PHOENIX — Now that the July doldrums of the Arizona housing market have passed, real estate experts are looking forward to stronger sales in the coming weeks. Their cautious optimism is boosted in part by a drop in mortgage rates, which hit a 14-month low last week.
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“Between the interest rates coming down a little bit, and kids coming back to school, we are starting to see things pick up for August,” said Amy Swaney, a loan officer of 30 years.
Average 30-year mortgage now below 6.5%
The standard 30-year fixed rate mortgage is now below 6.5%, after a high of 7.2% in May. The drop has been prompted by the Federal Reserve hinting it will cut interest rates in September.
“That may change if some large event occurs. But right now the market is responding to that possibility,” Swaney said.
Realtor Kelly Schmidt with the Jason Mitchell Group tells 12News things overall are still “stagnant” and he’s waiting for signs of a new trend.
“For example, I’ve got a single-family listing at 29th Ave. and Bell priced at $395,000,” Schmidt said. “A couple months back it would have flown off the shelf. Recently I’ve had only two showings and no activity.”
“Buyers have more leverage”
The real estate industry remains antsy, and Arizona continues to face a severe shortage of affordable housing. The most recent data shows there are about 19,000 total units on the market, including townhouses. The average price for a single-family home has dropped slightly, but experts who spoke with 12News say it is still not a buyer’s market.
“I’m hoping as rates go down, more people will list their home because there is definitely a lot of demand in Phoenix for buying and for renting,” said real estate developer Jamison Manwaring of Venture Neighborhoods. “In the rental market, which is about 40% of housing, we’ve started to see higher occupancy.”
“While it is certainly not a buyer’s market, it has been a long time since buyers have had this much leverage in the market,” said Lisa Sturtevant, chief economist at Bright MLS last week, as reported by CNN.
New home purchasing rules kick-in on Saturday
New rules involving the home purchasing process kick-in on Saturday, August 17.
“Changes going into place will put more on the buyer being able to negotiate,” said Schmidt. “What I’m telling buyers is, now is a good time because the longer a home sits, the greater the opportunity to propose a better offer.”
In May, the national lender United Wholesale Mortgage announced a zero-down mortgage program for first-time home buyers in an effort to spur sales.