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The Condo Mania Team

News > The Tough Road For Phoenix First Time Homebuyers

published on 2023-09-23

First Time Homebuyer Keys

The last 5 years has been good for home owners. As of 2022, nearly half of all mortgaged properties had over 50% in home equity, and owners are staying put with that equity, keeping housing prices high. Even though the rate of growth in home prices has slowed in 2023, a combination of high prices and high mortgage rates has kept first time homebuyers on the side lines.

First-time buyers made up 26% of all home buyers, down from 34% last year, according the National Association of Realtors.“Millennials shrunk as a share of buyers this year, and first-time buyers dropped to their lowest share of buyers ever recorded in 41 years of data,” the NAR stated. “Urgent action is needed to ensure a generation of Americans has access to the American dream and the opportunity to build wealth and achieve financial security through homeownership.”

There is no sign of this trend changing, even in the Phoenix area, which in the past has been very friendly to first time homebuyers because of affordable prices and plenty of inventory.

Home ownership is one of the largest sources of wealth in the U.S. According to the National Association of Home Builders, "The primary residence was the largest asset among households across various age groups — with the exception of the 55-64 demographic, where the primary residence and business interests were equally dominant assets. It was also the largest asset across racial and ethnic demographics, with the primary residence accounting for more than 30% of household wealth for non-white and Hispanic/Latino households." Part of the reason that home ownership is a source of wealth is because it's a kind of forced savings. Principle payments on a mortgage and home price increases both contribute to long term wealth.


The Fed's previously loose monetary policy fueled construction of apartments, not only in Phoenix, but in much of the country. In the greater Phoenix area, thousands of apartments are being constructed right now, to the point where mid-town and downtown Phoenix and Desert Ridge don't look recognizable in some areas because of the new midrise apartment buildings that have popped up. Even Toll Brothers is getting into the rental business, with a new 403 unit apartment building that opened up in Midtown Phoenix this spring.

Meanwhile, New Construction condos in Phoenix are few and far between. Edison Midtown, one of the more affordable new construction condos, start at $549,000, which is no doubt unaffordable for most first time home buyers.


First time homebuyers are saddled with other issues that keep them out of the housing market. The primary factor is mortgage rates over 7%, which add to the monthly housing costs in a big way. The other major factor is the down payment. Higher apartment rents and debts are making it hard for 20 somethings to save for that down payment on their first place. If you're in that category, it may be time reign in spending and put some extra effort in paying down debt.


Condos can still be a good choice for first time home buyers in Phoenix. Even though there are a smaller number of options, there are some good ones!

A one bedroom condo at Larronata, in North Phoenix next to the Scottsdale border, is currently listed at $300,000. With a 20% downpayment, your monthly mortgage (7.2% rate), HOA and property tax payment is approximately $1850, which is comparable to the new apartment rents just down the street. And in 5 years, you'll have accumulated $7700 in home equity just from your monthly principle payment alone, which wouldn't have happened if you picked the apartment down the street. If you don't have a 20% downpayment, the monthly payment will increase because of the added mortgage amount and mortgage insurance.

Need to go lower? Consider Red Rox, which is across from Papago Park and an easy commute to Phoenix or Downtown Scottsdale. A one bedroom condo here currently goes for the low $200's, which could bring your payment down closer to the $1500 range.

You might be able to get a better deal if you buy a fixer-upper condo, but it would be wise to price out new carpet, paint, and a kitchen and bath remodel so you can factor that into the price differential.

Some more affordable condo communities are included below. The first step would be to get in touch with us so we can send you a comprehensive list in your area and price range, and also give you some names of mortgage lenders who can let you know what you qualify for.


Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.

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Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.

Last Updated: 2024-05-23 00:48:21