Every Monday afternoon Amber Kovarik and I talk about what happened this week in our local real estate market.
According to NAR before the pandemic, our housing supply was short by 5-6 million units. Housing starts are still down by 20% year over year.
Phoenix is still in the ideal affordable range. We are at 63 and the ideal range is 60-75. The higher the number, the more affordable. For a long time, we hung out at 68 and then recently dropped to 63. 59 is considered unaffordable. What that means is based on annual household median income, in Phoenix, it is $72,500; which means that the average AZ family could afford 63% of homes that sold since the beginning of the year.
Pre-pandemic our inventory was running about 55% below normal. Today we are 52% below normal and it is dropping daily. Pre-pandemic our demand was about 8% above normal. Today we are 4% below normal and only a month ago demand was 20% below normal. As you can see demand is significantly outpacing supply.
According to Redfin for the week ending on June 14 new listing median asking price is nearly 12% higher than at this time last year and 2% higher than only last week.
According to a recent Harvard study, wealthier households are spending 17% less than they were in January, while lower-income households are spending only 4% less than they were in January. The study further suggests that the wealthiest 25% of Americans are responsible for 66% of the decline in spending since the beginning of the year.
Mortgage purchase applications increased for a 9th straight week, leading to a 75% increase since mid-April, a 20% increase year over year, and putting us at an 11 year high.
Most loan programs are back. 600 credit scores for FHA and VA
Down payment assistance programs. These are way better than asking for seller concessions in today’s market.
Rates are super low. Right now about $5,000 in a sales price is equivalent to about $25 a month in payment.
Sarah Perkins is an award winning account executive and has been in title sales since 2004. As the Director of Industry Research & Senior Account Executive, Sarah’s role is to bring real estate transactions to Navi Title. Sarah supports her clients by helping them navigate the ever-changing real estate space through thorough research and understanding of current trends impacting today’s home buyers and sellers.