Phoenix Real Estate Market Update

Photo byCaitlin McKeague

Is the Phoenix Housing Market Stalled?

Many in the Phoenix housing market feel like they're revving their engines at the starting line of a race, waiting for the green light. But despite early optimism for a robust market, things seem to have hit a snag.

The New Normal: 7% Mortgage Rates?

An article titled "Welcome to the Housing Market's New Normal: 7% Mortgage Rates in All" points to a potential shift in the market dynamics. Zillow's senior economist suggests that while inventory remains scarce by pre-pandemic standards, buyers are not rushing to every open house like before.

Mortgage Rates: A Bumpy Ride

Last week, mortgage rates didn't see significant changes. However, they've been steadily climbing since the beginning of February, now hovering around 7.08% according to recent data. Speculation about rate cuts later in the year is rife, but nothing definitive is on the horizon for now.

Mixed Signals: Existing Home Sales

January's existing home sales offer mixed signals about the market's trajectory. While sales dipped by 1.7% annually, they improved by 3.1% compared to December. Affordability remains a key concern, as highlighted in an article discussing the time it takes to save for a house in Arizona.

New Developments in Maricopa

On the new construction front, DR Horton's acquisition of 11 acres in Maricopa for 456 homes showcases ongoing development efforts. Driven by the need for more affordable options, such developments aim to cater to the growing demand.

Resale Homes: A Slowdown

Resale homes haven't seen much activity lately. The Cromford Market Index (CMI) sits at 117, indicating a seller's market but with waning momentum. Chandler and Gilbert lead in market strength, but overall, the market seems to be losing steam.

Concerns Over Sales Volume

Despite hopes for a spring rebound, sales volume hasn't picked up as anticipated. The annual closing rate is down, with the city of Phoenix experiencing a decline in single-family closings. This sluggishness raises concerns about the market's future trajectory.

The Impact of Interest Rates

Interest rates remain a significant factor affecting market dynamics. While buyers may be adjusting to the idea of higher rates, the reality of sizable mortgage payments is daunting. The uncertainty surrounding rates and affordability adds to the market's complexity.

In conclusion, the Phoenix housing market appears to be at a crossroads. With uncertainty lingering over interest rates and affordability, the market's future direction remains unclear. Whether it's poised for a rebound or further slowdown, only time will tell.

For those navigating the market, seeking expert guidance and staying informed is crucial. Whether you're buying or selling, understanding the market dynamics and exploring available resources can help you make informed decisions in these uncertain times.