New data from The Cromford Report shows sellers are dumping listings into the Metro Phoenix housing market at a rate 34% higher than average.
In its most recent four-week review, Cromford found 1,845 listings had been added to the Arizona Regional Multiple Listing.
The report said the Greater Phoenix housing market is shifting faster than it had seen at any point in the past 22 years, that supply is increasing at the worst possible time and that, “We are seeing the fastest cooling trend that the Greater Phoenix housing market has ever experienced.”
The increase in supply comes as demand is falling rapidly due to the Federal Reserve’s aggressive increases in interest rates as it tries to slow and reduce inflation across the overall economy.
Both Cromford and Freddie Mac expect higher mortgage rates will increase a sense of balance in the housing market, cooling what has been a blistering rate of increase in demand since the pandemic started to recede.
Still, buyers should not expect any significant degree of price reduction for the immediately foreseeable future. Supply in the “mid-range” of homes – $400K-to-$1M – remains low and is still experiencing the highest degree of demand. More than 8% of homes – roughly 6,000,000 houses – currently on the market are valued at more than $1M, according to data from Redfin, double the number from just two years ago.
Metro Phoenix has experienced price increases significantly higher than the national average in the last year. The May median home price in Phoenix was $490K. The national median is $428K for Q1.
The 30-year fixed mortgage rate has leapt from 2.75% last autumn to more than 5.25%.
Officials with Bankrate estimate prices may level out and not decrease for the next two-to-four years.
Freddie Mac economists have said the national housing market is in the initial stages of the most significant contraction since 2006.
Mortgage applications are expected to decline sharply over the summer and have already decreased by more than 40% since their 2021 high.
Realtor.com data shows applications for purchases and refinancing are at their lowest levels in 22 years.
In Maricopa County, sales that closed in May were down 11%. May is traditionally one of the busiest months for closings around the country. (Source)