Lower interest rates help, but they aren't the panacea for the market. During this economic cycle, the combination of record job growth and low interest rates has been potent for the Valley's housing market. Although interest rates have stayed below 8.5 percent for several years, Arizona has racked up 92 consecutive months of ranking among the top five states for job growth, said Lee McPheters, Arizona State University associate dean and professor of economics. The result has been more than a half-million new and existing homes selling in metro Phoenix since 1993, enough to create a city larger than Tucson. The Valley's relatively affordable housing market has also helped fuel the boom.
More people can buy homes in metro Phoenix than most other large U.S. cities.
All those factors have worked together to put the rate of home ownership in the Valley at about 65 percent. That's slightly lower than the U.S. rate of a record 67 percent. Economists aren't overly concerned about the disparity because they say Arizona has grown so fast that it has many new residents, who are renting now but plan to buy a home. The housing market continues to mirror job growth as the economy starts to slow down. The job market peaked with more than 100,000 new jobs during 1995-96.