Phoenix mortgage demand is rising even as rates climb above 7%, signaling continued buyer resilience in today’s market.
As seen on AZFamily Ch. 3
Although the Federal Reserve recently paused its benchmark interest rate, mortgage rates remain near their highest levels in more than two decades. Many buyers expected mortgage demand to slow, yet recent data shows applications are actually increasing. The trend highlights that today’s housing market is influenced by much more than interest rates alone.
During a recent Arizona’s Family (3TV) segment, Trevor Halpern, CEO of Halpern Residential, explained why buyers continue entering the market despite borrowing costs remaining elevated.
Mortgage Rates Aren’t the Whole Story
While the Federal Reserve chose not to raise its benchmark rate during its latest meeting, officials indicated additional rate hikes remain possible if inflation continues to persist.
Thirty-year fixed mortgage rates are not directly controlled by the Federal Reserve. Instead, they closely follow movements in the 10-year Treasury yield, which is heavily influenced by inflation and overall economic conditions.
With mortgage rates hovering around 7.3%, many buyers are naturally focused on financing costs. However, Trevor says interest rates represent only one piece of the homebuying decision.
“Interest rate is the tip of the iceberg.”
Trevor explains that buyers should also consider long-term home appreciation.
“If you wait another year, interest rates may fall by 1%, but home values could increase by 3% to 5%.”
For many buyers, delaying a purchase could actually increase the total cost of homeownership, even if financing becomes slightly cheaper later.
Why Mortgage Applications Increased
Despite higher mortgage rates, mortgage applications rose more than 5% in the latest reporting period.
Refinance applications increased even more, jumping 13% from the previous week.
Many homeowners are using the equity they’ve built over the past several years to improve their financial situation.
Instead of refinancing solely for a lower mortgage payment, many homeowners are consolidating higher-interest debts such as:
- Credit card balances
- Auto loans
- Other personal debt
By rolling these obligations into their mortgage, many households can significantly reduce their total monthly debt payments.
Some homeowners are also refinancing now because they believe mortgage rates could move even higher in the coming months.
Phoenix Inventory Remains Limited
Although housing inventory across the Phoenix metro area has increased slightly in recent weeks, supply still falls well short of buyer demand.
The Valley continues attracting new residents and major employers, helping support housing demand even as borrowing costs remain elevated.
This ongoing imbalance between supply and demand continues supporting home values throughout much of the Phoenix market.
What This Means for Buyers
Higher mortgage rates have certainly changed affordability, but they have not eliminated demand.
Many buyers recognize that waiting for significantly lower rates may come with higher home prices and increased competition.
Every buyer’s situation is unique. The right time to purchase depends on personal finances, long-term goals, and local market conditions—not interest rates alone.
Working with an experienced real estate professional can help buyers evaluate both today’s financing environment and the long-term financial impact of waiting versus purchasing now.