Seller Momentum Softens as More Cities in the Phoenix Area Tip Toward Buyers.
- Brad Daniels
- Jan 19
- 4 min read
Seller Momentum Softens as More Cities in the Phoenix Area Tip Toward Buyers, and that has doubled since last week. Fountain Hills and Cave Creek have now joined Avondale and Paradise Valley, leaving 14 cities still trending in favor of sellers. Sellers can take some comfort in the fact that all four cities shifting toward buyers are relatively small markets. Brad Daniels, Realtor. My Home Group
The average Cromford Market Index (CMI)* is currently up 5.8% month over month, which is positive, though notably weaker than the 8.1% increase reported last week. While the overall trend still favors sellers, momentum has softened over the past 21 days and is beginning to look a bit wobbly.
The largest seller-side gains were seen in Phoenix, Glendale, Mesa, Gilbert, Peoria, and Surprise.
At the market-balance level, we continue to see:
10 cities in a seller’s market
2 balanced
6 in a buyer’s market
This breakdown is unchanged from last week; however, Peoria moved from balanced into a seller’s market, while Paradise Valley shifted from a seller’s market to balanced.
Cromford Market Index™ is a value that provides a short-term forecast of the market balance. 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.
Lower Rates, Softer Inflation, and a Steady Fed:
What the Numbers Are Saying
There were many encouraging signs for the housing market this week: lower mortgage rates are boosting demand for new and existing homes, December CPI (inflation) came in lower than expected, and President Trump unveiled several plans to improve affordability.
Mortgage rates remained in the low 6% range. Average 30-year mortgage rates have been below 6.25% for a month, and below 6.50% for nearly 5 months. That’s giving would-be buyers the time they need to locate, inspect, and negotiate on their next home. [Freddie Mac]
December “core” CPI came in lower than expected. “Core” CPI (inflation) rose +0.2% MoM and +2.6% YoY in December 2025 (lower than the +2.7% YoY expected). [BLS]
Bond and Mortgage Market
After President Trump instructed the GSEs (Fannie and Freddie) to buy (over time) up to $200B in Mortgage Backed Securities, average 30-year mortgage rates have moved into the (very) low 6% range. Despite this, market expectations are that the Fed will NOT cut rates at either of the next two meetings.
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 (was 88% last week); only a 5% probability of a 25 bps rate cut.
March 18 FOMC Meeting: 78% probability that the Fed Funds Rate target range is kept at 3.50–3.75% (was 59% a week ago). In other words, no cut at either the January or March FOMC meetings. Only a 22% probability that rates are 25 bps below current (was 41% last week), which would imply a 25 bps rate cut at the March 18 meeting.
Just a friendly reminder 😉
Many people still think you need a 20% down payment to buy a home, but that’s not true - especially for first-time buyers. In 2025, the median down payment for first-time buyers was just 10%, and there are programs that let you put down as little as 0% to 3%. If you would like to review your down payment options and how they relate to your monthly payment, please don’t hesitate to reach out.
Market in a Minute
Housing
Pricing cooled in early January after an unsustainable December bump. Average sales price per square foot fell 2.2% month over month to $300.60, largely driven by a shift toward more lower-priced homes closing, rather than broad price weakness across the market.
Short-term softness is possible, but pricing remains relatively stable. Pending prices are slightly lower than last month, suggesting modest near-term pressure, while distress levels have increased from December but remain historically low compared to long-term averages.
Demand is improving as rates stabilize, setting the tone for the first half of the year. With mortgage rates around 6.04%, buyer activity is up versus last year, supply is rising seasonally, and the market continues to lean slightly toward buyers—though many areas are moving back toward balance or seller conditions.
Economy
Inflation is cooling: December core CPI rose 0.2% MoM and 2.6% YoY, coming in below expectations and reinforcing the disinflation trend.
The Fed remains on pause: Markets now see a 95% probability the Fed holds rates steady at the January meeting, signaling confidence that inflation is moving in the right direction.
Rate-cut expectations are dialing back: Odds of a March rate cut have dropped sharply, suggesting policymakers are prioritizing stability over moving too quickly.
☀️ This week's 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
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