Despite the predictions of many who said a sudden spike in mortgage interest rates would dramatically decrease the demand for housing, home sales in the Phoenix area are not only still strong, they were actually higher during May and June of 2013 than they were during May and June of 2012!
See for yourself below!
In an article posted earlier this month on AZCentral titled, “Metro Phoenix home prices continue climb,” Mike Orr, director of the Center for Real Estate Theory and Practice at ASU, said this about the effect mortgage rates are currently having on the Phoenix housing market.
“The sudden and recent increase in rates has certainly reduced the motivation to refinance existing home loans. However, it is almost certainly increasing buyers’ determination to purchase homes now, rather than later, when rates may go even higher.”
The reason Orr probably called the latest increases sudden is because, in just the last seven months, the average 30-year fixed rate for a Conventional loan has already increased by over one percent from 3.34% to 4.37%. This is according to Freddie Mac’s Primary Mortgage Market Survey®. And, the increases aren’t expected to stop there, either. Many economists have said they expect this rate to hit 5% by 2014.
Average Home Sale Prices
As a result of this new-found concern for rising mortgage rates, home buyers are showing they’re motivated as ever to purchase homes at the Phoenix area’s ever-increasing prices. How motivated?? Over the last three months, the average home sale price here has increased by almost 7%; over the last year, it has increased by approximately 22%; and most impressively, over the last two years, our average home sale price has increased by over 55%! In some cities, the prices have increased by even more…
Looking back at the chart above, it is clear that homes sales in the Phoenix Metro Area have remained strong in 2013, and are even starting to outpace 2012’s sales. But, how will buyers and sellers use this trend to their advantage? Sellers who have been underwater for the last five years may realize they’re finally able to sell their home for a modest profit and move on with their lives, while buyers who don’t want to miss out on these historically low interest rates may jump into the market before rates have a chance to creep up to 5%.
Either way, if you would like to speak with one of The Hill Group’s experienced agents about your options, please post a comment below, send us a message on our Contact Us page, or give us a call anytime. We love to hear from our readers!
Source: The Cromford Report