Phoenix No. 2 in the U.S. for cutting prices on home listings
By: AZ Big Media
Home values slipped for the second consecutive month as mortgage costs continue to sideline buyers, according to Zillow’s latest market report. Affordability is driving market momentum: Low-cost markets remain competitive while prices drop the fastest in both the most expensive markets and those that witnessed the strongest appreciation during the pandemic. Data also shows that Phoenix is No. 2 in U.S. for cutting prices on home listings, with a staggering 43.1% of home listings in Metro Phoenix seeing a price cut.
In addition to affordability challenges, recent volatility in mortgage rates is making it difficult for many borrowers to qualify for a loan or even plan for their purchase.
“Substantial day-to-day and week-to-week rate movements mean that many potential buyers are able to qualify for a loan one week, but not the next, or vice versa,” said Skylar Olsen, chief economist at Zillow. “Even buyers able to afford a house at current rates could feel frozen, waiting for mortgage rates to fall dramatically again, like they did from the end of June to mid-July, when rates dropped 50 basis points in just two weeks.”
As the share of median household income needed to pay monthly mortgage costs now stands beyond the 30% level considered to be a financial burden, uncertainty itself could be holding up a large population of buyers who could otherwise still afford to move forward with a loan. It’s likely that this problem will continue until markets stabilize and return to some semblance of normalcy, Olsen said.
The U.S. typical home value fell 0.3% from July to August and now stands at $356,054, as measured by the raw Zillow Home Value Index. That’s the largest monthly decline since 2011 and follows a 0.1% decrease in July. Appreciation has receded since peaking in April, but typical home values are still up 14.1% from a year ago and 43.8% since August 2019, before the pandemic.