Phil Sexton was interviewed by Arizona’s Family 3TV/CBS 5 to share his knowledge of Arizona’s current housing market. CLICK HERE to watch and read below for insight as to why many homeowners are hesitant to sell.
Phoenix-Area Homeowners Hesitant to Sell, Don’t Want to Lose Their Low-Interest Rates
From PHOENIX ARIZONA’S FAMILY 3TV/CBS 5 – There are homes for sale across the Valley, just not many. Real estate agent Phil Sexton, with the Sibbach Team, said buyers have fewer options when inventory is this low and prices remain high. “At the beginning of this year we thought inventory was going to rise, but the opposite thing has happened,” said Sexton. “We’re starting to see inventory come down. It just dropped below 13,000 active homes.”
But why exactly are ‘homes for sale’ so hard to find? One of the big reasons is hesitant home sellers, according to Sexton. Many homeowners currently have a mortgage with an interest rate of around 3%. Interest rates today are about 7%.
The thought of giving up that low rate is keeping many people from putting their houses up for sale. “You may be sitting on a loan that you only owe $400,000 on. But when you buy that house, you’re going to owe $600,000, and your interest is higher, so your monthly interest could potentially double,” said Sexton.
Sky-high rental prices are also part of it. Many homeowners can rent out their homes and cover their mortgage without having to sell.
Real estate expert Cliff Freeman, with the Freeman Group, doesn’t think homeowners should be motivated by interest rates alone, and if they want to sell, they should sell. “You marry the house, and you date the rate, which means that at some point, rates are going to come back down and you can refinance into a lower rate,” said Freeman. “It’s just not in the crystal ball yet. A lot of people can’t see that far out.”