State of Housing Report

State of Housing Report The Problem Georgia does not have enough attainable housing inventory to accommodate our growing workforce and booming economy.

The Need Home ownership is a proven method for growing wealth and elevating families into greater economic mobility. Our state must provide a greater variety of housing options, to ensure there are various price points for prospective homebuyers. This is especially true as consumer preferences have evolved.

Addressing the need will require nimble regulations and incentives to stimulate greater housing inventory and increase the pool of eligible buyers, especially in light of interest rates.

Fast Facts Georgia housing inventory 60% has decreased by 60% over the last 5 years.1

Georgia CEOs report that housing is the 2nd most important issue impacting Georgia’s ability to attract, develop, and retain a competitive workforce. 3

29% of children live in high housing cost burdened households. 2

The number of first-time home buyers in Georgia has declined by 8% over the last year.4

The average county in Georgia has seen a 53.6% increase in monthly housing payments per month. 5

The Challenge Georgia was recently named the best state in which to do business for an unprecedented 10th year in a row. Over the last five years, the state has experienced year over year record economic growth from over 2,000 project locations with significant job creation, over 70% of which is taking place outside of Atlanta.

This incredible success means communities across the state of Georgia are facing unique challenges that must be met with innovative solutions in order to fully capitalize on the economic opportunity. Many Georgians are not able to work in the community they call home and consistently Georgia businesses report the lack of attainable housing is impacting their ability to retain and attract talent. Furthermore, the state’s homeownership rate peaked in 2002 and has declined 7% since then6. Georgia has a housing crisis.

By 2050, there is a projected 46% increase in jobs 9 and a 22.6% increase in population. 8 Georgia’s inventory levels of available housing stock have seen a sharp decline of the past five years as housing inventory levels have dropped from an average of 5.5 months of supply in 2018 to an average of only 2 months supply in 20231.

State of Housing Report | Georgia Chamber Foundation

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A healthy community housing stock level is considered to be around 6 months of supply. The number of Georgia counties with at least a 6-month supply of housing dropped from 75 to only 9 counties from November of 2018 to November of 20231. This indicates that the rate at which new housing is being developed is not adequate to accommodate the rate of population growth in the state.

Since 2018, there has been an 88.6% decrease in the number of communities that have a healthy housing stock.1 Limited inventory is due in part to the slowdown in development. However, rising interest rates have also led many families to stay in their current home rather than move

Change in “Months of” Housing Inventory

to a new one that might better meet their needs. This reduced churn further decreases the available homes, which is significantly impacting first-time homebuyers and middle income earners. In 2022, only 22% of Georgia home buyers were first- time home buyers as opposed to the national average of 26%. In 2021, 34% of U.S. home buyers were first-time.4 The culmination of these factors over time has led to a decrease in homeownership. Georgia’s home ownership rate has been declining since a peak of 72% ownership in 2002. Despite upward trends in 2016, the current rate of home ownership has fallen to about 64%.6

Georgia as a whole has sustained a 60% decrease in housing inventory, dropping to just over 2 months of housing inventory available in 2023. Georgia’s average county in Hub and Metro Atlanta communities retain a similar inventory of about 2 months but have sustained larger decreases overall. Hub communities, which serve as our regional job centers outside of Atlanta, have suffered the greatest decrease in inventory of over 66%. This is likely due to population growth in these regions. Rural communities, however, have not gone untouched. The average county in rural Georgia has only a three-month housing inventory, down from over eight months in 2018.1 State of Housing Report | Georgia Chamber Foundation

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Average Months of Inventory Region

2018

2023

Change

Georgia

5.51

2.17

-60.6%

Rural

8.31

3.09

-62.8%

Hub

6.12

2.05

-66.5%

Metro Atlanta

4.92

2.01

-59.2%

Table sourced in Partnership with the Georgia Association of Realtors

Click here to learn how your county’s inventory has changed over the last five years.

Georgia home prices have fluctuated with inflation, but the median home price has risen 44% from June of 2019 to June of 20231, and while housing unit approval continues, rates have decreased from the initial increase going into 2020. This indicates there has been a slowdown in the development of new stock. The low housing supply continues to drive up demand, contributing to increased home prices.

The Opportunity National trends including record inflation, rising mortgage rates, and workforce shortages are certainly impacting the ability of Georgians to afford housing. While these are not within the purview of state and local leaders there are a number of factors that can be altered at the state level which would make a dramatic difference for consumers.

Our current housing stock is not meeting our current needs and will not support our future growth trends. These challenges are pervasive, but a multi-faceted strategy to create more diverse, attainable housing inventory in communities across our state is required to address our housing crisis. Increasing the supply of housing is vital, especially for first-time homebuyers and middle-income Georgians, because they are currently most disproportionately impacted.

Our Recommendations 1. Support partnerships between local communities and the business community which generate appropriately streamlined processes for creating additional housing inventory.

2. Encourage policies which incentivize local communities to construct new housing stock of all sizes.

3. Expand and support programs which seek to help Georgians become homeowners and increase financial stability.

State of Housing Report | Georgia Chamber Foundation

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Sources 1. Georgia Association of Realtors 2. The Annie E. Casey Foundation Kids Count Database 3. Georgia Chamber of Commerce CEO Survey 4. National Association of Realtors, “Georgia Profile of Home Buyers and Sellers” 5. The Atlanta Federal Reserve, Home Ownership Affordability Moniter 6. Censues Bureau Housing Vacancies and Homeownership Survey 7. The Georgia Public Policy Foundation, “Government Regulation in the Price of a New Home” 8. The Governor’s Office of Planning and Budget 9. Woods and Poole Economics

State of Housing Report | Georgia Chamber Foundation

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