As we approach the end of 2024, the Phoenix housing market may start to feel some downward pricing pressure. The latest Cromford Report has highlighted trends reminiscent of late 2005, suggesting a potential market shift that doesn’t inspire much confidence. In this update, we’ll delve into these trends and how they may affect both buyers and sellers. Notably, homebuyers have recently lost approximately $33,000 in purchasing power, which we’ll also explore in depth.
Election Week Volatility and Mortgage Rates
With election week underway, we’re seeing notable volatility in mortgage rates. Post-election, there’s hope for stabilization, but current uncertainty is impacting rates and buyer sentiment. The Cromford Report’s recent findings shed light on these dynamics, so let’s examine the latest data.
Key Housing Market Data from the Cromford Report
- Inventory Growth: Active listings have risen by 37% since the beginning of the year, providing more options for buyers. However, this increase introduces greater competition for sellers, which has contributed to the recent build-up in unsold inventory.
- Active Listings and Demand: Homes under contract have decreased from a contract ratio of 47.7 in February to 32.4 now, signaling a market shift. This ratio, which reflects market temperature, shows we’re moving closer to a buyer’s market but not entirely cold yet.
- Historical Context: The last time we saw a similar contract ratio decline was during the peak inventory periods of November 2020. This period’s high mortgage rates impacted both demand and inventory, similar to current conditions.
- Seasonal Inventory Trends: Typically, the market sees a seasonal slowdown in new listings after mid-November. However, conversations with local sellers suggest that some are waiting until post-election to list, which could lead to a temporary inventory increase.