30-year mortgage rates top 7% as Flagstaff buyers, renters face rising costs

FLAGSTAFF, AZ (AZFamily) — The average 30-year mortgage rate is now topping 7% nationwide, adding pressure for buyers in an already difficult housing market and affecting sellers, especially in smaller markets like Flagstaff.

For Flagstaff buyers, prices and interest rates continue to rise while housing stock remains limited. Even renters are finding it harder to find affordable housing.

For sellers, demand is slowing and Flagstaff is turning into a buyer’s market.

Flagstaff costs outpace Phoenix

Buyers and renters in Flagstaff spend 11% more on housing than those in the Phoenix metro area, according to Redfin.

It’s expensive for everyone, especially students.

“From a student perspective, I would say it is probably the hardest part about being in college,” said Jalene Perez, a Northern Arizona University senior who lives with four other roommates.

Flagstaff ranks as the third most expensive college town in the country, according to Redfin.

“I do have to work 24 to 32 hours a week just to afford to live. So it’s definitely difficult and that’s on top of school,” Perez said.

High rates, low inventory limit buyers

For Flagstaff homebuyers, the combination of high interest rates with low housing stock has made homeownership harder to achieve.

“We’re at about 30-year lows for transactional volume nationally, and Flagstaff is very much within that,” said Christopher Hallows, branch manager at Benchmark Mortgage.

Hallows said the good news is that high interest rates mean less competition between buyers, and they can often negotiate for more.

“You can negotiate the roof to be fixed. You can get a new water heater,” he said. “You can maybe have the seller cover your closing costs or maybe all of those. We’ve seen upwards of 5-figure type negotiations.”

Hallows said federal loans and local housing assistance programs help first-time homebuyers.

He added that getting into homeownership is a worthy investment despite the upfront costs.

“No, this is a proven concept; people love Flagstaff,” Hallows said. “So while you have to spend quite a bit of money to get in, that’s going to be a stable investment as long as you have staying power.”

Hallows said for sellers, it’s important to have realistic expectations. They’ve seen some sellers list their homes tens of thousands of dollars above what they should be, which is why homes can sit on the market for long periods.

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