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New data sheds light on housing market in Arizona

Data shows housing affordability in Tucson on decline but better than nation
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Posted at 4:41 PM, May 12, 2022

TUCSON, Ariz. (KGUN) — The dream to buy a home in this economy has started to become harder and harder as prices and interest rates continue to rise.

"We bid on a handful of other houses that our offer wasn't even considered," Gil Wondrak said. "And they were all over asking price too."

With the housing market continuing to rise, many home buyers are having to put in an offer quick and go above asking price.

"Both of the houses that where our offer was accepted, it was I think $15,000 to $25,000 over the asking price," Wondrak said.

On Thursday, data on housing affordability from the National Association of Home Builders and Wells Fargo was released. The data shows Tucson fairing better than Phoenix when it came to housing affordability.

"In Tucson, in particular, in the first quarter 66% of the homes sold were affordable to a family making the median family income," UA Economist George Hammond said. "And so that was a bit better than the national average, which was right around 57%."

Along with more options for affordable housing, he says Southern Arizona also did well when it came to new house builds.

"So you know, Tucson just like Phoenix is seeing housing permits run at a really rapid rate, basically the fastest pace we've seen since 2005 2006," Hammond said.

Even with more inventory, many home buyers say they are feeling the rush when putting in an offer.

"In the market that we're currently in, it was basically like if you see a house you have a couple of hours to decide whether or not you want to put an offer on it," Wondrak said.

New datashows the average family is now spending more on housing. The average family is spending 28 percent of their gross income on housing. However according to the Census Bureau, the median household income is substantially higher than the median income. In March of 2022, median house prices were up over 18 percent in Tucson, while housing permits in Tucson rose over 26 percent, compared to Phoenix which rose nearly 5 percent.

Hammond who analyzes data also provided a break down of the latest numbers for the housing market.

"According to the revised data, Arizona total permits hit 65,334 in 2021, up 8.3% from 2020. Single-family permits rose 10.1% and multi-family permits rose 3.9%. Housing permits in the Phoenix MSA rose by 4.9%, to 50,581, with single-family permits rising 8.5% and multi-family permits down 2.0%. Housing permits in the Tucson MSA surged last year, rising 26.7% to 6,284. Single-family permits were up 20.6% and multi-family permits increased 63.1%.

At the same time, house prices continued to rise at a rapid pace. In March 2022, median house prices were up 26.6% over the year in Phoenix and 18.6% in Tucson. The Case-Shiller house price index, which measures repeat sales, was up 32.9% over the year in Phoenix in February, well above the national average increase of 19.8%.

Skyrocketing house prices in Arizona have had a large negative impact on housing affordability. According to data from NAHB/Well Fargo, housing affordability in the Phoenix metro area fell below the national average in the first quarter of 2021. By the first quarter of 2022, 43.9% of the homes sold in Phoenix were affordable to a family making the median income, compared to 56.9% nationally. Affordability has declined in Tucson as well but, at 66.0%, remained above the national average. Overall, from the fourth quarter of 2019 to the first quarter of 2022, affordability plunged 21.0 percentage points in Phoenix and 5.2 percentage points in Tucson. The national decline was 6.3 percentage points."

Denelle Veselik is an anchor and investigative reporter for KGUN 9. It's been her dream to tell your stories for the past decade. She is extremely curious and wants to continue to use her storytelling for the greater good. Share your story ideas and important issues with Denelle by emailing or by connecting on Facebook, Instagram and X/Twitter.