The Federal Reserve’s recent decision to not raise interest rates is welcome news to those who may be sitting on the fence about buying a home.
For potential buyers in Phoenix — and other parts of the country — that means more time to take advantage of record-low mortgage rates and continued opportunity for spending.
However, a housing expert said the key to home spending is more than just low interest rates. It really rests in whether lenders are approving loans or not.
“There is a little more relaxation in underwriting,” Michael Orr, director of the Center of Real Estate Theory and Practice at the W.P. Carey School of Business at Arizona State University, said.
That, Orr told KTAR’s That Real Estate Show, is more likely to have an effect on the increasing demand for home purchases than the interest rate remaining low.
Orr pointed out interest rates have been low for quite some time, so there really is no excuse for not buying a house based on current rates.
He said, even if the Fed did increase rates, it likely would have been by a small amount and not have a significant impact on the housing market.
Here in the Phoenix area, Orr said home sales and the amount of money being spent on homes are looking healthy for this time of year.
“If you look at dollars spent,” he said, “We’re the highest we’ve been since 2006, so it’s been a good year.”
However, he did add that the Valley is still plagued by not having enough supply — especially with houses under the $250,000 price point. Orr said he didn’t think that problem was going to go away soon and that the conversation about short supply will likely continue into 2016.
You can hear Michael Orr’s analysis on the housing market weekly on That Real Estate Show with Realtor and host Diane Brennan. The show airs Sundays at 8 a.m. on KTAR News 92.3 FM.
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