By Brent Ruffner | Daily Independent
The Valley’s homebuying scene remains buffered by interest rates, high prices and low demand.
Activity remains low and buyer demand is about 20% below levels from 2019, according to Tina Tamboer, housing analyst with The Cromford Report.
Some potential buyers are reluctant to jump into the Phoenix market where median home price currently sits at $455,000, Tamboer said.
“(People) are struggling to get within a range they are comfortable with,” Tamboer said. “…Everybody is looking at price.”
During fourth-quarter 2023, only 21% of listed homes in the Phoenix area were affordable to those making a median household income of $99,000 per year, Tamboer said.
The figures — which come from the American Community Survey of Housing and Urban Development — uses 2021 U.S. Census data for 2023 affordability measures, she said.
Price is a big motivator keeping some buyers out of the market. Another is that mortgage rates remain elevated. As of April 25, the average rate on a 30-year fixed-rate mortgage was 7.17%, according to the Freddie Mac website.
In March 2022, that rate was 6.42%, the website stated.
Those rates are not likely going down anytime soon after the Federal Reserve Board voted to keep its benchmark rate unchanged during a vote this week at between 5.25% and 5.5%.
Small changes — where the rate goes down a few percentage points — convince some buyers to jump into the housing market, Tamboer said.
Overall, the Phoenix market is balanced — with areas such as Buckeye and Litchfield Park fitting into that category, she said. Other cities — such as Phoenix, Peoria and Chandler — are considered seller’s markets, Tamboer said.
“It depends on how much new home construction is in the area and whether (or not) there is competition.”
In areas where there is no new home construction — such as in the city of Phoenix — there aren’t sales concessions or buyer competition, the housing analyst said.
But in places such as Buckeye — buyers can potentially get a cheaper mortgage rate with sellers agreeing to some concessions like rate buydowns, she said.
The “expectation” is rates could come down this year, Tamboer said.
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