Arizona is a large state located in the southwestern part of the United States. It is the sixth largest city in terms of area and 14th largest in terms of population. Overall, the state has a population of around 6.3 million people, more than half of which live in the Phoenix metro area. Much of the real estate market and demand for mortgages relies around Phoenix, which has seen significant growth over the past ten years.

Mortgage Laws in Arizona

Due to the high rate of subprime mortgage foreclosures that took place in Arizona following the housing bubble, Arizona has tightened its mortgage laws. Mortgage lenders now face more restrictions when it comes to providing loans to borrowers with lower credit scores or insufficient levels of income. Furthermore, while they were popular several years ago, lenders are no longer permitted to provide loans with negative amortization or mortgage refinanced loans that do not provide the borrower with a clear financial benefit.

Arizona Interest Rates

Interest rates around Arizona are comparable to other states in the country. The interest rates on 30-year fixed-rate mortgages are around 4.15%. 15-year fixed-rate mortgages and 5/1 adjustable rate mortgages are closer to 3.25%. Borrowers that have lower credit scores or lower income will likely be charged higher interest rates. Furthermore, those that put down less than 20% will have to pay additional private mortgage insurance.

Arizona Housing Outlook

The housing market in Arizona was one of the most turbulent during the housing crisis. Due to the growth and expansion of Phoenix during the housing bubble, housing prices skyrocketed from 2000 until 2006. However, once the recession hit, the rate of foreclosures in the state increased dramatically and housing prices fell considerably. While some markets saw a 50% decline in value, the values all across the state have stabilized over the past year and have started to increase. Most experts agree that there will be a steady improvement in real estate values over the next few years.

Largest Cities in Arizona

Overall, there are ten cities in Arizona that have populations in excess of 100,000 residents. Nine of the large cities are located in Maricopa County, which is the Phoenix Metro Area. Phoenix is the most populated city in the state, and the fourth most populated in the country, with a population of nearly 1.5 million residents. Tucson, which is located in southern Arizona, is the second most populated city with a population or 520,000 residents. Mesa, Chandler, and Glendale, all of which are located near Phoenix, are the third, fourth, and fifth most populated cities.