to the U.S. Bureau of Labor Statistics. Energy prices led the slide, falling 6.2 percent since October.

Mortgage rates for the Atlanta region showed some slight variation in the final week of 2014, according to BankRate. The 30-year benchmark rate fell from 4.04 percent to 4 percent, just above the national average of 3.99 percent. Atlanta area mortgages averaged 0.23 discount and origination points. Benchmark 15-year mortgage rates edged upward from the previous week from 3.31 to 3.33 percent.

Rates remained low throughout the year, but Federal Reserve Chair Janet Yellen signaled in her last press conference of 2014 that interest rates can be expected to increase in 2015, in light of the Fed’s analysis of the nation’s modest economic growth in the Fourth Quarter. Household spending and business investment are both up somewhat, though the Fed cited the housing sector’s growth as “slow.” As employment numbers continue to improve and inflation climbs toward the Federal Reserve’s target rate of 2 percent, mortgage rates also may creep up.

Eric Rothburg, senior mortgage banker at Heritage Bank Mortgage, found that low interest rates helped the market by encouraging strong purchase volume.

“The fourth quarter was solid, especially with new home sales and end of the year pricing incentives by builders,” Rothburg said. Consumer confidence is getting stronger with the economy slightly improving each month and job stability increasing.”

Changes to interest and mortgage rates could finally spur more of Atlanta’s growing population of Millennials. Last April, Forbes ranked Atlanta as the 25th-best city for Millennials age 25 to 34, based on findings by Niche.com. The criteria examined included median rents, crime rates and unemployment, as well as wages and education levels. People age 25 to 34 made up about 15 percent of the city’s population, while those age 18 to 24 constituted about 9 percent. Nationally, about 13 percent of the population falls in the 25 to 34 age group and 10 percent are age 18 to 24.