Mortgage Rates in Georgia: Buying vs Renting a House After 2024 Rate Changes?

By Alvaro Moreira
6 min read

Mortgage Rates in Georgia: Buying vs Renting a House After 2024 Rate Changes?

Key Takeaways:

  1. Mortgage rates in Georgia are falling, which may positively impact the housing market.
  2. Current high-rent pricing drains income and offers no value, making buying more appealing.
  3. Preapproval gives homebuyers a leg up on those without it and establishes their budget.
  4. Tools, like a rent vs. buy calculator, help first-time homebuyers understand what they can afford.
  5. Potential homebuyers should arm themselves for the competitive market with research, preapproval, a strong credit score, and an understanding of their loan options.

Many prospective homebuyers were spooked by the last few years of inflated home prices and mortgage rates in Georgia. But they may finally catch a break. Freddie Mac recently reported that the 30-year fixed mortgage rate dropped to its lowest level in two years. The decline has been modest and incremental, but it could encourage first-time and experienced homebuyers nervous about entering the housing market.

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With rents continuing to climb and offering little value, it might be time to reevaluate whether homeownership is the better financial choice. Tools like a rent vs buy calculator can inform decisions for those on the fence about which is right for them. For those who think they might be ready to buy, an important first step is securing pre-approval from a mortgage lender.

Pre-approval helps prospective buyers understand if they qualify for a mortgage and how much they can afford. It also helps them get ahead of those without pre-approval if they want to place an offer on a home.

Why Are Mortgage Rates in Georgia Falling, and What Does It Mean for Homebuyers?

The Federal Reserve cut the federal funds rate, the interest rate at which banks loan money overnight to each other, by 0.5 percentage points to 4.75%-5.00% in September 2024. Reduced inflation and balanced employment and inflation risk spurred the change, which, in turn, influenced mortgage rates.

The 30-year fixed rate mortgage fell to 6.09%, offering some relief to homebuyers who may have been priced out of the market in 2022 when rates topped 7%. The Fed’s actions aren’t the sole contributor to mortgage rates in Georgia, but they have sway, and experts expect further reductions in 2024. If rates follow the projections, they will be around 5.5% in 2025, which could stimulate the housing market.

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While mortgage rates in Georgia are dropping, home prices remain inflated due to high demand and limited inventory. Still, lower mortgage rates are a good start, allowing more homebuyers to gain access where they previously could not. In some cases, lower mortgage rates in Georgia may get some buyers more house for their money.

Buying vs Renting a House: Weighing the Options

Renting is as challenging as buying in this complex housing market and offers few benefits. The upfront and initial monthly costs of buying in Georgia are higher than renting, but renting can be more expensive in the long run, as rents usually increase over time.

A home purchase is an investment that builds equity, whereas every dollar a tenant spends in rent is one less toward their future. Renting also offers less stability. But, there are situations where renting makes sense, such as short-term housing (less than five years) or situations where a tenant wants less responsibility for the property. Homeownership is the smarter financial decision for long-term housing (more than five years) that offers control, value, and security. Homeowners also enjoy tax deductions that renters don’t.

However, not everyone can afford the upfront costs of a house; many don’t have the credit to qualify for an affordable mortgage rate, and some want to wait till mortgage rates in Georgia drop even further. The rent vs. buy calculator allows potential buyers to compare the costs over time. It provides insights such as the breakeven point when the costs of buying vs renting a house are about the same.

Using Moreira Team’s Rent vs. Buy Calculator

Choosing between buying vs renting a house is a big decision. Moreira Team offers a rent vs. buy calculator, a simple tool to help potential homebuyers weigh their options with the following information at the ready:

For renting

  • Monthly rent
  • Renter’s insurance cost
  • One-time security deposit costs

For buying

  • Prospective home price
  • Down payment amount
  • Mortgage term length
  • Mortgage interest rate
  • Closing costs
  • Homeowners association fees (as applicable)
  • Homeowners’ insurance cost
  • Property taxes

First-Time Homebuyer Checklist: Steps to Take Before You Buy

For those who have considered the options and elected to buy, there are things first-time homebuyers in Georgia should do to prepare:

1. Get preapproved

Preapproval puts shoppers ahead of the game by locking in an interest rate and giving them a sense of how much mortgage they will be approved for. It is also a measure of how serious a buyer is.

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2. Understand your budget

A mortgage calculator like Moreira Team’s includes factors like down payments, interest rates, and monthly cost, which helps homebuyers understand how much home they can afford so they can outline a realistic budget.

3. Check your credit score

Credit score is everything when securing a good mortgage rate and gaining lender approval. It takes time to build credit and even more time to fix bad credit. However, there are easy things potential homebuyers can do to improve their score, like closing old accounts and canceling unused credit cards.

4. Research the market

Smart shoppers prepare for the housing market by researching the areas they want to live in, including property values, schools, community amenities, and projected future growth of home prices. The objective is to isolate which areas yield the most value for the cost.

5. Understand your different loan options

Many mortgage loan types exist, including the Federal Housing Administration (FHA), Veterans Affairs (VA), and conventional. Homebuyers should educate themselves about the requirements, terms, and benefits of each and whether they qualify.

Get Pre-approved to Beat the Competition

As the mortgage rates in Georgia continue their descent, those with pre-approval have a fast pass to enter the bidding ring. High demand and low inventory make buying a home extremely competitive. Pre-approval demonstrates preparedness and strengthens home offers. It also locks in an interest rate to prevent mortgage rate increases between preapproval and purchase. Here are some things first-time homebuyers need for the pre-approval process:

  • Credit score details
  • Proof of income
  • Bank statements
  • Employment verification

Why Renting Offers Zero Value

High home prices, supply and demand, limited inventory, and inflation can increase rent costs. When tenants put between 30 and 50% of their income toward rent, saving money to buy a home is difficult. And all that income is filling someone else’s pocket.

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When it comes to wealth-building potential, there’s no contest. Buying wins every time because monthly mortgage payments go toward an asset that appreciates, and homeowners can sell or leverage in the future. Buying a home now with a lower mortgage rate will allow you to begin building toward your future.

Calculating What You Can Afford: Use a Mortgage Calculator

Many people assume they can’t afford a home and come to find that they can. Moreira Team’s mortgage calculator is useful for helping potential homebuyers understand what they can afford in a home. Requiring only a few bits of information, including a down payment amount, an interest rate, and a loan term, the mortgage calculator can send you on your way to happy house hunting. Knowing your financial limits allows you to only look at homes that fit within your budget, with a clear idea of monthly payments. It avoids financial strain and supports long-term planning.

Should You Buy Now or Keep Renting?

Mortgage rates in Georgia are decreasing, which will stimulate the housing market. It’s the perfect time for first-time homebuyers to get in on the action so they can start building wealth. Renting has its place, but it offers no long-term value, making it financially difficult for renters to move forward. Homeownership provides lasting benefits and security. Try Moreira Team’s rent vs. buy calculator to make an informed decision and begin your pre-approval process today.