Aspiring homeowners in Arizona are facing tough times as housing prices continue to soar, leaving many feeling hopeless. Reports suggest that the market has become increasingly “wild,” making it difficult for people to afford their dream homes.
“These prices are just wild,” Eren Mendoza, an Arizona resident, told The New York Times. “It’s pretty much all anybody talks about.”
Insane That Dual Income Can’t Support Us, Mendoza Says
Mendoza lives with her partner, Devon Lawrence. She said in the interview that even their combined is not enough to live comfortably in Arizona. “The fact that a dual income can’t support us is insanity,” she said.
It’s been five years since they began living together in the desert sprawl of greater Phoenix, the capital of the Southwestern U.S. state.
Having To Move From One Home To The Other
During that time, they did not have a stable. They’ve been moving from one itinerant home to another.
Living alongside a freeway off-ramp, using a gas station sink as their bath, and seeking refuge from the relentless sun under a plastic tarp, Ms. Mendoza and Mr. Lawrence, both 32 and employed, have faced big challenges thus far.
Mendoza’s Combined Efforts Not Enough To Secure Modest Home
Despite their jobs at a supermarket deli counter and a convenience store, earning a combined $3,500 per month, they’ve been unable to afford a home in a safe Phoenix neighborhood where rent has doubled over the last decade.
For two years, they’ve relied on staying with friends or in motels, paying up to $650 a week, but their dream of a modest home remains out of reach.
Housing Challenges Could Affect Presidential Election Results
According to The Times, many couples and hopeful homeowners, such as Mendoza and Lawrence, are encountering similar challenges in Arizona. This could affect the outcome of the 2024 presidential election.
Despite “$60 billion in investments in factories that make advanced computer chips,” as noted by the Biden administration, difficulties in securing affordable housing persist in the Phoenix area.
Survey Shows Voters’ Opinion On Economy
A survey by Fox News on March 27 showed that more than half of voters think things are not as good for them now as they were in 2020.
The poll also discovered that 73% of voters think the economy is not doing well, which is a bit better than in May 2023 when 83% thought so. The survey found that 38% think Biden is doing a good job handling the economy, while 61% think he isn’t.
Affordable Housing Dwindles In Greater Phoenix: A Significant Decline Since 2010
“Since 2010, the number of rental properties available for $1,000 or less in greater Phoenix has declined 86 percent, according to the Maricopa Association of Governments, a regional planning agency,” The Times reported.
“The number of homes selling for $300,000 or less dropped 73 percent.”
Housing Costs A Psychological Drain
For Arizonans earning around “$45,000 to $90,000 a year,” owning a house is almost a pipe dream, which “‘makes people feel like the economy is crummy,” Carin Nguyen Real Estate agent Nathan Claiborn said in an interview.
He added that the affordability of housing in the state is “a psychological drain” for its residents.
Rise In Population Causing Rise In Housing Demand
In the year 2020. Arizona ranked fourth in the states for net immigration. Overall, migration into the state has seen a 20% rise over the past decade.
As expected, this rise in overall population and the state’s popularity makes for a very competitive housing market. Higher demands result in higher costs and this holds true with housing in Arizona. While the state does have ample sunshine and low humidity, the forecasts may not be so certain when it comes to affordability.
How Much Does It Cost To Buy A House?
The Arizona Realtors’ December market report released in December last year revealed that the median sale price for a single-family home in the state was $352,536. That’s an 8.7 percent rise from last year’s median. However, there was a drop in the number of listings and sales: 12.5 percent and 10.7 percent respectively.
Arizona is quite a large state though, and housing costs are different in different locations. Median prices in small desert towns will of course be lower than in the bigger cities and Arizona’s most exotic locations.
Understanding Price Differences And Mortgage Payments
Take for example, the median price in Phoenix back in December was almost $100,000 higher than the statewide median which was $444,785, according to Redfin data. Flagstaff placed it even higher at $680,000.
It’s important to look beyond just the price differences across the state and consider how they affect your monthly mortgage payments. For example, using Bankrate’s mortgage calculator, a median-priced $352,536 home in Arizona, with a 30-year fixed-rate loan at 7 percent interest and 20 percent down payment, would have monthly payments of $1,876.
Understanding Closing Costs And Financial Preparedness
According to data from Core Logic’s ClosingCorp, Arizona’s closing costs typically amount to about 1.2 percent of a home’s sale price.
So, for a median-priced $352,536 home, this translates to around $4,230. It’s important to note that both buyers and sellers share these costs.
Typical Closing Costs For Buyers
For buyers, typical closing costs include loan-related fees, home appraisal, and inspection costs. It’s also crucial to have some extra cash saved for routine maintenance and emergencies.
Lenders want to ensure you have enough funds left after buying the home to handle unexpected expenses.
Considering Moving Expenses
When planning to move into your new home, it’s crucial to budget for moving expenses. If you’re already a local resident, the average cost of a local move is $1,698, according to HomeAdvisor.
However, if you’re relocating to Arizona from another state or even cross-country, be prepared to spend significantly more on moving expenses.
