Holiday Cheer Comes to the Phoenix, Arizona Housing Market

Holiday Cheer Comes to the Phoenix, Arizona Housing Market, with one exception. The Cromford® Market Index (CMI)* increased in 17 of 18 cities, and 12 of those markets rose by more than 10%.

Two key factors drive this shift: inventory declined more than typical for the November-December period, and buyer demand has regained some momentum—though it remains below long-term norms.

Sellers in Paradise Valley have little to worry about. After an exceptionally strong run over the past two years, the market is settling into a more balanced rhythm and remains firmly in seller's market territory.

Peoria and Gilbert posted the most substantial gains this past month, with Queen Creek, Tempe, Glendale, and Goodyear close behind. The broader Phoenix market also saw a notable 14% increase, a significant development given that Phoenix accounts for roughly 25% of total market activity.

Overall, the average CMI increase over the past month is +10.8%, up slightly from +10.1% last week. Currently, 10 cities are in seller’s markets, two are balanced, and six remain buyer-favored.

*Cromford Market Index™ is a value that provides a short-term forecast for the balance of the market. It is derived from the trends in pending, active, and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

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Mortgage Rates Hover Near Yearly Lows Heading Into Year-End

It was a quiet holiday-shortened week.  Mortgage rates aren’t making flashy moves right now — and that’s not a bad thing. Stability, gradual improvement, and more explicit forward guidance are helping restore confidence across the housing market. Let’s take a look.

Mortgage Rates Dip Slightly as the Year Winds Down

Over the past week, mortgage rates edged modestly lower, continuing a slow but meaningful trend we’ve seen toward the end of the year. According to national surveys, the average 30-year fixed rate is now hovering around 6%, down slightly from earlier in the month.

No single headline drove this move. Instead, it reflects calmer bond markets, lighter holiday trading volume, and steady demand for mortgage-backed securities. While the improvement may feel incremental, it matters—especially for buyers and sellers who are closely watching affordability.

Holiday Market Calm: Why Rates May Stay Flat Short-Term

As we move through the holiday season, financial markets naturally quiet down. Fewer economic reports, lower trading volume, and end-of-year positioning often result in smaller day-to-day swings in rates.

That’s precisely what we’re seeing now. Most analysts expect mortgage rates to trade within a reasonably tight range through year-end unless a surprise economic headline emerges. For buyers, this environment can be helpful — it enables more thoughtful decision-making rather than reacting to sharp volatility.

30-Year Fixed Rates Near Their Lows for the Year

One of the more encouraging developments is that mortgage rates are now sitting near their lowest levels of the year. While they’re not back to pre-2022 levels, the improvement from recent highs has meaningfully reduced monthly payments compared to earlier this year.

This matters because housing decisions are rarely made on headlines alone — they’re made on payment comfort. For many buyers, today’s rates are starting to feel workable again, especially when combined with seller concessions, buydowns, or creative structuring.

Fed Expectations Still Influence Rates — Even Without Action

Even though the Federal Reserve hasn’t made a new policy move this week, expectations around future Fed decisions continue to shape mortgage rates. Bond markets are constantly looking ahead, pricing in what they believe the Fed will do — not just what it’s done already.

As we look into early 2026, markets are closely watching inflation and employment data for clues about when rate cuts might occur. That forward-looking mindset is one reason mortgage rates can move even during quiet weeks.

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Markets in a minute

Housing

• Greater Phoenix pricing surprised to the upside in December. Sales price per square foot jumped 4.3% month-over-month to $307, with median and average prices rising sharply — driven by falling supply and a modest rebound in demand.

• Market balance is shifting city by city. While the overall market still leans buyer-favored, supply is dropping, demand is up year over year, and more cities are moving into balanced or seller markets—especially Peoria, Gilbert, Phoenix, and parts of the East Valley.

• National sales activity is showing tentative improvement, with existing-home sales edging higher and inventory slowly firming, even as affordability remains a concern. November saw a modest rise in existing-home sales month-over-month — the third consecutive increase — suggesting easing mortgage rates are drawing some buyers back into the market, while inventory, though still constrained, remains above year-ago levels and helps moderate pricing pressure.

Economy

• Mortgage rates have stabilized in the low-6% range, supported by calmer bond markets and lighter holiday trading. This stability — even without significant Fed action — is helping restore confidence and reduce volatility-driven hesitation.

• The Federal Reserve remains “on pause,” but expectations matter more than action. Bond markets are forward-looking, pricing in potential 2026 rate cuts based on inflation and employment trends that continue to influence mortgage rates.

• Economic data point to slower but healthier growth, with easing inflation pressures and a cooling labor market—conditions that typically support lower or stable interest rates over time.

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As we wrap up 2025, I want to extend my sincere thanks to every client, referral partner, friend, and family member who trusted me this year. Your support, conversations, and referrals mean more than you know. I’m incredibly grateful for the relationships built and the opportunities to help so many people navigate one of life’s most significant decisions.

I’m looking ahead to 2026 with excitement and optimism, and I genuinely look forward to continuing to serve you, your family, and anyone you know who may be considering a move. Thank you for a fantastic year—and here’s to what’s ahead. -- Brad Daniels