Buying in 2026: Where Opportunity Is Opening in Phoenix Arizona

Buying in 2026: Where Opportunity Is Opening in Phoenix, Arizona

Buyers: Buying season has begun in Greater Phoenix, and it’s kicking off with a wave of fresh new listings. In a typical year, January is the most popular month for luxury and retirement community listings to hit the market, while March tends to be the peak month for the mainstream. Within the first 3-4 weeks of the year, these new listings are met with buyer demand that escalates dramatically in January, then tapers off before peaking in April or May.

New listings are coming in weaker than this time last year, but only down 2.5%. That’s still stronger than the 5-year period from 2020-2024, which had the lowest January listings counts in 25 years. Listings under $300K are seeing a significant increase in new supply, up 15% over last year, and with nearly 3,800 active listings at this writing, comprising 18% of supply. This is the most affordable range in Greater Phoenix, where sales prices are down 2-3% from last year and are continuing to decline. It comprises mostly condos and mobile homes in central cities such as Phoenix and Mesa, and mostly single-family homes in the outskirts, like Pinal County. All other new listing counts are in line with last year or weaker, which is contributing to a more balanced state between supply and demand as we begin 2026.

A $300K purchase with FHA is approximately $1,860/month before taxes and possible HOA. Mortgage payments on properties under $300K can compete with rent, but not necessarily when tenants are upgrading their living space. For instance, a tenant paying $2,100 in rent for an apartment in Scottsdale cannot afford to upgrade to a single-family home in the same area for the same monthly payment. However, they may be able to purchase a similar unit in the same area, or a single-family home in an outer city like Maricopa, and commute.

This is where the affordable housing debate can get messy. Listing counts indicate that the supply of affordable homes under $300K is rising, and sales of those units are also rising (up 7%), suggesting that affordability strains are easing. However, 2025 sales over $500K were also up 7% while sales within $300K-$500K were nearly identical. If there were truly a lack of affordable homes, then supply under $300K would be rapidly declining, as it did from 2020 to 2022, where there were fewer than 500 for sale, and prices would be rising. But that’s not happening. Evidence suggests that it’s not a lack of affordable homes to purchase, but an aversion to moving out of a desirable area.

Sellers:

2025 ended with total annual sales up 3.5%, equivalent to 2,351 more sales through the MLS than in 2024. Local builder reports show new home sales down nearly 6% for the year, and 2025 permits for new construction were down a significant 21%. Nationally, builder optimism about future sales is low, reportedly due to labor and lot shortages. However, some cities with high builder activity saw the largest sales increases in 2025.

By number of sales per the Maricopa County Recorder’s Office, the following cities saw the biggest jumps in closed sales last year: 1) Goodyear with 414 more sales, up 16%, median price $486K; 2) Scottsdale with 335 more sales, up 5%, median price $900K; 3) Peoria with 245 more sales, up 7%, median price $515K.

By percentage growth of sales, the following mid-sized cities saw the biggest proportional increases: 1) Waddell up 36% with 178 more sales, median price $468K; 2) Sun Lakes up 32% with 122 more sales, median price $470K; 3) Anthem up 29% with 64 more sales, median price $574K.

The 2025 annual median sales price in Greater Phoenix is $451K, but it’s worth noting that half of the cities with sales growth had median prices considerably higher than that. Considering that most of 2025 operated with mortgage rates in the high-6% or low-7% range, entering 2026 with rates in the high-5% and low-6% means payments are at least 10-12% lower on the same-priced homes from a year ago. This bodes well for first-quarter sales in Greater Phoenix in 2026.

While sales are expected to increase, prices are not. Price is the last measure to move when a market shifts, and it can take up to 3-6 months to emerge. Price appreciation remains stagnant in the middle price ranges, rising in upper ranges, and declining under $400K. Greater Phoenix is pulling out of a buyer’s market and edging towards a balanced state, but a seller’s market isn’t on the horizon.

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Mortgage Markets at a Crossroads:

Inflation, Fed Policy, and Spring Outlook

December and January are two of the slowest months of the year for home sales. But the spring selling season is around the corner (things really start perking up in March), and if mortgage rates can stay in the low 6% range, activity levels should surge.  Let’s take a look at what happened this past week.

Trump talked about housing affordability in Davos. An ultra-exclusive conference of billionaires, politicians, NGOs, and celebrities seemed an odd place for President Trump to discuss his plans to reinvigorate the American Dream of homeownership. Or perhaps it’s brilliant, since there was no shortage of big-bank and big-investor CEOs in Switzerland, and President Trump wants more/cheaper lending for would-be buyers and to keep BlackRock from buying every home on your block.

Here’s the thing: he’s not actually banning BlackRock from buying homes; he’s just limiting the ability of big institutions to get access to conventional lending. Essentially, Fannie Mae and Freddie Mac have been told to stop guaranteeing mortgages for SFH purchases made by large institutional investors. But…BlackRock can still buy SFHs with all cash, and the definition of a large institutional investor has yet to be set.

Here’s what the President actually said:

“Homes are built for people, not for corporations, and America will not become a nation of renters. That’s why I have signed an executive order banning large institutional investors from buying single-family homes. It’s just not fair to the public. They’re not — they’re not able to buy a house.”

“The house values have gone up tremendously, and [homeowners] have become wealthy…every time you make it more and more and more affordable for somebody to buy a house cheaply, you’re actually hurting the value of those houses, obviously…I don’t want to do anything that would hurt the value of people's homes. [People] who for the first time in their lives are walking around…very proud that their house is worth $500K, $600K, $700K. Now, if I wanted to really crush the housing market, I could do that so fast, and people could buy houses, but you would destroy a lot of people who already have houses.”

Consumer Inflation in Line with Forecasts

 Consumer prices rose 0.3% in December and 2.7% year over year, with the annual rate unchanged from the prior report. Core inflation, which excludes food and energy, increased 0.2% for the month and held steady at 2.6% annually – its lowest level since early 2021. These readings were mostly in line with analysts’ expectations.

Shelter costs remain a major driver of inflation, accounting for roughly 35% of headline CPI and 44% of core CPI. Given this heavy weighting, even modest changes can meaningfully affect overall inflation. Shelter prices edged higher in December, contributing to the monthly increase.

It’s going to be tough for us to make much progress on inflation over the next couple of months. But the market seems to know that already, with very little hope of a Fed rate cut at the next two FOMC meetings.

Bond and Mortgage Market

With inflation (PCE) remaining above the Fed’s 2% target, the unemployment rate still looking (superficially) low, and GDP running at >4% annually, there is almost zero chance that the Fed votes to cut rates at either the January 28 or March 18 FOMC meetings.

What could change that? One thing could be the BLS’s reworking of the job growth statistics using a new and improved birth/death model. This should result in much lower preliminary job numbers (that require fewer revisions), allowing the markets to react to the ‘real’ monthly jobs growth, rather than ‘imaginary’ jobs growth.

Note: After the rate cut on Dec 10, the Fed Funds Rate policy range is now 3.50–3.75%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market.

• January 28 FOMC Meeting: 95% probability that the Fed does nothing (unchanged from last week); only a 5% probability of a 25 bps rate cut.

• March 18 FOMC Meeting: 82% probability that the Fed Funds Rate target range is kept at 3.50–3.75% (was 78% a week ago). In other words, no cut at either the January or March FOMC meetings. Only an 18% probability that rates are 25 bps below current (was 22% last week), which would imply a 25 bps rate cut at the March 18 meeting.

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Weather

Thank you for reading my blog — I truly appreciate it.

If you’re considering relocating to or from Arizona, I’d love the opportunity to help. Every move is unique, and I’m always happy to answer questions, share insights, or help you plan your next step. Brad Daniels | 602-679-1025| RelocateToAz.com