Black Atlanta buyers face tough market – Capital B News

Craig Dollar, a forklift driver, and his wife Kimberly, an Atlanta public schools teacher, have dreamed of buying an affordable home in Atlanta for their family since 2006. But saving enough is a challenge in a metro area where prices rents have increased three times faster than wages. since 2019 and the median house price has skyrocketed in recent years.

Kimberly Dollar, 42, said the family’s search became more serious earlier this year when they realized rent prices for larger apartments in their west Atlanta neighborhood can be more expensive than a monthly mortgage payment.

“I went to an apartment complex and the rent was $2,350,” Kimberly Dollar told Capital B Atlanta Saturday afternoon. “I said, ‘Who the hell is willing to pay $2,350 and not be sure if it’s going to be there for a long time?'”

The Dollars were among more than 700 people who attended Invest Atlanta’s Homeownership Month Open House Tour in southwest Atlanta last week, where they learned about the program agency’s $20,000 down payment assistance for eligible applicants and more affordable Atlanta Land Trust properties – with potentially less strict. financing options — available for sale in the city’s southwest neighborhoods.

Black potential buyers made up the overwhelming majority of those in attendance.

June is National Homeownership Month, a time when government officials highlight programs designed to help more people realize the American dream of owning their own home. These efforts may be greater here than in other metropolitan areas because of changes in the local real estate market that put buyers at a disadvantage.

In Atlanta in 2024, buying your first home doesn’t just mean learning how to hire an agent, shop for a mortgage, and make an offer. It also means dealing with a housing shortage exacerbated by private equity firms sucking up the supply of available housing faster than anywhere else in the country. That means paying interest rates nearly double what they were less than five years ago on homes whose prices have skyrocketed.

All of this makes it even more difficult to mentor potential buyers like those at the Invest Atlanta seminar. High housing prices and a lack of affordable housing are “huge problems” contributing to general buyer pessimism, said Anita Allgood, Invest Atlanta vice president for single-family and homeownership services. to the property.

“Homeownership education and financial literacy and awareness are also a huge challenge,” Allgood said. “The reality is that real estate is still booming.”

Get a price

By the early 2000s, Atlanta had a national reputation as an affordable city with a growing and prosperous black middle class. Today, it is much more difficult for these same people to afford to buy here.

The median price of a home in Atlanta reached $421,000 this spring, up nearly 7% from the previous year, according to Redfin, which tracks home sales.

Home prices in Georgia have jumped over the past four years, according to the Georgia Association of Realtors, which says the typical buyer is paying more to get less.

“The price spike increases on average about 4 to 5 percent year over year,” GAR spokeswoman Brandie Miner said. “(Housing prices) aren’t going down and no one expects them to go down anytime soon.”

This situation is made worse by the surge in interest rates following the Covid-19 pandemic. The average rate for a 30-year fixed mortgage was 6.99% as of June 6, according to Freddie Mac. For comparison, the average rate never exceeded 3.99% between the weeks of May 30, 2019 and March 10, 2022.

This means it costs a lot more to buy the same house than it did three years ago. Monthly principal and interest payments on the median-priced home in metro Atlanta would be $2,658 at the current average rate, up from $1,686 at 3%, a common rate during the pandemic. This assumes a buyer has saved about $21,000 needed for a 5% down payment on the median-priced home and it doesn’t include the additional hundreds of dollars needed each month to pay property taxes or insurance.

Private equity firms

Competition with private equity firms and other investors offering all-cash deals for Atlanta homes has also been a challenge for homebuyers like West End resident Kenneth Porter, who attended the Saturday’s Invest Atlanta event.

The 35-year-old assistant location manager in the film and television industry said he almost gave up on buying a house in his West End neighborhood last year after an investor with deep pockets stepped in and outbid him for a renovation.

Georgia poses the nation’s greatest risk to Wall Street investments in housing, causing housing market disruption, rent increases and unsafe conditions, according to an analysis by the Private Equity Stakeholder Project watchdog group published in April.

A Georgia Tech study released in May found that Atlanta neighborhoods lost $1.25 billion in equity to home buyers over a 12-year period beginning in 2010. Most of the equity lost, or $681 million, came from the city’s majority-black neighborhoods, the study authors found. . Porter says he was preempted by one of those deals.

“I got a phone call one day saying, ‘Hey, someone literally just knocked on my door and made me an all-cash offer above the asking price’ and ‘I had the hands tied,’” he said, recalling the conversation he had with the owner of the house he was looking to buy.

“I couldn’t blame him,” Porter said of the home seller, “but at the same time, it was just very discouraging.”

Stuck in the middle (class)

Attendees at last Saturday’s Invest Atlanta event met enthusiastic real estate agents and mortgage lenders who set up booths in an adjacent parking lot and advised buyers on what they needed to know to get a mortgage. Ramphis Velasquez, community lending manager at Prosperity Home Mortgage, said some applicants are surprised to learn they can qualify for a Federal Housing Administration (FHA) mortgage with a credit score as low as 580. Other typical requirements include a debt-to-income ratio of 43% and a down payment of 3.5% of the price of the home.

“I see a lot of wide-open eyes when I start letting them know what they’re thinking…that’s actually not the case,” Velasquez said.

But for some, no amount of home-buying education solves the problem of making too much money to qualify for assistance while struggling to save.

Down payment assistance programs can help black families on the lower end of the socioeconomic scale, but not middle-income families like Davida Huntley and her husband Raymun.

The Huntleys estimate their combined household income at about $180,000 a year, too high for them to qualify for many aid programs. But the high cost of rent also makes it harder to save enough for a typical down payment, they said.

“To make that amount of money, you always need help because you don’t come to the table with $50,000 down for the type of home you’re looking for,” Davida Huntley said.

Despite the obstacles, the Dollars are still determined to find housing and have given good advice to others like them.

“Stay diligent. Do not abandon. Build your circle of support,” Kimberly Dollar said.