First-Time Homebuyers in Arizona: What You Need to Earn

There's no place like home, and if you're an aspiring first-time homebuyer looking to plant your roots here in Arizona, I'm here to guide you through the current landscape.  Here are some of the latest statistics.

To break into the Phoenix market, for example, you must earn around $86,100, which is actually down about 1% from a year earlier but still higher than the nationwide average. In the bustling streets of San Francisco, you might need a staggering $241,200 to afford a typical "starter" home. But here in Arizona, our beautiful landscape is matched with more reasonable price tags.

Nationwide, a first-time homebuyer must earn roughly $64,500 per year to afford a typical U.S. “starter” home. These starter homes, which are generally between the 5th and 35th percentile by sale price, sold for a record $243,000 recently.

In Phoenix, the median sale price on starter homes is down 9.7% to $325,000, a welcoming trend for new buyers in this competitive, low-inventory market.

Take a look at the graph below, which shows what income is needed to purchase a median-priced home in cities in the West/Southwest.  As you can see, relative to the other major metropolitan areas shown, the income needed to purchase a home in Phoenix is still very reasonable.

Source: Redfin 

What dynamics are at play? Mortgage rates have indeed increased, hitting 6.7% in June, up from 5.5% in June of 2022. The limited supply has led to a 17% drop in sales activity for starter homes year over year. Homeowners locked in by low rates have led to scarce new listings, further influencing the price trends.

 While other places like Austin and San Francisco have seen considerable price drops, Phoenix became a hot spot because of the influx of remote workers and continues to be a sought-after destination that offers stability and affordability.

Now, with mortgage rates more than doubled and the initial surge of remote-work relocations having subsided, the housing market in Arizona has calmed down. 

A Trusted Partner in Your Home Buying Journey

As your trusted Scottsdale, Arizona Realtor, I understand the local market inside and out. Whether you're a first-time homebuyer, an investor, or a seasoned veteran, I'm here to make your Arizona home dreams come true. Together, we can explore options that fit your budget and preferences, ensuring you have a clear path to home ownership in our beautiful state.

Reach out to me anytime with any questions about our Arizona market. I'm eager to assist you, and I'm just a call or email away.