Rising interest rates cool down hot Tucson housing market

Rising interest rates cool down hot Tucson housing market

Roger Pettingell Sarasota Real Estate

TUCSON (KVOA) – A couple months ago, the U.S. housing market was red hot. But the Federal Reserve increased interest rates, and that has pumped the brakes on the runaway housing market.

“As soon as the interest rates climbed then the market, it did not stall, it just slowed down,” said Jodi Koch, President of the Tucson Association of REALTORS.

In June, U.S. home sales slowed, for the fifth consecutive month.

Sales are also down. In Tucson around 5%, as potential home buyers face increasing interest rates.

Koch has worked in the real estate industry for 23 years. She said the housing market slow down isn’t necessarily a bad thing.

“The buyers have more choices,” Koch said. “The buyers can take a little bit of time to think about a purchase.”

Properties under contract in Tucson are down 6% this year. The median home price in Tucson is up 16%, according to a Long Realty 2022 Mid-year Market Report.

Koch says the slow down could open up the competitive housing market to more buyers, who had been shut out of the market.

“Now, there’s opportunity to purchase once again, yet the interest rates are higher, yes they can’t buy as much house but they can definitely put their foot in the game,” Koch said. 

While the slowdown may be good for buyers, increasing mortgage rates and home prices have builders concerned. A recent survey shows builder confidence has plunged to its lowest level since 2020. The NAHB/Wells Fargo U.S. Housing Market Index (HMI) was down by two points to 67, the National Association of Homebuilders (NAHB) said on Wednesday. It was 81 a year ago.

Koch says the changes will return the housing market to a more “normal” state.

“It’s going to be a more stable market, a more comfortable market for both buyers and sellers.”

Koch expects home prices in Pima County to come down.

   


Leave a Reply

Your email address will not be published.