The Phoenix housing market has been hot for years, but recent trends suggest a slowdown in the market. With interest rates rising, days on market increasing, inventory shortages, and hesitancy about the future, there are several factors that contribute to the cooling down of the Phoenix housing market.
Interest rates are a critical factor in the housing market, as they can have a significant impact on the affordability of homes for potential buyers. In Phoenix, rising interest rates have contributed to a decrease in buyer demand, as higher interest rates mean higher monthly mortgage payments. According to data from Freddie Mac, the average rate on a 30-year fixed mortgage rose from 3.22% in March 2022 to 6.89% in March 2023. While this increase may seem small, it can make a big difference in monthly payments, making homes less affordable for some buyers.
Days on Market
Another trend contributing to the cooling down of the Phoenix housing market is the increase in days on market. According to data from the Phoenix Realtors Report Report, the average days on market for homes in the Phoenix area increased from 34 days in March 2022 to 81 days in March 2023. This increase can be attributed to a decrease in buyer demand, as fewer buyers are actively searching for homes in the current market.
Lack of Inventory
The lack of inventory is a nationwide trend that is also affecting the Phoenix housing market. According to data from the Arizona Regional Multiple Listing Service, the number of active listings in the Phoenix area decreased by 22.4% between February 2022 and February 2023. This lack of inventory can lead to bidding wars and higher home prices, which can turn away potential buyers.
The Uncertainty Factor
Finally, hesitancy with the near future of the housing market is another trend that is contributing to the slowdown in the Phoenix housing market. Potential buyers may be hesitant to make a large investment in a home during uncertain times. Similarly, potential sellers may be hesitant to list their home if they are unsure of what the future holds for the housing market.
While navigating a challenging real estate market can be difficult, The Offer Company is here to help. As the most knowledgeable and experienced real estate agency in Phoenix when it comes to navigating challenging market conditions, we can provide you with the expertise and guidance you need to make informed decisions about your real estate investments. Whether you’re a buyer or seller, we understand the complexities of the current market and can help you achieve success. Don’t hesitate to contact us at 602-448-7377 to learn more about how we can help you navigate the current market and achieve your real estate goals.