Conditions for Arizona’s home buyers are – arguably – more difficult today than they’ve ever been. Interest rates on a new 30-year mortgage loan are over 7%, which is higher than they’ve been since 2001.
The U.S. and Arizona housing markets are in the midst of a sharp correction – the first since the Great Recession. Prices peaked in June and have fallen over 3% through September. Ongoing rising interest rate pressures, a collapse in buyer interest, and lags in the construction and permit approval cycle will likely put continued downward pressure on prices over the next 6-12 months.
Arizona – and particularly the Phoenix metro market – is now an expensive place to live. The current inflation crisis has accelerated a longer-run trend in the relatively rapid appreciation of cost of living here relative to other major metro areas.