Tucson Housing Market Report - February 2023

In its continued effort to curb inflation, the Federal Reserve raised its benchmark interest rate in February by a quarter-percentage point to 4.50% – 4.75%, its 8th rate hike since March of last year, when the interest rate
was nearly zero. Mortgage interest rates have dipped slightly from their peak last fall, leading pending sales to increase 8.1% month-to-month as of last measure, but affordability constraints continue to limit homebuyer
activity overall, with existing-home sales declining for the twelfth consecutive month, according to the National Association of Realtors® (NAR).

New Listings decreased 21.8 percent for Single Family and 17.4 percent for Townhouse/Condo. Pending Sales decreased 17.8 percent for Single Family and 12.0 percent for Townhouse/Condo. Inventory increased 67.0 percent for Single Family and 116.5 percent for Townhouse/Condo. 

Median Sales Price increased 1.7 percent to $363,000 for Single Family and 10.2 percent to $270,000 for Townhouse/Condo. Days on Market increased 116.0 percent for Single Family and 118.8 percent for Townhouse/Condo. Months Supply of Inventory increased 122.2 percent for Single Family and 180.0 percent for Townhouse/Condo. 

With buyer demand down from peak levels, home price growth has continued to slow nationwide, although prices remain up from a year ago. Sellers have been increasingly cutting prices and offering sales incentives in an attempt to attract buyers, who have continued to struggle with affordability challenges this winter. The slight decline in mortgage rates earlier this year convinced some buyers to come off the sidelines, but with rates ticking up again in recent weeks, buyers are once again pulling back, causing sales activity to remain down heading into spring.