Metro Phoenix Home Prices Hit New Record With No Slowing In Sight
Housing market potential increases 4.7% year over year
By Catherine Reagor | February 16th, 2020
Metro Phoenix home buyers hoping the market will slow and prices will dip shouldn’t expect a break anytime soon. Valley home prices are poised to hit a new record. Sales continue to climb, and the supply of houses for sale keeps shrinking, leading to more bidding wars. Low mortgage rates, rising rents and a growing number of people moving to metro Phoenix are fueling the housing market.
Despite talks of a looming recession or at least an economic slowdown, housing market watchers don’t see the market cooling in 2020. “I don’t see any signs of the market slowing like some people thought it would this year,” said Arizona Housing expert Tina Tamboer of the Cromford Report. “Pending sales show it is going strong, and prices are bound to climb.”
PRICES, SALES AND SUPPLY
Metro Phoenix’s median home price climbed to a record $290,000 last month, according to The Information Market, owned by the Arizona Regional Multiple Listing Service. Valley home sales on the MLS climbed to 95,000 in 2019. That pace is only lower than the boom years of 2004-05 and bust year of 2011 when investors snatched up cheap foreclosure homes.
Low mortgage rates drive housing market potential to 2-year high
By Alcynna Lloyd | February 24, 2020
Low mortgage rates drove the nation’s housing market potential to a two-year high in January, according to First American. Mark Fleming, the company’s chief economist, said the market potential for existing-home sales climbed to the highest level since January 2018.
“Housing market potential increased 1.4% in January 2020 relative to the previous month, and grew 4.7% year over year, an increase of 240,050 potential existing-home sales and the highest rate of yearly growth since December 2017,” Fleming said. “Actual existing-home sales exceeded housing market potential by 1%, or an estimated 53,900 seasonally adjusted annualized sales.”
Fleming primarily attributes this growth to low financing costs and rising demand fueled by Millennial homeownership. “In 2020, 4.8 million Millennials will turn 30 – the peak age for home-buying. They’re fortunate to be entering the housing market at a time of historically low mortgage rates and a strong economy,” Fleming said. “However, there are challenges. Millennials face a very limited supply of existing homes available for sale, especially homes in the entry-level price range.”