Phoenix remains in an inventory-driven market, staying mostly stable with pockets of increased new listings in some areas. In neighborhoods with low inventory and high demand, buyers remain willing to step up and make a deal happen. From a seasonal perspective, we are close enough to the start of the school year that families are getting settled in rather than thinking about making a move; meanwhile, the luxury buyer base will not become active again till October rolls around. Once interest rates decrease sufficiently—and they will at some point—we can expect more inventory to hit the market, particularly from homeowners who have been locked in, unable to make a move up or laterally.
The July CPI inflation report came in lower than expected at 3.0%, causing mortgage rates to drop to 6.81%. Optimism for further decreases is being fueled by pessimism in the job market. As Wall Street gets nervous about unemployment numbers creeping up, possibly triggering a recession and a decline in the stock market, some investors will opt for the safety of bonds. If that trend manifests, bond rates could decline along with mortgage rates. What the Federal Reserve says at their meeting on July 31 may have more effect on rates than what they do. After this, the next meeting is September 17-18.
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