As 2025 comes to a close, SRP Lending is identifying a wave of encouraging economic shifts that, while sometimes overshadowed by national headlines, carry significant implications for housing. Rising wages, cooling inflation and recent tax adjustments are narrowing the affordability gap for potential buyers — a welcome trend after several years of volatility.
Affordability Improves as Wages Rise
Although recent economic data hasn’t dominated national headlines, several indicators point to improved affordability. Wages are rising faster than inflation, and updated tax policies are putting more money back into consumers’ pockets. Together, these shifts are strengthening buyer confidence and easing pressures that have shaped the market since 2022.
Over the past three years, elevated interest rates and rising construction and resale costs have strained many buyers. As mortgage rates climbed, many first-time buyers were priced out, especially in the under-$400,000 price range. Limited supply and higher monthly payments slowed activity, and move-up buyers hesitated to trade sub-5% mortgage rates for loans above 6%.
Market Rebalances After Years of Volatility
Despite these challenges, the market has entered a more balanced phase. Historically, home prices follow inflation, but older homes often come with maintenance needs and outdated features compared to new construction. With inventory rising in both new and resale markets, price appreciation has cooled. Metro Atlanta home prices have remained essentially flat in 2025. Sellers who price realistically continue to see strong interest, while those holding out for last year’s highs often face more time on market.
Mortgage Rates Remain Elevated but Manageable
Mortgage rates remain higher than many buyers would prefer, but the broader rate environment provides long-term perspective. The Federal Reserve has cut interest rates three this year. Mortgage pricing, however, is more closely tied to the 10-year Treasury yield, which is held between 4% and 4.1%. Analysts say rates could settle into the high-5% range, though that shift hasn’t occurred yet. Still, a 6% mortgage is within historical norms, and as the market moves further from the 3% era, buyers are expected to adjust.
Within this environment, Atlanta’s homebuilding market remains relatively healthy. New home starts and sales have stayed in balance this year, supported by disciplined builders and, in some areas, municipal factors that have slowed permitting. Material and labor costs are stabilizing after several turbulent years, giving builders a reprieve and improving predictability for planning.
Small and mid-sized builders continue to excel by identifying opportunities that match today’s buyer preferences. They are selecting locations and floor plans that offer value, flexibility and modern features. And while economic trends play a role, most buyers ultimately move for personal reasons — marriage, divorce, growing families, school changes or the need to care for aging parents. In many cases, these life transitions outweigh interest-rate concerns.
“As we look ahead, we’re encouraged by the steadying forces taking shape in the market,” said Geoff Deckelbaum, President of SRP Lending. “The fundamentals are improving, and builders are well-positioned to meet buyers where they are with thoughtfully designed homes.”
For more information about SRP Lending’s services, please visit www.srplending.com.
About SRP Lending
SRP Lending is a leading private money lender providing quick, flexible, and straightforward loan options for builders and contractors. With a customer-centric approach, SRP Lending prioritizes efficiency, flexibility and customer control over the lending process, offering an effective alternative to traditional bank financing.
For more information, contact SRP Lending at 678-592-7176 or visit www.SRPlending.com.
