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Rising Tucson home prices due to affordability of market, report says

Posted at 6:51 AM, Dec 16, 2019
and last updated 2019-12-17 16:36:47-05

TUCSON, Ariz. — Tucson home prices are on the rise. A new report by the Federal Housing Finance Agency shows a big increase in Tucson home prices this year compared to last.

The FHFA reported that the U.S. saw a 4.9-percent increase in home prices this year; but Tucson saw more than double that, a 10.3 percent increase from 2018 to 2019.

The FHFA said affordability is a big reason why price tags in our market are going up. As it gets harder for people to afford homes in states like California and New York, people move to lower-cost regions where they can get more bang for their buck.

"That means the places like Arizona, Idaho, Utah tend to see more housing demand at this point in the cycle," said Lynn Fisher, FHFA's senior advisor for economics.

Even with Arizona showing one of the biggest increases in housing prices, Fisher said our actual home prices, still sit lower than the national average.

"It seems like Tucson's below the national median level home price, but that sort of tends to mean you should continue to see demand for the region. Again, as affordability problems in other places drive people to go find lower house price regions," said Fisher.

Rising home prices always have two sides, a benefit and a cost if you are a homeowner, it can mean good news. "Because that means your equity is growing in your own home that might afford you the ability to move into a different house, or you're just gaining wealth by sitting still," said Fisher.

But if you're looking to buy and trying to break into the market, this news can be a bit daunting. "Because now prices might be rising faster than your income and you might not be able to save up in order to make that first purchase," said Fisher.