Mortgage rates took an unexpected turn over the past month and popped up from the mid-6% to over 7% once again. As of this writing, they have only slightly dropped to 6.9%. Since rates became excessively volatile in 2022, the housing market has proven time and time again that when they stagnate in the high-6% range or more, it strangles demand. This has pushed Greater Phoenix out of a balanced market and into a buyer’s market over the past 2 weeks. To make things worse, it happened during the 4th quarter, which is typically the lowest time for sellers seasonally.
How long this buyer’s market lasts depends mostly on how long mortgage rates remain elevated. Sellers with less urgency may want to consider listing in the 1st quarter of 2025 as buyer activity picks up from January through May. In the meantime, if they must compete in this marketplace, property condition and competitive pricing at the onset is highly important to ensure a contract. Budget to pick up the buyer’s closing costs, rate buy down, and repairs. Then hunker down for the next 30-60 days as longer marketing times are expected over the holidays.