Home prices showed steady climb in 2004

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11:56 AM MST Tuesday
Home prices showed steady climb in 2004
Valley home prices, both new and resales, and interest rates were on the rise in 2004, according to research released Tuesday by the Arizona Real Estate Center.

Even though the average interest rate on a 30-year mortgage neared 6 percent during the summer months of 2004, the annual average interest rate remained unchanged from the 2003 average of 5.5 percent.

"While interest rates were expected to increase during 2004, they remained fairly stable due to low inflation," said Jay Butler, director of the Arizona Real Estate Center located at Arizona State University's East campus.

In the resale home market, the median home price increased 12.8 percent from $155,000 in 2003 to $174,815 in 2004. The median home price for resales opened 2004 at $156,000 in January and increased to $190,000 by December.

For new homes, the median home price increased 12.6 percent from $173,240 in 2003 to $195,000 in 2004. During 2004, the median home price increased from $178,110 in January to $211,640 in December, a 19 percent increase.

Butler added that based on 85 percent loan-to-value, the average monthly mortgage payment would have increased from $735 in January to $920 in December in Arizona.

Research indicates that if the median home price remains at $190,000 as found in December 2004, affordability can only be maintained with a mortgage rate at 6.125 percent.

Valleywide, housing resales and new homes were most affordable in Chandler, Gilbert, and in the West Valley communities of Avondale, Goodyear, and Surprise.

North Scottsdale's housing affordability index for both resales and new home sales continued to decline.

For more: www.east.asu.edu.