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What rising home prices mean for affordability in metro Phoenix

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Posted at 8:36 AM, Feb 23, 2022
and last updated 2022-02-23 10:36:23-05

For the 31st month in a row, metro Phoenix has topped home price growth — at a time when interest rates are inching up and more homeowners are worried about affordability.

Phoenix topped the nation with the highest year-over-year gains, showing 32.5% growth in December, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. Coming in second was Tampa, Florida at 29.4%, and Miami, at 27.3%, while the national average was 18.8%.

That national composite index was the highest calendar-year increase in 34 years of data and substantially ahead of 2020's 10.4% gain, said Craig J. Lazzara, managing director at S&P DJI.

Even as home prices continue to climb upward in metro Phoenix, home sales are still occurring at a healthy level, said Steven Hensley, advisory manager for Zonda housing market research firm.

"This suggests elasticity exists in the metro Phoenix housing market presently," he said. "As interest rates continue to move higher, more and more buyers will feel the pinch, particularly first-time homebuyers without equity built up in an existing home."

Read more of this story from the Phoenix Business Journal.