Housing boom no longer a credit lifeline for many in Valley

The Arizona Republic reports:

The housing boom has bailed out a lot of people in metropolitan Phoenix.

Homeowners caught between higher bill payments and flat incomes have been able to tap their rapidly rising home equity to stay afloat or even buy new cars and furniture. Others have been able to refinance using adjustable-rate loans to cut their payments. Those with too much debt have been able to evade foreclosure and bankruptcy, and even pocket some cash, by selling their homes quickly.

The 55 percent run-up in Valley home prices during the past year hurt people trying to buy a home but helped those struggling to keep one.
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But now, Phoenix's home appreciation rates are leveling off, and it's taking longer for homes to sell. At the same time, interest rates are rising on many home equity lines and adjustable-rate mortgages. Gas prices are higher. Health care is costlier. Credit-card payments are rising.

A growing number of people are so stretched that they are spending more than they earn. Valley homeowners who have already tapped most of their equity can't count on another huge jump in values to get by.

It appears home prices will not be up 55% next year in Phoenix.