Housing affordability rises across all Arizona metros

Sourced By: AZ Big Media 

Housing affordability increased nationally and in all Arizona metropolitan areas for the first quarter of 2023 based on the latest National Association of Home Builders/Wells Fargo Housing Opportunity Index (released June 8).

Rising incomes and lower home prices contributed to improved affordability. New and existing homes sold nationally between January and March were affordable to 45.6% of families earning the U.S. median income. This was a larger share than in the fourth quarter of 2022 when only 38.1% of homes sold were affordable, but still far below the rate of 56.9% in the first quarter of 2022. Arizona metropolitan areas followed suit, as the share of affordable homes increased across the board at the beginning of 2023 yet fell short of the rates from a year ago. Tucson once again moved above the U.S. in the first quarter of 2023, with 46.8% of homes sold affordable to a family earning the median income, after having a smaller share of affordable homes than the nation for the last three quarters: Tucson historically has better housing affordability than the nation. The most sizable jumps in affordability were in the two areas of the state that are typically the most affordable – Sierra Vista-Douglas and Yuma – with more than 20 percentage points increase each from the last quarter of 2022 to the first quarter of 2023. The shares of homes sold affordable to families earning median income in Arizona metropolitan areas for the first quarter of 2023 were 64.6% in Sierra Vista-Douglas, 63.6% in Yuma, 46.8% in Tucson, 41.9% in Lake Havasu City-Kingman, 34.3% in Phoenix, 29.2% in Flagstaff, and 23.9% in Prescott Valley-Prescott. The least affordable housing markets were all in California.

Arizona house prices barely increased between the first quarter of 2022 and the first quarter of 2023, moving up 0.7%, according to the Federal Housing Finance Agency (FHFA) House Price Index released May 30. Unlike Arizona, most western states had depreciation of house prices.  South Carolina followed by North Carolina lead year-over-year house price increases in the first quarter of 2023. The South Atlantic region had the largest one-year change in house prices at 7.2%, the Mountain (-0.1%) and Pacific (-2.4%) regions had negative house price changes. Nationally, house prices gained 4.3% during the same period, seasonally adjusted. Data for the nation and states are for the purchase-only index. The House Price Index has information for all metropolitan areas for an all-transactions index that includes both purchase and refinance mortgages. The one-year changes in house prices for the Arizona metropolitan areas in the first quarter of 2023 were 4.3% in Flagstaff, 4.7% in Lake Havasu City-Kingman, 3.4% in Phoenix, 7.8% in Prescott Valley-Prescott, 5.3% in Sierra Vista-Douglas, 9.9% in Tucson, and 4.0% in Yuma.  

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