By Mark Finchem, Long Realty Associate Broker
Locally: The big story in the Tucson housing market is affordability. Home mortgage interest rates have show a degree of stability, ranging from about 3.5% to 4.0%, and in some daily cases even lower, for many months. As the record below shows, buying power for home buyers has improved significantly since before the boom-and bust cycle because of low interest rates. Many in the lending industry though say that the artificially low interest rates cannot stay this low forever.
In the metro-Tucson Market area, September 2015 active inventory was 4,944, a 10% decrease from September 2014. There were 1,200 closings in September 2015, a 17% increase from September 2014. Year-to-date 2015 there were 11,619 closings, a 9% increase from year-to-date 2014. Months of Inventory was 4.1, down from 5.3 in September 2014. Median price of sold homes was $172,000 for the month of September 2015, up 4% from September 2014. The Tucson Main Market area had 1,369 new properties under contract in September 2015, up 8% from September 2014.
Median Sale Price and Median Listing Price continue tracking even closer than they have for the same period, 2 years running. Home sale purchase contracts are even closer to the home sale list prices than they were 5 months ago. The “Days On Market”, aka DOM is also down in many price bands. Sellers can feel comfortable with holding firm if their home is priced right, others might view this as homes priced fairly.
Nationally: Despite a growing economy, a new survey has found that the financial pressures of student debt, persistent confusion about the mortgage process and a continuing nationwide marriage rate decline are important factors combining to slow the housing market.
The third annual America at Home survey from NeighborWorks America, found that student loan debt continues to grow as an obstacle in a consumers’ ability to buy a home, as 57 percent of 2015 respondents who acknowledge having student loans says this debt was either “very much” or “somewhat” of an obstacle, compared to 49 percent of 2014 respondents.
Additionally, although mortgage rates remain historically low, a generally steady rise in home prices is outpacing income growth, leading homebuyers – especially first-time buyers – to search for ways to build up a down payment. However, nearly 40 percent of respondents have received “nothing at all” in terms of information about down payment assistance programs for middle-income homebuyers, programs that could provide thousands of dollars to help bridge a savings gap.
Finally, the housing market is being pressured by changing demographics. Of the respondents surveyed, 43 percent planned to purchase a home when they “got married or moved in with a life partner.” This is important for the housing market’s rebound, because the median age at first marriage has increased to 29.3 for men and 27.0 for women, according to the Census Bureau, up from 26.8 and 25.1 years, respectively in 2000.