Frustrated with the Arizona Housing Market? Here Are Your Next Steps

Do you live in the Grand Canyon State? Then you already know how expensive the Arizona housing market has gotten around here. Let's take a peek at how the price of a single family home has changed from March 2019 to March 2024 in a few of our cities.¹

A lot can happen in five years! Odds are if you haven't owned a home through these changes, then you're probably feeling a little behind right now. Unfortunately, we can't wave a magic wand and travel back in time. But, there are a few actionable steps we can work on now to make that dream of buying a house a reality. 

Arizona Housing Market Too Pricey? Try These 3 Steps

Step 1: Free Up Your Money

Pay down debt

If you have debt, the best thing to do is to keep making consistent, on-time payments in full. Over time, this will lower your debt to income ratio, boost your credit score and give you more wiggle room to open up that mortgage. 

Save money (duh)

We recommend specifically saving for an emergency fund first. Then for your future home's down payment and other home savings goals. 

"Why an emergency fund first?" Because, when your car needs repairs or you have unexpected medical bills, you can tap into that savings account instead of using a credit card. 

Unpopular: Live below your means

If owning a house is your *dream* but you're living in a luxurious Scottsdale apartment, driving a sweet ride and spending more on entertainment than you should - then are you really making as much progress as you could? Living lavishly isn't cheap!

According to a recent study, we found out that 62% of Americans live paycheck to paycheck. When they were asked why, these were two of the most common reasons holding them back. 💔

1. Too much debt
2. Nonessential spending

When your income increases, try to resist the urge to upgrade your standard of living with it. Although difficult, this strategy can prevent you from overspending and overborrowing - giving you the financial capacity to save more for those bigger goals.

Step 2: Find More Funds

Increase your income

When it comes to getting approved for a home loan, your income is one of your biggest superpowers. This shows your lender how much income you generate on a consistent basis, proving you have the funds to pay back the loan. To get approved for a house in this market, a foolproof strategy is to increase your pay. Searching for a higher-paying job or taking on a side hustle are both ways you can attempt to increase your income.

A caveat: if you're considering a government insured FHA loan, you will need to have at least two years of steady work history at the same employer. So, maybe think twice before chasing a higher salary at a new job.

Research down payment assistance programs

If you're a first-time homebuyer, you can tap into down payment assistance. These are special programs for people who have never owned a home before (or people who haven't owned a home in three years) to apply for funds. You can sometimes get up to $50,000 to go directly toward your down payment or closing costs! It's definitely worth looking into.

To find the best grants, we recommend connecting with your local credit union and asking their mortgage team directly. They will know your area best and can share potential opportunities. They'll also be able to tell you about any additional qualifications. For example, you may have to complete an online homebuying course, meet a particular income threshold, or be required to stay in the home for a few years before you can sell. Worth it!

Step 3: Consider Alternatives

Explore relocation

We all know that certain areas cost more than others! That's why finding an affordable home goes hand in hand with finding an affordable location. 

One option is to explore nearby neighborhoods. For instance, if you currently work and reside in Mesa, you could look at moving to a nearby neighborhood like Queen Creek, San Tan Valley or Florence where you can get a lot more bang for your buck. You'll just have to weigh your options and consider a longer commute. For more ideas, check out a few of the best neighborhoods in Phoenix.

Re-evaluate expectations

We all have a picture in our minds when we think of the *perfect* home. A three car garage, a sparkling pool and maybe a few acres of land in the back.

If finding that dream home in your price range is like looking for a unicorn, then it might be time to re-evaluate. There's no shame in finding a smaller starter home and living there for a few years while the Arizona housing market does its thing. Try taking a peek at townhouses and condos - who knows, you might be surprised!

Wrapping Up

We get it, it can feel so frustrating to browse the Arizona housing market and not find the prices you want. But with patience, intention and a little strategy, anyone can find their first home under the sun. Remember, "home" is more than just a building. It's where you spend time with family and friends and make lifelong memories. That's something you can enjoy wherever you live. ❤️

This article is intended to be a general resource only and is not intended to be nor does it constitute legal advice. Any recommendations are based on opinion only. Rates, terms and conditions are subject to change and may vary based on creditworthiness, qualifications, and collateral conditions. All loans subject to approval.

Sources

1 Redfin

Phoenix https://www.redfin.com/city/14240/AZ/Phoenix/housing-market 

Payson https://www.redfin.com/city/13882/AZ/Payson/housing-market 

Flagstaff https://www.redfin.com/city/6089/AZ/Flagstaff/housing-market 

Tucson https://www.redfin.com/city/19459/AZ/Tucson/housing-market 

2 PYMNTS https://www.pymnts.com/consumer-finance/2024/nearly-half-of-us-consumers-earning-100k-live-paycheck-to-paycheck/