Falling Rates Are Reigniting Phoenix’s Housing Market
After a year of uncertainty, the winds are shifting in Phoenix real estate. Mortgage rates are falling, buyers are coming off the sidelines, and sellers are rushing to meet the surge in demand. Activity is rising across the Valley — but so is competition. Whether you’re buying or selling, the key now is moving strategically while this window is open.
According to the Freddie Mac website, as of September 11th, mortgage rates, which had hovered near 7% for much of the year, have now dropped to 6.25–6.35% — their lowest in nearly a year. FHA, VA, and USDA loans are near 5.5%, pushing affordability more than 5% higher year-over-year when combined with slightly softer prices.
Buyer Demand Is Rebounding
Lower rates are reshaping both affordability and buyer psychology:
Contracts in escrow are up 9% from last August.
Daily sales volume is up 8% year-over-year (adjusted for working days).
Monthly payments are down roughly 12% from last year.
Buyers are showing a strong preference for move-in-ready, modern homes, while dated listings are sitting.
Many who paused their search during the rate run-up are reentering the market with renewed urgency — hoping to act before competition intensifies.
Sellers Are Leaning Back In
Sellers are responding to that revived demand by bringing more inventory:
Roughly 2,200 new listings per week are hitting the market.
That’s 6.4% higher than last year and nearly 30% above September 2023.
Average days on market have dropped to 33.
Well-priced, well-prepped homes are selling quickly, while overpriced or outdated ones are being overlooked.
Condition and pricing discipline are key — buyers remain selective even as activity rises.
Builders Are Offering Incentives
To counter slower absorption in the entry-level and condo segments, many builders are offering:
Closing cost credits
Rate buydowns
Upgrade packages and design center allowances
Buyers who are fully prequalified and ready to act are often in the best position to capture these perks.
The Market Outlook: Cautious Optimism
Prices are softening across most neighborhoods.
Luxury areas like Paradise Valley remain stable or rising.
The overall tone is cautiously optimistic: lower rates are pulling buyers back while sellers and builders adapt.
This moment offers rare opportunities for both sides — but only for those who align their strategies with the current market.
The Phoenix market is shifting quickly, and windows like this rarely stay open for long. Lower rates have brought new energy, new competition, and new opportunities — but timing and strategy are everything. Whether you’re hoping to secure a home before competition heats up or position your property to stand out while demand is strong, having a clear plan matters.
As a local REALTOR®, I help clients navigate these turning points with clarity, data-driven insight, and a calm, confident approach.
If you’re thinking about buying or selling in the Phoenix area, let’s talk. Together, we can chart the smartest path forward in this changing market — and make your next move your best one.
This article is provided for general informational purposes only and should not be construed as financial, legal, or real estate advice. Market conditions and interest rates are subject to change without notice. Readers are encouraged to consult with qualified mortgage lenders and financial advisors before making any real estate decisions.