A Subtle Shift in the Phoenix, Arizona Housing Market: What This Week’s CMI Data Reveals

A Subtle Shift in the Phoenix, Arizona Housing Market: What This Week’s CMI Data Reveals

For Buyers

March was an eventful month as rates spiked from 5.99% to 6.64% per Mortgage News Daily. The spike was a direct response to uncertainty over the Iran war and its effect on U.S. inflation. Once the unemployment report was released, showing an improvement from 4.4% to 4.3%, rates began drifting back down. By the time the CPI inflation was released at 3.3%, up from 2.4%, it had already been priced into the rates, so there was little effect. As of mid-April, rates were back to 6.3% and trending down.

The rate disruption led to a decline in buyer contract activity; in March, they were up 10%, and in April, they were up just 1%. Contracts could begin to return as rates fall below 6.25%. The lesson buyers have learned over the past 3 years of volatile mortgage rates is patience. Rates have a recent history of knee-jerk spikes in times of unexpected uncertainty (e.g., tariffs, trade through the Strait of Hormuz), followed by declines after the shock wears off.

The increase in supply seen in January and February stalled in March and has stalled again in April. In February, supply was up 9% over last year. In March, supply was only up 4.8%, and in April, it is barely up 0.2% thus far. With both contract and listing activity stalled, they have canceled each other out, thus maintaining the status quo for home prices.

While the conflict with Iran is not settled, the markets are responding as if they expect it to be a short-term influence on inflation. If that proves to be true, then there will be little impact on home values as they typically take 3-6 months to respond to a prolonged disturbance in the force. Since September 2022, the median mortgage rate is 6.89%. This puts the current 6.3% mortgage rate well below the 3.5% average over the last 3.5 years.

For Sellers

Sellers have the least advantage in the condominium market under $300K, as supply is up 20% over last year and contracts in escrow are up only 13%. April sold prices are down 9.5% from last year in this segment, with the median size at 1,048 sq ft. Historically, prices for this segment are similar to where they were 5 years ago, around May 2021. Conversely, single-family homes between 1,200 and 2,400 sq ft have shown the most stability in prices over the past 3 years, with minimal fluctuation.

The median-sized single-family home sold in Greater Phoenix this year is 2,003 sq ft, which is 318 sq ft larger than the 2001 median of 1,685 sq ft. Typical home sizes vary by city, as reflected in their median sale prices. For example, the 2026 median-sized home sold in the city of Phoenix is 1,798 sqft, and the median price is $482K. Compare that to newer cities like Chandler, where the median size is 2,061 sq ft at $558K, and Queen Creek, with a median size of 2,659 sq ft at $688K. Below are the median sales prices by year for the following single-family size ranges in Greater Phoenix. They show that while the Valley has endured a buyer’s market since November 2024, price trends are within 1% of last year’s prices for the majority of common-sized homes:

---

Market in a Minute

Housing

• Buyer momentum is gradually building — 7 cities are now trending in favor of buyers as rates settle in the low 6% range (≈6.2%–6.4%) after recent volatility

• Seller advantage continues to soften — Inventory is slowly rising while demand remains muted, creating more balanced conditions in parts of the market

• Higher rates are keeping the market measured — With inflation around ~3.3%, borrowing costs remain elevated, leading to steady but cautious buyer activity

Economy

• Rates eased, but volatility remains — Mortgage rates are holding in the low 6% range, with fluctuations driven by global and economic uncertainty

• Inflation proving sticky — Rising energy costs continue to put pressure on inflation, which may delay potential Fed rate cuts

• Consumer confidence trending lower — Ongoing cost pressures are impacting sentiment, which could slow overall economic activity

---

---

I truly appreciate you being here and staying informed. Whether you’re thinking about a move, buying or selling, or planning a relocation to or from Arizona, don’t hesitate to reach out—I’m always happy to help–Brad 602-679-1025 brad@homeselleraz.com