Are buyers maxed out? | Phoenix Real Estate Market Update

Home buyers are maxed out and homes are not selling. According to a few articles we're gonna look at today, the real estate market is experiencing this kind of standoff. We also are gonna talk about migration trends because a lot of people always say no one's moving to Phoenix anymore, everyone's actually leaving. But I do have some migration data that will give us an actual look at what's going on. So let's jump into it. This is never the type of news that you want to hear as it relates to the health of the housing market. They're saying that the number of mortgages over 90 days past due has reached the highest level since 2022. This is according to Yahoo Finance. This article came out last week. 878,000 home loans were more than 90 days past due or in foreclosure according to ICE Mortgage Technology, a figure that's risen 25% in the last four months. And they say many of those are FHA loans. They do say that this uptick doesn't necessarily mean that more homeowners are defaulting, but rather homeowners in arrears are staying there by failing to cure their delinquencies through steps such as catching up on payments or modifying their loans or reaching a forbearance agreement. So basically they've defaulted and they're not able to catch up or take advantage of these other ways to get back into good standing. Maybe they don't know that it's an option. Maybe they're not able to. But they do say these dynamics bear watching in the coming months. However, when we look at previous statistics, they're saying delinquencies rates jumped across all stages in February compared to a year ago, led by an 18% rise in the rate of seriously delinquent borrowers to 0.2%. When we look in the past, so the 2008 financial crisis, at its peak saw over 8% of borrowers land in seriously delinquent status. So a very big difference from where we were at then, although this is something to keep an eye on. They do go on to talk about how mortgage delinquency rates are lower than past due rates on other types of debt. So auto loans, credit cards, things like that. However, those things are potentially something that is the leading factor when we start to see more people become delinquent on their mortgages. So something to watch. We're not in any dire situation at this moment, but something to keep an eye on that trend. We talk a lot about affordability on this channel. I get tons and tons of comments from you guys about how wages have outpaced home prices and things are no longer affordable. And I wanted to share this article from Adam Data. They're looking at a number of markets, but they do call out Phoenix in this. So homes still remain unaffordable in first quarter. Homes in 97% of analyzed counties were less affordable than historic averages. Wage growth outpaced home prices in a majority of counties analyzed. So they're saying that home affordability shows that homes were less affordable than historical averages in 97% of counties with sufficient data to analyze for the first quarter of 2026. At the beginning of the year, major monthly expenses for median price single family homes and condos exceeded historic norms in 560 out of the 580 counties included in their analysis. So they do talk about Maricopa County in this analysis. And specifically they say the most populous counties where monthly home expenses surpassed that 28% of income threshold were Los Angeles, Maricopa County, 36.6% of wages in Maricopa County. So that is where monthly home expenses surpassed that 28% threshold that we're trying to meet. And here in Maricopa County, it was 36.6%. So it's interesting to see that we're in the mix with a bunch of California counties as well. So San Diego County, Orange County, and then Miami and Florida. They do have some counties that home ownership would be considered affordable. So if you're thinking about relocating and you want somewhere affordable, these places could be an option for you. Cook County, Illinois, Harris County, Texas, Dallas County, Texas, Bexar County, Texas, Philadelphia County, Pennsylvania. So those are some areas where you may be able to see a bit more affordability when it comes to the comparison between wages and home ownership costs. Now, not only is home ownership a challenge in some areas, but we also have to factor in all of the things that are going on with mortgage rates. According to Redfin, market jitters drive mortgage rates up sending some would-be home buyers to the sidelines. So if you are someone who's had your home on the market and you're like, where are all the showings? Why did it become crickets? I won't say it's directly impacted by those mortgage rate changes, but that could have an effect because in the last few weeks rates have gone up and it has, according to Redfin, put some would-be home buyers on the sidelines. The weekly average mortgage rate has hit a three-month high of 6.22%. We're gonna talk about that in a minute. And markets are bouncing around this week as investors try to keep up with conflicting messages about the conflict in the Middle East. Rising mortgage rates, along with a 1.8% year-over-year increase in U.S. home sales prices have driven the median housing payment to 2,695, the highest level since June. The median payment is down 1.5% compared to a year ago, which is the smallest decline in five months. So all of the higher housing costs, economic uncertainty, pushing some house hunters onto the sidelines. They're saying pending home sales fell 1% year-over-year. On the selling side, new listings inched up 0.3% year-over-year. And we're gonna look at what's going on in Phoenix because I wanna look at the inventory. I also wanna look at the number of homes going under contract on a weekly basis so we can see what the pace looks like here locally. But I will say when we do see mortgage rates increase, we often see buyers take a step back and think, maybe I should wait a little bit longer or maybe it just becomes unaffordable for them when the rates change significantly, right? So although we've been seeing a lot of changes with mortgage rates lately, I would say for the last month and a half, mortgage rates have been a little bit more volatile than they were at the beginning of this year. We are still seeing housing demand hold up. So Logan Motoshami is always looking at the purchase applications for mortgages and also looking at pending home sales. And so he's saying, even though housing demand is positive year-over-year, it has slowed down. But despite all of these changes with rates, we are still seeing this positive. Housing demand remained positive year-over-year, but momentum cooled as mortgage rates ended the year at 6.64% or ended the week, I'm sorry, at 6.64%. Purchase applications slowed to 5% year-over-year. But he's saying as shocking as it may seem with all the crazy things that have happened in 2026 with AI disruption, headlines, epic snowstorms, and the Iran conflict, housing demand, even last week, still showed a year-over-year growth with mortgage purchase applications data and our weekly pending home sales. However, that growth has slowed and we are at a key inflection point for mortgage rates. So it is going to be really important for us to continue to watch what happens with mortgage rates because it could change the pace that we've been on this year. It hasn't completely disrupted this growth, annual growth, which can be hard to understand because I'm just sitting here talking about how homes are out of reach for a lot of people, unaffordable, wages have not kept up with home prices, rates are increasing. There's a lot of uncertainty. These are all very concerning negative things. And yet we continue to see minimal home price growth, but it is growth as well as demand and continued pending home sales. So things are still chugging along. That's kind of the point of what I'm saying here. Although there is all this distraction, all these other things going on, the market is still chugging along. And as I always say, it's different in different areas of the country, different areas of the city. Everything is hyper-local, but we are overall seeing some movement. And we are gonna take a look at what's going on in Phoenix with our inventory and our listings under contract as well. According to Redfin, over half of home listings have been lingering on the market for more than two months. Another article of just like great news for you guys. If you're a seller, you don't love to hear this, but here's the thing. Two months, I wouldn't call that stale per se. It takes time to sell a house, okay? We're not selling popcorn here. People have to make a very large investment to buy a home. And there's very few homes that are selling in three days, right? So two months on the market, depending on your area, might be completely normal. So I kind of have an issue with the title of this article because it sounds a lot worse than it really is. They say there's 347 billion worth of stale listings in the US, more than ever before for this time of year. That's because there's hundreds of thousands more home sellers than buyers, leading to homes sitting on the market. If you watched my video last week, I talked about the gap between buyers and sellers and Redfin reported on that. And when we look nationally, there is a very big gap between buyers and sellers and it was the most on record since 2013, I think is what they were saying. So it doesn't shock me that now we're talking about longer days on market because when there are more sellers than buyers, of course, we're gonna see homes sitting on the market a little bit longer. Stale inventory is most common in Florida and least common in the Bay Area. So again, I'm not gonna consider that stale. I would maybe consider that stale in a hotter seller's market, yeah. But in a balanced market, two months on the market is not stale in my opinion. More than half of February's home listings were on the market for at least 60 days without going under contract nationwide, up from 50% a year earlier and the highest share since 2019. So that's why they're reporting this information because it's increased from past years and it's the highest since 2019. But again, like I always say, 2020 until today, things have been a little wonky. We haven't really followed the normal trends and we went really high and then we got really low and then we've kind of balanced out a little bit. So comparing anything to pre-2020, even though 2019 was seven years ago now, is kind of like, yeah, of course, because that's when things were a bit more normal, right? So let's talk about what's going on with mortgage rates. Mortgage rates fall back below 6.5%. So that's exciting news because things, I feel like we've been on this wild roller coaster ride between six to 6.5% and just for a little bit of context if you weren't paying attention, we dipped below 6% for the first time in a very long time. And this was at the end of February, we hit 5.99. And then all of a sudden, things changed, didn't they? Things went up and up and up, a little bit of down and up. See, doesn't that look like a fun roller coaster ride all the way? And then we dropped to just below 6.5%. So that is the most recent information that I have as I'm reporting this today, which is Wednesday, but you guys will see this on a Thursday. Mortgage rates move lower for the second straight day as markets responded to potential de-escalation in the Iran war. Rates are based on bonds and bonds improved overnight as the president said the war could end even if the Strait of Hormuz was not yet reopened. So this is why we pay attention to everything going on in the economy and current events because it all ends up affecting mortgage rates, just the way things change and affect obviously the bond market, the 10-year treasury yield, all of those things is what ends up affecting the mortgage rates way more than a federal funds rate cut or hike. So this is where we're at today, this could change, but maybe we will begin to see some progress below 6.5%, who knows? Now, I haven't talked about this in a while, but since we are pushing closer to 7%, let's talk about assumable mortgages because if you're someone who's like, I would love to buy a home, but I am not paying a mortgage when rates are at 6.5% or 7%, you may wanna consider the option to find a home with an assumable mortgage. Our team has a list of homes that could be assumable. If you're interested in looking at that, check the description below. The assumable process is totally doable, it just takes a little bit longer. If you guys want any more information about that and talk through the process, feel free to schedule a discovery call with our team, we'd love to chat with you more about what that looks like. So I said that we're looking at migration trends and I wanna share with you what these look like here. So jobs, warm weather, and retirement destinations contribute to domestic migration patterns. Does that not sound like Arizona, right? So I hear this all the time, people are like, no one's moving to Arizona, no one's moving to Phoenix anymore, everyone is actually leaving and that is why the housing market is going to crash. Not true, according to this. So net domestic migration, the dark green is obviously more and then white, purple, or I'm sorry, the purple colors are on the lower end, less than 30,000 or more. So you can see where we're at in Phoenix, this is pretty dark green all the way through 2025. So this is moving us through starting in 2011, which is pretty cool to see. And then it gets darker and darker as we start to see more green, dark green even as early as 2016. This whole section of Arizona has been green and darker green in some areas. And then as we get past 2020, of course we know there was a lot of migration here, so this is gonna continue. But where we're at in 2025, 2026 remains pretty dark. So that dark green is really showing that Arizona and Phoenix specifically is on the higher end of these net migration trends. So people are still coming here, which is why we still have demand for housing. Speaking of demand for housing, let's take a look at what's going on in Phoenix with the Cromford Market Index. 82.9 and demand 87.5. So according to the Cromford Market Index, 87.5 is about 13% below normal, 12.5%. And then supply has been increasing 105.5, so that's about 5% above normal. And technically we are still in a buyer's market. Now if we look at all the major cities, we've got still quite a few that are in a seller's market actually, everything from Avondale up to Chandler on this list. They say the number of cities moving in a direction favorable to buyers is six, four fewer than last week. We have 12 cities moving in favor of sellers. And they say that is surprising given the sharp increase in interest rates. However, of these, Goodyear, Tempe, and Maricopa have made the largest percentage moves. Cave Creek and Gilbert were the leading cities moving in favor of buyers. And the average CMI is up 1.7%, significantly better for sellers than the 0.2% movement that we saw last week. So overall the trend is moving in a direction favorable for sellers. This is likely due to some increased demand because I know supply is not going down. So our active listing counts sitting at 26,007, just a little bit higher than where we were at last year. And we've started this new uptick the last three weeks. Then we look at the listings under contract, and this is where I'm saying the demand is continuing because look at this line, this green line, which is so much higher than, I mean, I wouldn't say so much higher, but clearly on a different trend line than last year. We're seeing 9,073 listings under contract in week 13. And last year was the red line. We were at 8,515. So definitely more, and obviously this line has broken off the trends of the last two years. So that demand is there. So if you're a seller on the market and you're wondering why you're not selling your home, it could be price, it could be condition, and it could be location. But those buyers are definitely out there. We're seeing that. Then when we look at the sales per year, this is also interesting because I'll tell you what, like honestly, I feel like this year has been a bit of a drag. Like I'm not feeling that pop of the spring market personally. And our team has of course been busy, but sometimes the spring just gets like crazy busy and it just doesn't feel that way to me. So I was like, what are the sales per year looking like? And they look just like last year. We're right in line, so much so, you can't even see this year because last year and the year before are on top of it. But if I take out 2024 and we just compare the last two years, we're right on track with the number of sales year to date as we were last year and even 2024. So things are moving, things are definitely moving. So if it feels slow on your end, there may be some changes that you can make to your listing. Or if you're considering selling, just know there's demand out there for sure. It's just a matter of the strategy that you use to price your home and market your home. All of that really matters in this market. So again, if you are a buyer considering alternative options like an assumable mortgage, check the description below for more information on that. And for sellers, I'm also gonna offer you an instant home value that you can see what your home would be worth if you're considering selling. I will see you guys next week on my next market update.