Could Phoenix Housing Prices Cause a Recession?

The western half of the United States is quickly becoming one of the least affordable areas in the country for a family to buy a home. In the past two years alone Phoenix housing “prices have risen so far so fast that the ‘typical’ family only has 80 percent of the income necessary to qualify for a mortgage on the ‘typical’ home.”

Phoenix housing prices will have to decrease if locals are expected to keep buying homes in the future. A local price cooling is, therefore, inevitable. However, as people stop buying because Phoenix housing prices have climbed almost completely out of reach, the impact may be “far-reaching.”

“The coming housing slowdown will have national implications,” and the markets that most benefited from the real estate boom, such as the Phoenix housing market, will be the hardest hit. Some economists believe a recession is possible as there could be a good deal of job loss in areas made strong by the Phoenix housing boom, including construction, banking and real estate.