Mortgage forecasters believe rates will range between 3.27% and 3.88% this year, up from a record low of 2.65% in 2021.
The Phoenix housing market is a hot commodity with home prices up 32% last year according to Craig J. Lazzara, managing director of S&P CoreLogic Case-Shiller.
More people are moving to the country’s fifth largest city.
“We have seen this totally crazy market,” he said. Rich La Rue, a broker dedicated to HomeSmart professionals.
La Rue has more than three decades in real estate in California and Arizona.
La Rue said: “This is not 2008, we are not in the same conditions. What we expect to happen in 2022 may calm the madness but it will still be mad.”
Currently, the median home price in Phoenix is $429,600 according to the National Realtors Association. La Rue says stock is down in the greater Phoenix area, citing Arizona’s multi-regional listing service.
“Usually in January we would have between 16,000 and 21,000 active listings. Right now, we have 5,200,” La Rue said.
What do high mortgage rates mean for Arizona?
Mortgage forecasters expect average fixed mortgage rates to fall between 3.27% for 15 years and 3.88% for 30 years.
Last year, the 30-year flat rate was a record low of 2.65% according to Freddie Mac.
“What we expect is a slight rise in interest rates,” La Rue said. “This may slow the market a bit, but higher interest rates will definitely attract the attention of buyers sitting on the fence, and it’s time to jump in the market.”
Will prices fall or rise?
“What we expect is probably a 1.1% to 1.3% increase per month which is a 12% to 15% increase in 2022 which is still a strong market.”
What advice does La Rue have for first-time home buyers?
“I would advise them to buy as soon as it becomes possible for them,” La Rue said. “Even if prices stabilize, over the next five years, they will build stocks.”
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