The hope of the Valley’s housing market developing more listings to ease three years of price crunches is evaporating in the rising heat.
Higher interest rates and homebuyers needing to prove credit worthiness in a Phoenix market comes as a slump in supply is occurring, according to local experts.
The Valley has the lowest number of new listings in “at least” 23 years, said Tina Tamboer, a housing analyst with the Cromford Report.
Potential buyers have fewer choices of homes to buy while mortgage rates remain elevated despite a downward trend where the average rate for a 30-year fixed mortgage is 6.28%.
One year ago, the average mortgage rate was much lower at 4.72%, according to Freddie Mac.
Since March, the Arizona Multiple Listing Service loses an average of 29 listings each day, Tamboer said.
“We are not listing enough homes on a daily basis to offset what is selling,” Tamboer said.
The Federal Reserve has raised “its main borrowing rate nine straight times” in an effort to cool inflation on items such as groceries and gas, which has had a huge impact on buyers, as an increase in interest rates is pushing up monthly payments, even if homes don’t rise in price.
“Though supply remains low, home prices appear to be leveling off, another development that could lure buyers back into the market,” the Associated Press reported. “The national median home price slipped 0.2% from February last year to $363,000, marking the first annual decline in 13 years, according to the National Association of Realtors.”
While existing homes are struggling with supply, buyers are getting a break on rates from builders, said Steven Hensley, a housing analyst with Zonda.