The Greater Phoenix residential market received a nice bump with the decrease in interest rates a few weeks ago, but that has since petered out. This week, consumer confidence notched its strongest monthly gain since March 2021, but stayed in the narrow range of the past two years. There is still concern in the marketplace, interest rates are impacting pricing dramatically, and many people returned to their holding pattern. Meanwhile, we remain in limbo—and all bets are off until the elections are over.
The bond market’s behavior ran counter to the Fed’s 50 basis point decrease. While people were pleasantly surprised by the rate cut, it has been digested at this point. Could we see another rate cut in November or December? Like the old stock market adage “don’t fight the Fed,” the current situation with mortgage rates can be boiled down to “don’t try to outguess the Fed.”
September to October 2024, the supply-demand index dropped from 96.0 to 92.0, with a larger increase in supply than demand. Greater Phoenix is gliding towards a buyer’s market once again as the overall index continues to drop. This is only the third time in a decade that we’ve drifted below 100; most recently was Q4 2022, and before that it was Q1 2014. Both times proved quite beneficial for buyers who took advantage. The median price measure in December 2022 was $415K, 14% lower than the peak of $480K in May 2022 and 7% lower than June 2023 after the market shifted back towards a seller’s market. In both 2014 and 2022, the buyer’s advantage was short lived, lasting about 4-5 months in 2014 and only 2-3 months in 2022. Demand has been on the rise over the past 4 weeks; however, rising supply has outpaced it, giving buyers a plethora of choices.
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