PHOENIX (3TV/CBS 5) — Homebuyers tired of being left out of the Valley’s scorching real estate market may finally be getting some relief. HomeSmart Realtor Angie Koehle said the number of homes on the market has increased dramatically lately, giving buyers more options and creating more competition. “Every morning I get up to check MLS (multiple listing service) to see how many homes are active and coming up,” Koele said. “This morning it was 8,800. Last year at this time it was 3,500, so there’s definitely a change going on right now.
The recent rise in mortgage interest rates has had a significant impact on the real estate market, which should stabilize prices. According to the Arizona Regional Multiple Listing Service, the median home price in the Phoenix area was $392,500 in May 2021. The median home price in May 2022 is $480,000.
Tina Tamboer is senior housing analyst at the Cromford Report, which provides daily insight into the housing market. She expects home values to continue to rise in the coming months, but at a much slower pace. “After running at top speed for two years, coming back to a regular market is going to feel like we just passed a cop at 200 mph, and now we’re slamming on the brakes,” Tamboer said. “That’s kind of how it feels.”
Higher interest rates have reduced the number of buyers bidding on homes, but Fairway Mortgage’s Jeremy Schachter said he could shut some first-time buyers out of the market. “For someone who might have been about to prequalify, say on a $400,000 purchase, their mortgage payment would now be about $500 more if they bought the house today.”
A loan on a $400,000 home six months ago at an interest rate of 3.5% would result in a monthly mortgage payment of $1,796. A loan on the same house at the same price now, at 5.75%, would cost $2,334 per month. That’s an increase of $538 per month. Property experts do not believe there will be a real estate crash this year, insisting that home values remain strong.
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