Phoenix ranks among 15 hottest real estate markets of 2021
By: AZ Big Media
After nearly two years of unprecedented competition, the residential real estate market is finally showing signs of cooling off. While inventory remains at low levels and demand is still high, home sales and home price growth have begun to slow this summer, according to a report on the hottest real estate markets from Construction Coverage.
Taking into consideration the one-year change in median sale price, median number of days on the market, percentage of homes sold above asking, and average sale-to-list percentage, the analysis found that Phoenix had the 15th hottest real estate market among all large U.S. cities in 2021.
One of the primary reasons for the decline in demand is the increase in interest rates for mortgage loans. At the beginning of the COVID-19 pandemic, the U.S. Federal Reserve launched aggressive stimulus measures to stave off an economic downturn, which pushed interest rates to historic lows and made buying homes more affordable. But amid concerns about high inflation, the Fed has recently reversed course and begun to raise rates. The average 30-year fixed mortgage interest rate increased from a low of 2.65% in January of 2021 to over 5% now—and could potentially continue to increase over the rest of 2022.