Arizona Housing Market: Price | Trends Forecast for 2022, by Yvonne McFadden.

Arizona Housing Market:

Price, Trends Forecast for 2022

By Yvonne McFadden

Phoenix has been one of the most active housing markets in the United States. Phoenix had the highest year-over-year gain in the country in September, with a 33.1 percent increase. According to the latest S&P CoreLogic Case-Shiller Indices results, Tampa was right behind Phoenix with a 27.7 percent increase, followed by Miami with a 25.2 percent year-over-year gain. Home price growth in the United States was 19.5 percent in September, down from 19.8 percent the previous month.

With the new year still very, well new, what will the Arizona market be like:

PRICE APPRECIATION

According to a housing market forecast released by Realtor.com, Phoenix home prices are expected to rise 6.8 percent in 2022. The projected increase is based on the Valley’s recent median home price of $485,000. Towards the end of the year, Realtor.com released its Top Housing Markets of 2022 report, where Metro Phoenix ranked 19th among the cities that would lead the nation in listing price appreciation and home sales growth in 2022. “Prices will likely continue to go up, just given the fact that there’s such limited supply out there, but it can’t continue to appreciate at that same pace,” Erik Bildman, the vice president of real estate startup Sundae, said. “We’re predicting somewhere in the high single digits to low teens for next year.”

HOME SALES

We should anticipate strong home sales growth in Arizona as more sellers enter the market and fierce buyer competition. In 2022, Phoenix is expected to see a 14.3 percent increase in home sales, a 7.5 percent increase in home prices,

HOME AFFORDABILITY

Affordability will become increasingly difficult as interest rates and prices rise, but working remotely may broaden search areas and allow relatively young homebuyers to find their first homes quicker than they might otherwise. And, with more than 45 million millennials between the ages of 26 and 35 entering the market in 2022, we expect the need to stay competitive, according to Danielle Hale, Chief Economist Realtor.com.

MORTGAGE RATES

Interest rates on mortgages will rise in 2022. According to the National Bankers Association, the 30-year fixed-rate mortgage will reach 4%. Although that is historically a low rate, it comes as a surprise to folks used to 2.5 percent, 2.75

INVENTORY

In 2022, inventory will improve in Arizona, although this improvement will be slight. The housing market as a whole will remain competitive, forecasts Steve Hensley, the advisory manager for Zonda, a housing market research firm. The scarcity of available homes, combined with low mortgage rates, will continue to entice motivated homebuyers into the Arizona housing market.

Realtor.com predicts home sales will rise in most metro areas in 2022, following the national trend. While some real estate markets are expected to experience a drop in home sales, these drops are expected to be modest. In fact, in many areas where declines are expected, 2022 is expected to have the second-highest sales level in the last 15 years, being outdone only by 2021.