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Escalating Valley home prices haven't stopped fledgling buyers.
Armed with the lowest interest rates in four decades, recent buyers are
making about the same payment for a median-price home as those who bought in
2000, even though the median price for a home has climbed nearly $20,000
between those years.
"Interest rates have made the difference for many buyers, who without them
would still be renters," said Jay Butler, director of Arizona's Real Estate
Center.
Maria Huerta was able to afford her first home last year because of low
interest rates.
The full-time Food City employee had watched mortgage rates fall, and home
prices rise in desirable neighborhoods.
"I knew I had to buy before rates went back up, or I might not be able to
for a few more years," said Huerta, a mother of four.
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With some counseling help from Neighborhood
Housing Services of Phoenix, she was able to buy a three-bedroom house in
West Phoenix when rates were hovering around 6 percent.
The West Valley has some of the most affordable homes in the Greater Phoenix
area.
Median prices in some neighborhoods in Maryvale and west of Interstate 17
are below $100,000, according to The Arizona Republic's annual
housing market survey.
The Valley does have a housing crunch for the working poor, who are those
making below median household income of $48,000 a year, according to the
Arizona Housing Commission. But families making the median household income
for the area should have little to no trouble affording a median price home,
according to the Real Estate Center.
Low interest rates kept the used home affordability index at 126 last year.
That means buyers making the Valley's median income of $48,000 had 126
percent of the income needed to afford a $145,000 home.
Anytime the index is above 100, the housing affordability of a market is
considered strong.
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Michelle Rigi and her husband bought their
first home in northwest Phoenix because they could get more for their money.
The couple was about to have their second child and needed four
bedrooms, more room than their home in north central Phoenix offered.
"Our home was $30,000 less than others we looked at, so we jumped at it
while interest rates were low," said Rigi, whose new house, built by KB
Home, is near I-17 and Dynamite Road.
New homes are pricier, with a median cost closer to $160,000, but the
index for that segment of the market was still 115 last year.
"Interest rates are key for buyers on the affordable end of the market, but
prices help, too," said Bob McCord, chief executive of Coldwell Banker
Success Realty. "People move to Phoenix for its affordable homes."
Nationally, the median price of a used home hit $160,000 last year, $15,000
more than a similar home in the Valley.
The Arizona Republic
Mar. 2, 2003