"We are stuck": Homeowners who want to move see no path forward
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Metro Phoenix homeowners who want to upsize or move to a new neighborhood are coming to terms with an unfortunate reality: They're not going anywhere.
Why it matters: People who were lucky enough to break into the housing market before prices and interest rates surged are now unable to move into similar-size or larger homes in the Valley without exponentially increasing their monthly payments.
What they're saying: "We bought in 2012 and always thought we'd move when our youngest graduated high school. She's going into her senior year … and we can't move," Valley resident Denise Allen told us.
- "With housing prices and ... interest levels we are stuck. Even with good equity we can't."
The big picture: First-time homebuyers are taking up a growing share of home purchases as existing owners stay put.
- Half of potential sellers are waiting for mortgage rates to come down before they list, per Realtor.com.
- Roughly one-third of potential sellers have been thinking of moving for multiple years.
Zoom in: Shamika Lynch of Maximizing Tiny Interiors specializes in small-space design. There's been a noticeable increase in clients opting to renovate instead of upgrading to a larger home, she says.
- To maximize minimal square footage, clients are packing multiple functions in each space. For example, one client is adding a bathroom to their existing layout to complete a guest suite (that may double as a nursery one day), Lynch says.
The other side: Some Phoenix homeowners have been able to upsize by selling their home in a desirable neighborhood and moving to a more affordable one, getting a higher-paying job or adding a second income via marriage.
- Megan Slattery told us she purchased a condo in Sunnyslope in March 2020 and paid $1,500 per month for her mortgage and HOA.
- Last year, Slattery and her husband decided to buy a bigger home in a slightly more affordable neighborhood. Their monthly payment more than doubled.
- "It was a very hard decision to take on that large of a mortgage payment. Our motto is 'marry the house, divorce the interest rate,'" she told us.
The intrigue: Missouri resident James Neal and his wife had planned to retire in the Valley and began looking at homes before the pandemic-era housing boom.
- "We keep coming back to the fact that none of the homes we look at are magically worth $200k-$300k more than they were just a few years ago, and nothing about them can justify our abandoning a 4.5% interest rate for something more like 7%," he told us.
The bottom line: "How this vicious cycle can be broken I just don't know. But until it is, I imagine a lot of people will stick with what they've got — if they've got a home at all," Neal said.