June 5 Real Estate Market Update

Here is our latest table of Cromford® Market Index values for the single-family markets in the 17 largest cities

For the eighth week running, we have 17 of the 17 cities showing improvement for sellers over the past month. However the improvement in the market for sellers is decelerating, with the average CMI increasing 14.8% over the past month, down from 16.9% last week.

Most improved are Cave Creek and Fountain Hills (up 22%). Not far behind are Glendale, Peoria, Maricopa, Chandler, Avondale, Queen Creek and Buckeye. The slowest rate of improvement for sellers is 1%, achieved by Goodyear.

15 cities are in seller's markets, 2 are balanced and none is a buyer's market.

Demand remains weak and is clearly weakening further after 30-year fixed mortgage rates exceeded 7% last week. Listings are going under contract at a slower rate than this time last month. However, high interest rates are discouraging to sellers too, and the flow of new listings is getting alarmingly low. Only 7,205 new listings were added to ARMLS over the past 4 weeks. We saw 11,392 in the same period last year, so they are down almost 37%.

With supply and demand both dropping, volume is likely to be weak between June and September. It is currently a contest between sellers and buyers for who loses motivation fastest. However things could change quickly if 30-year fixed mortgage rates dropped back to 6.5% or below. The highest level recently was an average of 7.14% on May 26. Today we are back to 6.85% which is psychologically a lot easier to live with than numbers over 7%