Housing affordability remains a challenge in Arizona: Report
The article reports that housing affordability remains a important challenge in Arizona. According to a recent quarterly report by Common Sense Institute Arizona (CSI), the average home price stands at $426,164, which is $53,400 higher than pre-COVID-19 levels. Despite recent federal interest rate cuts, mortgage rates remain high, requiring Arizonans to work over 64 hours monthly to afford thier housing payments, up from a ancient average of 45 hours. The state is experiencing an immediate housing shortage estimated at 52,846 units, a slight improvement from previous years but still a major concern due to reduced permitting rates. Housing affordability is crucial for Arizona’s economic growth, as high costs may deter new residents and businesses from moving to the state. Most cities and towns in Arizona face housing deficits,with Maricopa County receiving a poor rating for affordability. The report emphasizes that without improvements, the housing shortage and high costs will continue to impede Arizona’s economic potential.
Housing affordability remains a challenge in Arizona: Report
(The Center Square) – Arizona continues to have problems with housing affordability and supply.
A new quarterly report from Common Sense Institute Arizona says the average home price of $426,164 remains $53,400 more expensive than rates before the COVID-19 pandemic.
“So housing prices are still very expensive, and of course, we still find ourselves in a very high interest rate, high mortgage rate environment, even despite the (interest) rate cuts that were announced Wednesday from the Federal Reserve,” CSI’s Zachary Milne told The Center Square.
Someone in Arizona now needs to work more than 64 hours a month to afford their house payment, according to the CSI report released on Thursday. Historically, the average time per month was 45 hours.
Meanwhile, CSI’s researchers estimate Arizona is facing an “immediate housing shortage of 52,846 units.”
That is down 6.9% from a revised estimate of 56,812 in 2024. But Milne, CSI’s senior economist and research analyst, said the annualized pace of permitting through the second quarter fell nearly 12.5% relative to 2024 totals. Absent other changes, Milne said, Arizona is on pace to never close the current deficits.
“It’s really important for the Arizona economy to have sort of affordable housing, if you will,” Milne told The Center Square. “A lot of our growth has been from attracting new productive residents from other states because of the good policies and the environment that we have here in Arizona, but if housing remains so high and unaffordable, it’s obviously going to put a damper on that.”
If people are considering a move to Arizona but they cannot afford a place to live, Milne said they will look elsewhere. Businesses may also decide not to come to Arizona.
“It’s really going to put a drain on the overall economy to the extent that housing remains unaffordable,” Milne told The Center Square. “So that’s kind of what really makes this such an important issue.”
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Seventy-nine of the 90 cities and towns in Arizona had a housing deficit in 2023. That is the most recent year in which data is available.
Maricopa County, Arizona’s most populous county and home to Phoenix, got a D rating from CSI. That is the county’s same rating in CSI’s previous quarterly report.
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