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The Grand Canyon State is booming. In 2021, the state’s population grew 1.5%, with some areas expanding as much as ten percent. This explosive growth means there are a lot of people buying a house in Arizona right now. Or, at least, trying to.

The temperate climate and low property taxes (almost half of  the national average) have turned Arizona into a hot market, and property prices have responded accordingly. In the past year, the median price of Phoenix homes has increased 23%, and in Gilbert home prices are up a whopping 31%.

The competitive market doesn’t have to stop you from settling down. If you’re thinking about buying a house in Arizona, here’s everything you need to know.

How to buy a house in Arizona

Buying a house in Arizona is much like buying a home anywhere, with a few additional considerations. 

1. Assess your finances

Purchasing a home is a major investment, so it follows that it requires major financial planning. Your first step to buying a house in Arizona is to review your finances with a fine-toothed comb. Here are some things to look out for:

  • Credit score: The ideal credit score to buy a house will depend on the type of loan you acquire. Review your credit report to understand the types of financing you may be eligible for.
  • Debt-to-income (DTI) ratio: Lenders like to see a DTI of 36% or less and typically won’t approve your loan application with a DTI higher than 43%. However, this can vary by loan type, and assistance programs may be able to help you if your DTI is greater than these thresholds.
  • Cash reserves: Your cash reserves will help you determine how much you need to borrow and how large of a down payment you can make. Review your assets and determine how much you can devote to your home purchase.

2. Save for a down payment

If you’re planning to buy your home with a loan, you’ll need to make a down payment: This is the portion of the home’s purchase price that you need to pay upfront to secure your loan.

Most lenders require a down payment of at least 3 to 5%, but you’ll need a sum of at least 20% to avoid paying private mortgage insurance. Since the down payment is based on the home price, it can vary widely depending on the home and its location. Look to median home prices in your chosen Arizona neighborhoods for a ballpark figure of how much you’ll need to save.

The average down payment on a home was 12%. Keep in mind, though, that the downpayment isn’t the only expense to save for. Check out our detailed breakdown of how much money you should save before buying a house.

3. Get pre-approved for a mortgage

If you don’t have cash to buy your home, you’ll need to take out a mortgage.There are a few different types of mortgage loans, and the first step to getting one is applying for pre-approval. This is an estimate of how much the lender is willing to give you, based on some basic financials and a soft pull of your credit score. In competitive real estate markets in Arizona, you’ll need a preapproval letter before you start touring houses. 

Learn how long preapproval lasts.

4. Partner with a local real estate agent to see the best homes

Your real estate agent is your eyes, ears, and ally in the home buying process. They’ll be there with you from your first showing to your closing date, so it’s crucial to work with an agent you trust.

When choosing an agent, it’s important to remember just that: Your agent is your choice. Interview agents to understand their expertise, communication style, and what their past clients think about working with them. If you need help finding a top agent, consider working with Orchard, we have a dedicated team of local licensed real estate agents who can help you find your dream home.

5. Put in an offer

Homes in Arizona sell faster than the national average. Work with your agent to present a competitive offer to the sellers. Consider the possibility of a cash offer or waiving contingencies. While these options aren’t right for everyone, they could help you gain an edge over other buyers.

6. Go to closing

The sellers accepted your offer — congratulations! But you’re not done just yet. You’ll still have to complete some formalities like getting a home inspection and appraisal before moving into your new home. 

Check out our resources for closing on a home for more information on this final step in the homebuying process.

Bonus: Consider working with a power buyer

If you’re worried about standing out in Arizona’s competitive market, consider working with a power buyer like Orchard. Power buyers are real estate-tech companies that help buyers to have more agency over their home purchase process.

We can help you make a cash offer to land your dream home. Cash offers are four times more likely to be accepted by sellers — giving you the edge you need to buy a home in Arizona.

Should I buy a house in Arizona right now?

Reports from the Arizona RMLS (Regional Multiple Listing Service) show that demand is 17% above normal levels while supply is down 75%. Additionally, investors eager to take advantage of the hot market are buying the limited inventory at shocking rates. Investors bought more than 30% of homes sold in Phoenix at the end of 2021.

Buying a house in Arizona’s competitive market might seem intimidating. Still, the growing population and emerging tech boom of the Grand Canyon state suggest that buying property here will be a good investment for years to come. Rising home values in Arizona can also help you build equity in your home, which contributes to your overall net worth.

Whether you’re ready to put in an offer or just starting to plan your path to homeownership, check out our Buyers Resources for more information on simplifying your home buying process.

Arizona first-time homebuyer programs

Arizona offers several home buyer assistance programs, including ones for first-time buyers. These programs are designed to empower buyers and lower the burden of entry into the real estate market.

Home Plus

First-time and experienced home buyers can take advantage of the Arizona Industrial Development Authority’s HOME+PLUS program, which has helped over 32,000 people buy a house in Arizona. This program offers 30-year fixed-rate mortgages with up to 5% down payment assistance for those with:

  • An annual income under $112,785
  • A minimum credit score of 640 or 680, depending on loan and home type
  • A maximum debt-to-income (DTI) ratio of 45% to 50%

If you qualify, you’ll be required to complete a homebuyer education course. 

Additionally, the property you’re buying in Arizona must be a single- or two-family home, condominium, townhome or manufactured home. It must be used as your primary residence and not a rental property.

You can get started by finding a participating lender, who can help you get a qualifying mortgage, whether it’s conventional, FHA, VA, or USDA; you do not apply with Home Plus directly. 

Home in Five Advantage 

Low and moderate income-families in Maricopa county are eligible for down payment and closing cost assistance from the Home in Five Advantage program after completing a homebuyer education course. 

Borrowers can use the program to help secure 30-year fixed-rate mortgages and a secondary loan to cover up to 5% of down payment and closing costs. You can get even more assistance if you work in a certain profession or buy a home in a designated neighborhood. 

To qualify, borrowers must be purchasing a home in Maricopa County that will be used as their primary residence. They must also have:

  • Minimum credit score of 640
  • Annual income below $112,785
  • Debt-to-income ratio of 50% or less

Tucson Pima County HOME Down Payment Assistance Program

For home buyers in Southern Arizona, the Tucson Pima County HOME Down Payment Assistance Program offers assistance for up to 10% of the home’s purchase price. To qualify, home buyers must have income and assets below a certain threshold, contribute up to $1,000, and complete homebuyer counseling.

Where to buy a house Arizona

You can find everything from A to Z in State 48 — it’s just a matter of knowing where to look. Here are some of the most popular cities in the Grand Canyon State and what they offer.

Phoenix

If you want to take advantage of Sonoran living while staying connected to city life, the Valley of the Sun is for you. Enjoy hiking Camelback Mountain and Piestewa Peak, dining out in a world-class food and drink scene, and an easy commute in and out of the city center. Phoenix is truly the perfect balance of city and escape. But you’ll have to act fast to buy here: the median number of days a home is on market is just eight according to Phoenix real estate trends.

Scottsdale

Scottsdale, Arizona, has been dubbed one of America’s “Most Liveable Cities.” It earned this title thanks to its ample offerings of hiking trails, luxurious golf courses, and lively nightlife. Its proximity to North Phoenix makes commuting a breeze, too. Buying into the market here can be a little pricey. According to Orchard’s Market Insights, the median sale price in Scottsdale is $850,000.

Tempe

Best known as the home of the Arizona Sun Devils, Tempe is located in the heart of Arizona. This bustling college city is one of the most accessible, with easy access to the freeway, Phoenix Sky Harbor Airport, Light Rail, and bike lanes. If you’re looking to buy in Arizona, Tempe is more affordable compared to cities like Phoenix and Scottsdale, with a median sale price of $500,240.

Mesa

If the hybrid urban and suburban lifestyle of Phoenix appeals to you, but the hustle and bustle feels like too much, Mesa is a great alternative. Mesa is the largest suburb in the United States, with its own thriving downtown, shopping, and outdoor activities. Like the rest of Arizona, housing inventory is tight in Mesa

Gilbert

From “Hay Shipping Capital of the World” to “One of America’s Top 20 Thriving Cities,” Gilbert, Arizona, has undergone a radical transformation in the last 20 years. This suburban city is nestled between the Superstition Mountains, Tonto National Forest, and Saguaro National Park, making it one of the most picturesque in the country. It also has a thriving shopping district known for its antique shops and boutiques. But you’ll have to pay to break into the real estate market — the median sales price for Gilbert homes is $617,000.

Tucson

Home to the Arizona Wildcats and some of the best Mexican food in the state, Tucson, is a city for those who love arts, culture, and the old West. Enjoy the comforts of a city center and the wide open-spaces of a western town in Arizona’s second-largest city. Homes in Tucson are more affordable, too — the median home sale price is just $338,000.

Flagstaff

Flagstaff — or “Flag,” as locals call it — is a popular summer destination for central and southern Arizonans to escape the heat. It’s also home to world-class skiing and hiking, a charming downtown with bustling nightlife, and Northern Arizona University. The median value of homes in Flagstaff is a whopping $780,000.

What should you look for in an Arizona home?

Air conditioning

Air conditioning is a must in Central and Southern Arizona cities and towns and even a nice addition in the cooler Northern regions. Ask your home sellers for detailed information on their A/C unit. If it hasn’t been serviced in a while, consider negotiating with them to get a check-up before it becomes yours — a new unit can cost up to $14,000 plus installation fees.

Pool

Arizona loves pools, so much so that it’s the state with the most pools per capita. If you’re buying a house with a pool, make sure to get it inspected. These can usually be completed as a part of your standard home inspection for an additional fee.

Fire protection

Although you may imagine Arizona to be a state of barren desert, it’s home to six national forests, including Coconino Forest, the largest ponderosa pine forest in North America. The forests are beloved state treasures, but in recent years, forest fires have become increasingly common.

If you live near or by one of these forests, your home is at risk of wildfire. Fire-harden your home to keep yourself and your neighborhood safe from increased wildfire risk. You can do this by:

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