Yes. Home prices are actually going up during a downturn. In what remains a conundrum to many, the metro Atlanta housing market, as measured by home prices, has enjoyed one of the strongest years this decade. To be sure, this isn’t a typical recession, but we usually don’t see home price growth as strong as this during economic downturns. The New York Times recently wrote about how strange this housing market is. In this piece, the authors wrote about the historically low inventory we have today, and using our basic knowledge of supply-and-demand, maybe that’s one of the culprits for our surging home prices.

Let’s turn to the data!

(Source: FHFA Home Price Index, Seasonally Adjusted)

First of all, as the chart above shows, the surge in home prices isn’t just happening here in Atlanta. In fact, we rank in the middle-of-the-pack for year-over-year when compared to the 20 largest metro areas, but, still, an 11 percent increase during a pandemic is impressive. And as Figure 2 shows below, 2020 represents the second-largest annual increase this decade, trailing only 2013. And, remember, metro Atlanta was struggling to get out of the Great Recession back then, so that increase in 2013 was coming after several bad years for the housing market.

(Source: FHFA Home Price Index, Seasonally Adjusted)

So, the question remains… why? Well, lumber prices have soared over the past year, so that contributes to higher costs of building. Certainly, historically low interest rates have something to do with that, which is keeping demand pretty solid, as is shown in Figure 3 below. This comes from, and the Housing Demand Index tracks unique property searches in an area, so it is a non-traditional view of demand. Regardless, it does show that Atlanta’s overall demand remains solid, ahead of the U.S. total even. The problem, however, lies on the supply-side of the equation.


Figure 4 below shows where Atlanta stands among the 50 largest metros in the country. This measures for-sale inventory as tracked by active listings on in each metro area and compares them to the level of one year ago, February 2020. As can be seen, not only has Atlanta not recovered to pre-pandemic levels of for-sale inventory, but our index value also ranks as one of the lowest in the country.

(Source: Source:

Economics 101 tells us that if you have low supply with average-to-above average demand, prices will go up, which is exactly what is happening in metro Atlanta and throughout the nation.