PHOENIX — In February of 2022, the average Phoenix area home sat on the market for less than a week, according to The Cromford Report. Now, the average house sits on the market for more than two months.
Real estate agents and experts are blaming interest rates for the slower-paced market.
"Two years ago, we were fighting high home prices; now we are fighting high-interest rates," said real estate agent Jeremy Fierstein.
In April of 2021, interest rates were around 3%. This month, rates have stayed at more than 6%.
"I think people are weary of getting a 30-year mortgage rate that they consider unaffordable," Fierstein said. "My opinion is that interest rates are almost more of a factor than the purchase price."
Joseph Harte's family knows first hand. They were looking for a home last January. Facing an extremely competitive housing market, his family decided to go for new construction. While the new house was being built, interest rates soared.
“Initially, when we signed on, the payment was around $3,200, and then when we were getting close to closing, the estimated payment, it was $4,200,” Harte said.
The family worked with their builder to reduce their interest rate and pay something acceptable to the family.
Fierstein says potential buyers should pursue similar options, as a mortgage rate buydown could save homebuyers more in the long run than a reduction in home price.
"A change or fluctuation in interest rate is potentially going to save a homeowner a lot more money on a monthly mortgage payment than a $20,000 reduction in the purchase price."
The Cromford Report monitors the Valley housing market. They said current conditions slightly favor the seller. However, both supply and demand are lower than normal.
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