Cromford Market Update
Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities.
The market continues to soften and we now have 7 cities showing improvement for sellers over the last month and 10 showing deterioration. The average change over the last month is -3.3%, and this is greater than last week at -1.5%.
There is still a wide range between the cities improving the most for sellers (Buckeye, Chandler and Paradise Valley, all up 9% or more) and those moving in favor of buyers (Cave Creek -23%, Glendale -18% and Tempe -20%).
The average 30 year fixed mortgage rate peaked at 7.22% a week ago and caused some alarm. However the rate has fallen every day since then and currently stands at 6.87%, the lowest rate since June 20. These figures are from Mortgage News Daily.
Demand is very sensitive to rate uncertainty and the recent decline in demand can be attributed to rates over 7%. However if rates continue to decline from their current level, we should see some pick-up.
When rates stay over 7% then our weak new supply is sufficient to compensate for the homes going under contract. Below 7%, we tend to see supply falling further from its already weak levels.
Over the past 2 weeks the CMI* has reflected poor demand caused by the typical 30 year fixed rate staying consistently over 7%. However the CMI for all major cities remains over 100 and for most of them it is over 150. We have a seller's market in 16 of the 17 cities and a balanced market in Buckeye.
*Cromford Market Index™ (CMI) is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.