No crash in cards for housing market
Phoenix area holds steady despite COVID-19 pandemic
The Phoenix area’s housing market is showing no signs of crashing despite job losses and other economic hits because of COVID-19.
The region’s home sales typically dip during the summer, as fewer buyers opt to brave triple-digit temperatures to check out and commit to houses. Now, with masks and other distancing and safety precautions, it would seem more buyers would stay home.
But contracts to buy Phoenix-area homes priced above $300,000 soared over the past week, according to the Cromford Report.
“National reports calling for Phoenix’s housing market to crash this year are wrong,” said Tina Tamboer, senior housing analyst with Cromford, at a recent HomeSmart Elite video meeting with hundreds of agents.
Record low-interest rates are helping boost sales, and it’s still a strong seller’s market, Tamboer said.
Low rates, rising sales, flat prices
Mortgage rates fell to the lowest levels in 50 years this week.
The average rate for a 30-year mortgage is now 2.98%, according to mortgage giant Freddie Mac’s annual survey.
Lower rates are driving a surge in home sales and refinancing.
The average monthly payment on a $300,000 mortgage with a 2.98% rate is $1,260. A year ago, the average interest rate was about 4%, making the payment $1,430.
As rates fell, contracts to buy metro Phoenix properties climbed.
Demand for houses priced between $300,000 and $400,000 surged 25% during the past week, Cromford reported. Contacts for buyers to pur
chase homes priced between $500,000 and $1 million shot up 71%.
Home prices are holding pretty steady during the pandemic.
In March, metro Phoenix’s median home price hit a record, but most of the sales that drove up the price to $302,500 were negotiated before COVID-19 hit.
Prices dipped from the record in April and May, with the median hovering around $295,000 since then.
Still a seller’s market
Early in the COVID-19 crisis, housing market watchers were concerned homeowners losing jobs would list homes for bargain prices to avoid foreclosure.
But many struggling homeowners have received government-backed forbearances from their lenders, and neither listings or foreclosures have jumped in metro Phoenix.
Listings are down from last year’s low, and sellers still have the upper hand as demand from buyers climbs with low rates.
“Why would you sell for a bargain in metro Phoenix when rent prices are still high and even homeowners who bought last year still have equity in their homes?” Tamboer said.
Reach the reporter at Catherine.Reagor@arizonarepublic.com or 602-444-8040. Follow her on Twitter @Catherinereagor.