Buyers Slowly Regaining Leverage Across Phoenix, Arizona

Buyers Slowly Regaining Leverage Across Phoenix, Arizona The Greater Phoenix housing market continues to show subtle shifts as we move deeper into the spring market, with buyers beginning to gain a little more leverage in several areas across the Valley.

This week, the number of cities moving in a direction favorable to buyers increased to 9 — up from 6 last week — while 8 cities moved in favor of sellers, and 1 city remained unchanged. While the changes are still relatively modest overall, the data suggests the market is gradually becoming a bit more balanced after several weeks of stability.

The overall single-family detached market has shifted very slightly in favor of buyers over the last month. Queen Creek and Paradise Valley led the strongest moves toward buyers, while Surprise and Maricopa posted the largest percentage shifts in favor of sellers.

One of the more notable indicators this week was the movement in the Cromford Market Index (CMI)*. The average CMI declined by 0.3%, a noticeable change from the 1.6% increase we saw last week. While not a dramatic swing, the softer CMI trend suggests sellers are losing a small amount of leverage as inventory levels continue to improve and buyers become more selective.

Currently:

9 cities remain in seller’s markets

3 cities are considered balanced

6 cities are in buyer’s markets

Even with these shifts, the market remains relatively calm and stable compared to the volatility we continue to see in the broader economy and financial markets. Mortgage rates remain elevated compared to the ultra-low rates buyers became accustomed to several years ago, but steady inventory growth is helping improve buyers' opportunities in many areas.

For sellers, pricing strategy and presentation remain critical. Well-prepared homes in desirable locations are still attracting strong interest, especially when priced appropriately for today’s market conditions. Buyers, however, are taking more time, negotiating more carefully, and paying close attention to overall value.

For buyers, this continues to create opportunities that were difficult to find over the past few years. While competition still exists in certain price points and communities, there is gradually more room for negotiation, inspection considerations, and seller concessions in portions of the market.

Overall, the Greater Phoenix market remains remarkably balanced and healthy, with small week-to-week movements rather than dramatic swings. As we head toward summer, all eyes will remain on inventory levels, buyer demand, and mortgage rate movements to see whether this gradual shift toward buyers continues.

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Markets on Edge: Oil, Inflation & Mortgage Rates Continue to Shape Housing Trends

Oil prices, inflation fears, and mortgage rates are likely to remain elevated until the US/Iran conflict ends. But even today, mortgage rates are nearly a half-point lower than they were at the same time last year, and many markets are significantly more buyer-friendly.

Rising Oil Prices Push Inflation Higher.

Headline Personal Consumption Expenditures (PCE) rose 0.7% in March, driven largely by a surge in gas prices tied to Middle East tensions, lifting the annual rate to 3.5%. The Fed’s preferred inflation measure, core PCE (which excludes food and energy), increased at a more moderate 0.3%, with the annual rate at 3.2%.

Inflation is still running above target, reinforcing the Fed’s cautious approach. It also helps explain why some policymakers are in no rush to cut rates as they weigh mixed signals across the economy.

ADP: Modest job growth in April. ADP’s monthly employment report showed that private employers added 109K jobs in April. That was roughly in line with Wall Street estimates, but was lower than the 150K-160K implied by ADP’s own weekly “NER Pulse” data.

The majority of the job growth came from the Education/Health Services sector (+61K). Looking at the size of companies hiring, the majority came from Small Establishments (+65K). Annual wage growth for “Job Stayers” slowed slightly to 4.4%. Annual wage growth for “Job Changers” was steady at 6.6%.

“Because small firms are driving the overall job growth, the types of jobs we’re seeing are actually not full-time jobs. Small firm jobs growth comes with more part-time jobs, lower-paid jobs, and people are working less [hours] in these new jobs…so we’re replacing jobs lost, but we’re replacing them with lower-paid, fewer-hours jobs.” — Nela Richardson, ADP’s Chief Economist, speaking on CNBC

Bond and Mortgage Market

The bond market is watching the Middle East and oil prices, not domestic jobs data or real estate transaction volumes. If it looks like the US/Iran war could be coming to an end, bond prices rally (which mathematically lowers yields) because of lower expected inflation. In any case, the market is still not pricing in any rate cuts for the remainder of 2026 — even with the new guy (Kevin Warsh) in charge.

Note: The Fed Funds Rate policy range is currently 3.50–3.75%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market.

• June 17 FOMC Meeting: This will be Kevin Warsh’s first meeting as the new Fed Chairman. 94% probability that the Fed Funds Rate will be kept at 3.50–3.75% (was 95% last week). That leaves only a 6% chance that rates will be 25 basis points lower than current levels.

• July 29 FOMC Meeting: 88% probability that the Fed Funds Rate will be kept at 3.50–3.75% (was 89% last week). A 12% probability that rates will be 25 basis points lower than current (implying a rate cut at either the June 17 or July 29 meetings, but not at both).

• No rate cut in 2026? If I look way out to the last FOMC meeting of the year (Dec 9), the market is pricing in a 72% probability (was 80% last week) that the Fed Funds Rate will be exactly where it is today. In other words, the market continues to price in NO rate cuts for the remainder of 2026.
  

  
  

  

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Weather

☀️ Triple-digit temperatures are here! Apache Junction is heating up this week with highs topping 100° before settling into the upper 90s.

No matter the temps, it’s always a great week to live in Arizona. 🌵

#RelocateToAZ #CallBradToSellYourPad #ApacheJunctionAZ #ArizonaWeather #LivingInArizona #ArizonaRealEstate