MESA, AZ — The average 30-year fixed interest rate dropped to 6.49% on December 1, according to the Freddie Mac Primary Mortgage Market Survey.
A week prior the number was 6.58%.
It's better news for buyers who have been dealing with interest rates that have more than doubled during the same time in 2021.
The change has increased monthly mortgage payments to unaffordable levels and has scared off a lot of would-be buyers.
But the increases can also give buyers more negotiating power because fewer people are looking and properties are staying on the market longer, according to associate real estate broker Monie Wilder.
"Now you have the opportunity to negotiate, and to create a plan and a deal that really works for you and your family," she said.
Her clients Violet Xiques and Nyah Lowell said they found that to be true in the purchase of their Mesa townhouse.
"We're so ecstatic that we didn't have to go through all of that that was happening just six months ago," Xiques told ABC15.
Back then, bidding wars and cash buyers would have made the deal they got on their home impossible.
But on their very first day of looking, the couple found the four-bedroom, two-and-a-half-bath home of their dreams and paid tens of thousands less than the asking price.
According to Zillow Research, the Phoenix market has seen a more than 60% decrease in demand when compared to a year ago.
Wilder said the cool-down means more leverage for buyers if they can be flexible.
"It's just strategy. And it's just following a plan and knowing what your threshold is. Where you're going to pull the plug or you're not," she said.
One strategy she offers: look at ugly houses.
"If you get the right shell: so, the right place, the school district you want, the size you want the lot. If you can nail that down, you can structure deals where the seller then comes through and helps you pay for these different cosmetics are kind of 'nice to haves,'" Wilder said.
Another option is target flips.
"Most of the time, when something's newly remodeled, it's somebody who's flipping it. Which means that they didn't plan to own this house for very long and now they must sell it," she said.
The need to sell could mean a significantly lower price on the buy.
According to Wilder, "that big price decrease automatically helps almost mitigate the interest rate increase." Which is what happened to Xiques and Lowell.
Their home was flipped and originally listed at $400,000 which was out of their price range. They paid $339,000.
"Plus, the sellers bought down the rate, plus they're paying for our new laundry room and closing costs," Lowell said.
Making a once unattainable home completely within reach.
"I'm just so excited," Xiques said. "I can't believe we have our own place."
