News Article From: 04-21-2006
The first article, Mortgage rates head up, up, up, from the Arizona Republic, reports that mortgage rates hit their highest point in almost 4 years this week, a move that is expected to slow home sales even more. The average rate on a 30-year fixed rate loan hit 6.53 percent, up from 6.49 percent last week. "Rates are likely to reach 7 percent this year, and that will likely put a brake on real estate in Arizona," said Terry Turk, president of Sun America Mortgage Co. A 50 percent rise in home values in 2005 means many buyers need low rates to afford a home. This weeks rates were the highest since July 2002.
The second article, Census: Americans leave big cities, from the USA TODAY, reports that among the 25 largest metropolitan areas, 18 had more people move out than move in from 2000 to 2004. One of the exceptions, of course, is the Phoenix metro area, which averaged 48,598 annual migration during that period. But big cities like Chicago, New York and Los Angeles lost residents during that time frame. Arizona, Nevada and Florida were the states with the most growth, while New York, California and Illinois lost the most population. "It's a case of middle class flight, a flight for housing affordability," said William Frey of the Brookings Institute, a Washington think tank. "But it's not just white middle class flight, it's Hispanics and blacks, too." The article cites affordable housing in Phoenix as the main reason it is attracting new residents from other states.
The third article, Amid concerns, developers love condos, from the Arizona Republic Ahwatukee, reports that the condo projects and condo conversions just keep coming, even though some experts wonder if they will all be needed. There were 4,500 permits issued last year in Maricopa county for condo units, the largest number in 10 years, according to Jay Butler at the Arizona Real Estate Center at ASU. And on top of that, at least 10,000 apartment units were converted to condos last year. Developers see a market for them because they are more affordable than single-family homes. Mesa, Chandler and especially Tempe are getting high-rise condos- at least a dozen have been or will be built in Tempe. Converted condos are selling well but competition is getting stiff, evidenced by developers offering incentives like zero closing costs, zero payments until 2007, and zero condo fees until 2007, to name a few.