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Income Growth, Affordability, And A Shifting Market in Phoenix, Arizona. For Buyers Journalists covering housing affordability frequently quote sources citing median household income. Household income can be broken down into two categories, family and non-family households. The US Census defines a family household as two or more people living in a home and related by blood or marriage. Non-family households include all others, such as unrelated people living together or alone. Non-family household income is typically much lower than family income and is more suited for measuring the affordability of rental housing. Family household income is better suited to measuring the affordability of home ownership.   From 2020 to 2024, the median annual household income in Maricopa County rose 33% from $68K to $91K. The non-family median household income rose from $44.5K to $59K. Family income rose from $80K to $108K; and married family income, a subset of family income, rose from $95K to $126K.   The lending industry considers 28% of gross income an affordable monthly payment for mortgage or rent. For a family household, that’s roughly a $2,500-$3,000 payment. At a mortgage rate holding steady around 6.25%, that payment supports homes priced between $350,000 and $500,000 in Maricopa County. That budget will help a roughly 1,500-1,800-square-foot single-family home, priced in the mid-$300s in the West Valley and the mid-$400s in the Southeast Valley.   Incomes in Maricopa County have not been stagnant and have risen significantly since 2020. It’s home values that have been stagnant for 3 years, waiting for family incomes to catch up and mortgage rates to decline. Inventory under $500K accounts for roughly 57% of all inventory for sale and is up 16% from last year. With rates holding steady in the low 6% range over the past 4 months, demand and optimism are up at the start of 2026.   For Sellers November closings were another success in Q4 2025, up 3.3% from last November, and it was even better than that. Last November had 19 closing days, compared to this November's 18, meaning this year November closed an extra 23 sales per day, bringing the improvement to 9% instead of 3%. So far, December is also outpacing last year by an average of 14 closings per day. If this is a preview of what 2026 may bring, sellers should be optimistic about contract activity in January.   The key question is how many listings will align with January’s expected increase in demand. January is typically the top month for luxury, retirement, and seasonal community listings to hit the market. However, new listings across all price points and areas often see a peak in March, providing ample selection for Spring buyers. This front-loading of inventory in the first part of the year usually results in more price reductions, the number of which depends on whether we enter the year in a buyer’s market, a balanced market, or a seller’s market.   Recent improvements in demand, combined with declines in supply, are pushing the Cromford Market Index back toward a balanced state. While Greater Phoenix remains overall in a buyer’s market, central and established cities are the first to move back into seller’s markets. Most recently, Phoenix, Mesa, and Tempe shifted back into seller’s markets within the last 30 days, putting nearly all cities in the Northeast and Southeast Valley in seller’s markets, except buyer’s markets Queen Creek and Sun Lakes. Developing cities on the edges of Metro Phoenix are typically the last ones to pull out of a buyer’s market. Pinal County cities, for example, are buyer’s markets except for Apache Junction, which is a seller’s market. The West Valley is a mix, as El Mirage is a small seller’s market, and Peoria recently shifted into a balanced market, joining Glendale, Avondale, and Laveen. All other West Valley cities are buyer’s markets.   Don’t expect much upward pressure on price in the short term, even if your city has shifted back into a seller’s market. Prices can take up to 6 months to respond to a shift, which means the seller’s market must be maintained, and many of these cities are still relatively weak. What sellers can expect is more showings, shorter days on market, and less pressure to reduce their prices once the Spring buying season begins. When the Data Speaks: A Cooling Economy Puts the Fed Under Pressure Jerome Powell often says that the Fed is “data dependent.” The latest data clearly showed both a slowing job market and easing inflation. The December Fed rate cut now looks well-justified, but the market remains skeptical that the Fed will cut again on January 28.   BLS jobs report = weakness all around   We received data for both October and November, which painted a clear picture of a slowing job market.   Jobs growth of just 64K in November, but that was after -108K (affected by the government shutdown) in October. In addition, previously released figures were revised down by 59K. The narrow unemployment rate (U-3) rose from 4.4% in September to 4.6% in November (we didn’t get the October number). The broader unemployment rate (U-6) rose from 8.0% in September to 8.7% in November. Ignoring COVID, that’s the highest since March 2017. The number of permanent (full-time) jobs fell by 983K between September and November, while part-time jobs rose by 1.0M. We’re replacing full-time jobs with part-time roles. Not a good trend. And remember: Fed Chair Jerome Powell estimated these numbers were likely overstated by ~60,000/month due to the birth/death model and other factors. If he’s right, that would take October to -168K and November to +4K (essentially flat).   The two Fed members who dissented at the last meeting (preferring to keep the Fed Funds Rate unchanged) have to review this report and think, ‘maybe I’m missing something’. The U-3 has risen from a low of 3.4% in April 2023 to 4.6% in November 2025, and the U-6 has increased from a low of 6.6% in April 2023 to 8.7% in November 2025.   Lowest “core” CPI in years   We also received October and November inflation data, which were much lower than expected. Both “headline” and “core” CPI (Consumer Price Index = inflation for you and me) climbed just +0.2% over the last two months, allowing the annual inflation rate for “headline” CPI to fall to +2.7% YoY and “core” CPI to drop to 2.6% YoY. That’s the slowest rate of “core” CPI growth since April 2021!  Shelter costs (which make up 35% of “headline” and 44% of “core” CPI rose just 0.2% over the last two months. As a result, annual Shelter cost growth plunged to just +3.0%!   If you annualize the last 3 months of CPI growth, you get 2.0% YoY for “headline” and 1.7% YoY for “core”. When you consider that the Fed’s preferred measure of inflation (“core” PCE) is generally LOWER than the CPI (due to category weighting differences), this means that we’re running at/below the Fed’s 2% target.   Crude oil prices are down 22% this year.  What does this have to do with housing? Directly, not much. But it can have a significant impact on “headline” inflation figures (6.5% weighting in “headline” CPI), and that can obviously affect the Fed’s policy decision. Bond and Mortgage Market   If you were a Fed member looking for justification to cut rates further, this was your week. A big jump in the unemployment rate, plus a significant drop in the rate of inflation? Yes, please! Unfortunately, the global rise in bond yields appears to be keeping the 10-year US Treasury yield higher than it would otherwise be. Still, average 30-yr mortgage rates (from Freddie Mac’s PMMS survey) remained below 6.25%, and the start of the spring selling season isn’t far away.   Note:  After the rate cut on Dec 10, the Fed Funds Rate policy range is now 3.50–3.75%. The probabilities below are sourced from the CME Group website and are implied by the Fed Funds Rate futures market. January 28 FOMC Meeting:  73% probability that the Fed does nothing; only a 27% probability of a 25 bps rate cut. March 18 FOMC Meeting:  47% probability that rates are 25 bps below current. That means a rate cut at either the January 28 or the March 18 meeting, but not at both. 43% probability that the Fed Funds Rate target range is kept at 3.50–3.75%. In other words, no cut at either the January or March FOMC meetings. They Said It In positive signs for the market, builders report that future sales expectations have been above the key breakeven level of 50 for the past three months, and the recent easing of monetary policy should help builder loan conditions at the start of 2026. However, builders continue to face supply-side headwinds, as regulatory costs and material prices remain stubbornly high. Rising inventory also has increased competition for newly built homes.” — Robert Dietz, NAHB’s Chief Economist. Market in a Minute Housing Seller momentum is building: Demand is rising while supply continues to fall, pushing the Cromford Market Index up an average of +10.1% over the last month, with seller conditions improving in most cities — including Phoenix, Scottsdale, Mesa, Peoria, Gilbert, Chandler, and Goodyear. Single-family homes are leading the recovery: Sales activity for detached homes and mobile homes is strong and nearing record levels, while condos and townhomes continue to lag, reflecting tighter financing, higher HOA and insurance costs, and shifting buyer preferences toward space and privacy. Markets are rebalancing unevenly: 9 of the 18 largest Valley cities are now seller’s markets, three are balanced, and only 6 remain buyer-leaning — a notable improvement from just a month ago, even though attached housing remains a slower segment. Economy Jobs are slowing: Payroll growth weakened sharply, unemployment rose (U-3 at 4.6%, U-6 at 8.7%), and full-time jobs declined while part-time jobs increased — clear signs the labor market is cooling. Inflation is easing: Core inflation is at its slowest pace since 2021, shelter costs are rising more slowly, and recent CPI trends are running at or below the Fed’s 2% target. Rates likely hold short-term: December’s rate cut looks justified, but markets expect the Fed to pause in January, with mortgage rates holding near the low-6% range heading into spring.  Have a great week!

Momentum Builds for Sellers as Demand Strengthens Across Greater Phoenix Once again, the trend over the past week has been strongly favorable to sellers across Greater Phoenix. Demand continues to improve while supply is declining, creating a clear shift in market momentum. For the second week in a row, green circles outnumber red circles by a wide margin—15 to 3. The average change in the Cromford® Market Index (CMI)* over the past month is now +8.6%, up notably from +6.4% last week, reinforcing the strengthening seller-side trend.   Where Sellers Are Gaining Ground The cities leading the move in favor of sellers include Peoria, Queen Creek, Fountain Hills, Tempe, Chandler, Gilbert, and Maricopa. These markets are seeing improving demand relative to supply, a dynamic that is helping sellers regain leverage after a softer stretch earlier in the year. On the flip side, Paradise Valley remains the leading city improving for buyers, with its CMI down 4% over the last month. However, this decline is far less dramatic than the 11% drop seen last week, and the market there appears to have largely stabilized with minimal change over the past three weeks. The other two buyer-favoring cities—Avondale and Surprise—declined by 2% or less, suggesting only mild buyer-side advantage.   Big Cities vs. Secondary Markets Among the 18 largest cities, we now have: 9 seller’s markets (including the three largest: Phoenix, Scottsdale, and Mesa) 3 balanced markets 6 buyer’s markets   This places exactly half of the major cities in seller-favoring territory—a notable shift from earlier in the year.   Conditions are less robust in the secondary cities, where we currently see: 3 seller’s markets 1 balanced market 8 buyer’s markets   As always, these smaller markets tend to be more volatile, and changes can happen quickly with just a handful of additional transactions.   Addressing the “Investor Doom” Narrative On December 10, it was time to revisit another claim of impending market trouble—specifically, the idea that investors are “giving up” and flooding the market with unwanted supply.   At least in Greater Phoenix, the data does not support this view. Investor purchases have actually been rising modestly, with investors accounting for 13.8% of all transactions as of October. That’s the highest share since 2023 and slightly above the range seen between 2014 and 2020. While investor activity surged during COVID (peaking around 19–21%), it settled back into the 13–14% range after mid-2022, and has stayed there ever since. In short, investors have not exited the market. If anything, they’re buying slightly more, not less.   What About iBuyers? One notable change is the dramatic pullback by iBuyers such as Opendoor and Offerpad. In October, they accounted for just 0.3% of transactions, down from a peak of 5.7% in 2021. Their current market share is negligible, and there is no evidence that they are flooding the market with listings. Given their unique business model, they’re best viewed separately from traditional investors.   Rentals Aren’t Flooding the Market Either There’s also little indication that former rentals are being listed for sale in unusually high numbers. While we saw an uptick in former short-term rentals entering the market earlier in 2024, that trend has since faded. In fact, the holiday rental market has shown improvement in the second half of 2025, with year-over-year gains in both occupancy and revenue per night. Long-term rentals, meanwhile, remain largely stable.   The Bottom Line If the market were truly flooded with unwanted inventory, we would see it reflected in the data—and the balance would shift toward buyers. Instead, we’re seeing the opposite. Market conditions are steadily moving in favor of sellers, even though we remain well short of an overheated environment.   As we head into January, a new seasonal trend may emerge, but it’s unlikely to have anything to do with investors exiting the market. For now, the data continues to indicate gradually strengthening seller conditions across much of Greater Phoenix. *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. Fed Turns More Dovish as Rates, Inflation, and Jobs Re-Align The Fed cut short-term interest rates for the 3rd time in 2025, admitted that the BLS jobs numbers were probably “overstated,” and announced the resumption of short-term asset purchases — all good news for bond yields (and by extension, mortgage rates).   “Core” PCE moved lower in September. This really was the big one. If we could get a ‘tame’ PCE report, the path would be relatively straightforward for the Fed to cut rates. While “headline” annual PCE did climb to +2.8% YoY in September (from +2.7% in August), “core” PCE [the Fed’s preferred inflation gauge] moved in the opposite direction (+2.9% YoY → +2.8% YoY).   Importantly, “shelter” costs (rent + owner’s equivalent rent) rose just 0.15% month-over-month (or +3.7% YoY).   Job openings JOLTed the market. We received the September (7,658,000 job openings) and October (7,670,000) data simultaneously. Because the September increase (+431,000) was the largest we’ve seen in years, it initially shocked the market—could it derail the Fed rate cut? But the Hires Rate (3.2%) was tied for a decade low, and the Quits Rate (1.8%) was the lowest seen since May 2020.   Actual jobs are more important than job openings, and the Hires & Quits rates still suggest a very cautious labor market — where employers are reluctant to hire OR fire, and employees lack the confidence (or monetary incentives) to jump ship.   Fed cut rates for the 3rd time in 2025. Three voters dissented (two wanted no cut, one wanted -50 bps). Overall, Fed members concluded that the downside risks to employment outweighed the upside risks to inflation. The new target range for the Federal Funds Rate is 3.50%-3.75%, which is 175 basis points (1.75%) below where the Fed Funds Rate peaked in 2024 (5.25%). Notably, the Fed also announced that it would begin buying short-term Treasuries (initial target: $40B/month) to keep bank reserve balances “ample” and keep the Fed Funds Rate within the target range. That should be positive for treasury yields and, by extension, mortgage rates.   Unless something dramatic happens in the next 45 days, the Fed will probably do nothing at the January 28 meeting. The Fed Funds Rate futures market currently assigns a 24% probability to a rate cut at that meeting. Powell admits that the BLS jobs numbers are likely “overstated”. This was quite extraordinary: the Fed Chair said he believes problems with the birth/death model likely result in the BLS jobs numbers being overstated by about 60,000/month. Since May, reported job growth has averaged 40,000 per month. Removing the overstatement would bring that to -20,000/month. Bond and Mortgage Market Fed week is always interesting.  This one was particularly volatile. We had the tame PCE report, followed by the somewhat concerning (for the bond market) JOLTs report. Expectations were building for another “hawkish cut” — where the Fed cuts rates, but then pours water on future cuts. Instead, Powell’s commentary was almost dovish!   Net result:  Yields on the 10-year UST are back near 4.1%, and average 30-year mortgage rates stand at 6.22%, according to Freddie Mac’s weekly PMMS survey.   Note:  After the rate cut on Oct 29, the Fed Funds Rate policy range is now 3.50–3.75%. The probabilities below are sourced from the CME Group website and are implied by the Fed Funds Rate futures market. January 28 FOMC Meeting: 76% probability that the Fed does nothing; only a 24% probability of a 25 bps rate cut. March 18 FOMC Meeting: 51% probability that the Fed Funds Rate target range is kept at 3.50–3.75%. In other words, no cut at either the January or March FOMC meetings. 41% probability that rates will be 25 bps below current levels, which implies a rate cut at either the January or March meetings, but not at both.   They Said It A series of quotes from Jerome Powell, Federal Reserve Chairman, after the decision to cut rates on December 10: “We think there’s an overstatement in these [BLS jobs] numbers…It’s a complicated, unusual, and difficult situation, where the labor market is also under pressure, where job creation may actually be negative.” Regarding the January 2026 FOMC meeting: “I could make a case for either side. [We’ll have to] wait and see how the economy evolves…I don’t think a rate hike [in January is anyone’s base case at this point.” Market in a Minute Housing Seller momentum strengthened again as demand improved and supply declined, with seller-favoring markets outnumbering buyer-favoring markets 15 to 3. Market conditions continued to accelerate, with the average Cromford® Market Index (CMI) change over the past month rising to +8.6%, up from +6.4% last week. Large markets tipped toward sellers, including Phoenix, Scottsdale, and Mesa, along with substantial gains in Peoria, Queen Creek, Fountain Hills, Tempe, Chandler, Gilbert, and Maricopa.  Economy The Fed cut rates by another 25 basis points, marking the third cut in 2025, lowered the Fed Funds target range to 3.50%–3.75%, and signaled greater concern about employment risks than inflation. Inflation data gave the Fed cover to ease: Core PCE (the Fed’s preferred gauge) moved lower to 2.8% YoY, while shelter costs rose just 0.15% month-over-month, reinforcing the cooling inflation narrative. Labor market weakness is more apparent beneath the surface: Chair Powell acknowledged that ~60,000 jobs per month may overstate BLS jobs data, while low hiring and quit rates point to a cautious, slowing job market.‍ Weather (It couldn't be more perfect) Thank you for reading. If you found this information useful, Brad would be happy to answer your real estate questions and help you navigate the Arizona market with confidence. (602) 679-1025 brad@homeselleraz.com #CallBradToSellYourPad

How Inflation, and Jobs Are Shaping Rates in Phoenix, Arizona This week’s data paints a slightly less favorable picture for sellers in smaller cities than in the large-city rankings. We’re seeing three cities in seller’s markets and nine leaning toward buyers. Because these secondary markets are much smaller, their numbers tend to swing more dramatically. A handful of extra closings can shift the trends quickly, so it’s wise to view these stats with a bit more caution. Apache Junction, Laveen, and Sun City continue to show strong seller momentum, while Tolleson, Sun Lakes, Sun City West, and El Mirage are currently leaning toward buyers.   Sellers in Maricopa and Buckeye—who may be frustrated with their standing in the large-city table—can take some comfort in knowing they’re still performing better than Casa Grande and Arizona City. Overall, market movement this week has been positive for sellers, driven by rising demand and a meaningful drop in supply. Green indicators are outpacing red by 13 to 5, and the average monthly change in the Cromford Market Index* (CMI) now sits at +3.6%, up from 1.3% last week.   Fountain Hills and Chandler continue to lead the way for sellers, just as they did last week. Queen Creek and Tempe are also seeing strong momentum with double-digit gains. On the other side of the spectrum, Paradise Valley shows the most improvement for buyers, with its CMI down 17% over the past month. Avondale has slipped by 7%, while the remaining buyer-leaning markets softened by 2% or less. The encouraging sign for sellers is that the three lowest-ranked cities are all turning upward in a meaningful way.   At the moment, we’re looking at seven cities in seller’s markets, four balanced, and 7 in buyer’s markets.   Looking ahead, we expect these trends to hold steady through the end of the year. Demand has strengthened in the more affordable price ranges, while recent softness in cryptocurrency and the stock market seems to be cooling activity at the high end. Notably, the two most expensive markets—Paradise Valley and Scottsdale—are tilting slightly toward buyers, though Scottsdale’s shift is a modest 1%. Fountain Hills remains an exception: despite being a higher-priced area, it continues to perform exceptionally well thanks to strong interest from out-of-state and second-home buyers. *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. Conflicting Jobs Data Undercuts Expectations for a December Rate Cut Let’s take a look at what’s moving interest rates this past week and what we have to look forward to from this past shortened holiday week.   Mortgage Spreads Are Quietly Improving — And It Matters More Than Most Think   One of the biggest stories in the mortgage market over the past few weeks has been the continued improvement in mortgage spreads — the gap between the 10-year Treasury yield and the average 30-year mortgage rate. This spread has been historically elevated for most of the past two years, adding unnecessary weight to mortgage rates even when Treasury yields were cooperating.   Recently, however, spreads have been tightening as volatility in the bond market has cooled and demand for mortgage-backed securities has strengthened. That improvement has helped pull rates notably lower, even amid mixed economic data. For borrowers, this means today’s mid-6% rates aren’t just a temporary dip — they’re partially the result of structural healing in the mortgage market itself. If spreads continue to normalize, it gives us more room for rates to drift lower without needing perfect economic data every week.   What Could Move Rates Next: Inflation, Jobs, and Fed Expectations   Even with improving spreads, the next leg of rate movement will still hinge on upcoming economic data and the Federal Reserve's response.   The bond market is highly sensitive right now. A softer inflation print or weaker jobs number could easily push Treasury yields lower and pull mortgage rates down with them. On the flip side, any indication that inflation is re-accelerating — or that the labor market is still too tight — could stall or reverse the progress we’ve made.   With several key reports on deck in the coming weeks, it’s smart for buyers to stay in close contact on timing and lock strategy. This is one of those environments where rates can move meaningfully in a short amount of time, in either direction.   Looking Ahead: Analysts Split on Where Rates Go in 2026   Looking beyond the next few weeks, experts are divided on how low mortgage rates can realistically go over the next year or two. Some analysts expect continued improvement in spreads, paired with gradual cooling in inflation, to pull rates toward the high-5% range  sometime next year. This camp believes we’re on the front end of a broader unwind in the mortgage market’s risk premium, which would directly benefit borrowers.   Others take a more cautious view. They point to geopolitical uncertainty, federal debt levels, and stickier components of inflation as reasons rates may settle in the low-6% range  instead.   The good news? Regardless of which path plays out, both outlooks represent meaningful progress from where we were not long ago — and both still support improved affordability and stronger buyer demand moving forward.   Bottom Line   Between improving spreads, shifting economic data, and a wide range of analyst forecasts, we’re entering a more dynamic and more optimistic phase of the rate cycle. The exact path from here will depend on upcoming reports, but the underlying trend is much healthier than what we’ve seen in the last two years.   If you want to review options or see how today’s rates compare to their long-term goals, I’m always here to help. Market in a Minute...National View Housing Pending home sales increased 1.9% in October, likely helped by lower mortgage rates and an uptick in housing inventory. Conventional loan limits grew by 3.26% for 2026, reaching $832,750 for a single-family home in most U.S. counties. Purchase mortgage applications were up 8% for the week and were 20% higher than a year ago. Economy Jobless claims last week unexpectedly fell to their lowest since mid-April, indicating layoffs remain subdued despite economic uncertainty. Consumer confidence slipped this month as households grew more worried about jobs and finances, likely in part due to the recent shutdown. Retail sales rose less than expected in September, hinting at consumer fatigue from tariff-driven prices, though Q3 growth still looks solid.

November Real Estate Insights: Shifting Trends for Buyers and Sellers in Phoenix, AZ For Buyers It’s been an exciting month of November since President Trump floated the idea of a 50-year mortgage to help some buyers qualify to purchase a home. Initial reactions from the industry have spurred a healthy discussion about its potential impact on borrowers, affordability, and demand. Since then, multiple ideas have been circulating for new products that reduce payments without extending the loan term. It could get interesting!   For context, on a $400,000 loan at 6.25%, the PI (principal and interest) payment on a 30-year loan is $2,463, and on a 50-year loan is $2,180, a difference of $283/month or 11.5%. But the cost of that savings is a much slower repayment of the loan. For example, after 3 years of payments, a borrower would have paid down their loan by roughly $15,000 on a 30-year mortgage, but only $3,800 on a 50-year mortgage. It would take 9-10 years of payments to pay down the same 50-year mortgage by $15,000.  This can create issues when it comes to obtaining an equity loan for expensive maintenance items, such as a new A/C unit, or remodeling projects within 10 years of homeownership. That puts a lot of importance on annual appreciation to build equity.   The good news for first-time homebuyers looking under $400,000 is that Greater Phoenix price measures have fallen 10-14% from the 2022 peak and 3-5% in the last year alone. At 6.25%, mortgage rates are down from their peak of 7.25% at the beginning of 2025 and 0.5% lower than rates from last July, which has reduced the PI payment by 5-10%. Lower prices, combined with mortgage rates down a full 1%, have put payments down 13-15% over the last year. This does not include the extra 20% off in the first year provided by temporary buydowns paid for by 60-70% of sellers in this price range. Supply of properties under $300K is up 39% over last year, prices are down 5%, October sales increased 21%, and new contracts are up 32% so far in November.   According to the Bureau of Labor Statistics, US wage growth has been outpacing inflation for 2 years now. Over the past 2 years, Greater Phoenix's average hourly earnings have grown by 12%, while the concurrent CPI inflation rate for the area shows prices have risen by only 3.3%. This growth, combined with home prices coming down in the most affordable price ranges, means that a 50-year mortgage may not be needed to bring affordability measures into a manageable range. They may already be there for a growing number of buyers. New Listing | Mesa, Arizona For Sellers It took a while for the buyers to mobilize, but better late than never. So far, this is the best 4th quarter Greater Phoenix has seen in 3 years for contract activity. Listings under contract are up 15% over last year, with notable improvements in the market under $300K and the market over $1M. The government shutdown didn’t help closings for FHA and VA transactions, especially between $ 300K and $600K, but October saw a 3.3% increase in sales regardless, and closings delayed will add to the November sales counts.   The Federal Reserve met on October 29th and announced a 0.25% decrease in the Federal Funds Rate and the end of the reduction of their securities holdings as of December 1st. This is another step towards easing quantitative tightening and should stabilize future mortgage rates. That is good news for sellers.   In the meantime, stock market performance, corporate profits, and cryptocurrency have performed well enough to boost the luxury market in Q4. Contracts in escrow between $ 1M and $2M are up 25% over the past 5 weeks and 16% over last year. Contracts in escrow over $2M have risen 25% over the past 9 weeks, up 7% from last year. It hasn’t been enough to boost contract sales much in retirement communities, but Sun City, Sun City West, and Sun Lakes are not doing worse than last year.   Contract activity typically drops after the Thanksgiving holiday until the new year begins. This sparks a wave of price reductions just before Thanksgiving, followed by a trickle in December. January is the most popular month for new listings to hit the market, so properties that don’t sell between now and December should expect another wave of price reductions in the first few weeks of January.   Overall, while demand is slowly improving, supply is still on the rise and keeping most cities in a balanced or buyer’s market. Prices are still under pressure, and buyers are seeking the best value for their budgets. Competition and negotiations can get fierce in December, especially in those areas competing with new home subdivisions. Conflicting Jobs Data Undercuts Expectations for a December Rate Cut The government jobs data is starting to flow in, and it seems to be contradicting what we’ve been seeing from private sources like ADP. As a result, hopes are fading for a 3rd Fed rate cut on December 10.   Delayed BLS jobs data for September. The US economy added 119,000 jobs in September, well ahead of Wall Street expectations of +60,000 and far better than the 4,000 jobs lost in August. However, the unemployment rate rose from 4.3% to 4.4%, and was only a whisker away from being rounded up to 4.5%. Because of the government shutdown, this report was delayed, and the Bureau of Labor Statistics will release only partial October data – without an unemployment rate – alongside the full November report on December 16.   That timing matters because it’s after the Fed’s next policy meeting on December 9-10. The Fed has already cut the Fed Funds Rate in September and October as it balances above-target inflation with signs of a cooling labor market.   After the October meeting, Chair Jerome Powell emphasized there is “no risk-free path” and that a December rate cut is “not a foregone conclusion.” Meeting minutes showed debate and a majority leaning against a December cut. With no new job reports before the meeting, the likelihood of another cut remains uncertain.   ADP’s weekly “NER Pulse” report showed continued job losses. Private employers shed an average of 2,500 jobs per week for the four weeks leading up to November 1. While that was better than the 11,250 jobs lost per week leading up to October 25, it’s still consistent with a labor market that is (slowly) going backwards. When the line above is moving up, job losses are decreasing, or job gains are increasing. When it’s moving down, job gains are decreasin,g or job losses are increasing. Probably the most important thing from this graph is that the average weekly job gain is around ZERO.   Bond and Mortgage Market   If you add everything up: 1) the “hawkish” minutes from the Fed’s previous meeting, 2) the real-time weekly ADP jobs data, and 3) the just-released September BLS jobs data, you’d come to the conclusion that a Fed rate cut on December 10 is unlikely. We can certainly expect a number of dissenting voices, but it looks like the Fed is finished for 2025.   Note:  After the rate cut on Oct 29, the Fed Funds Rate policy range is now 3.75–4.00%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market. December 10 FOMC Meeting: 60% probability that rates will be unchanged (no rate cut). 40% probability that rates will be 25 bps below current (was 91% a month ago). January 28 FOMC Meeting: 50% probability that rates will be 25 bps below current (same as last week). That implies a 25 bps rate cut at one of the December and January meetings. 20% probability that rates will be 50 bps below current levels, implying a rate cut at both the December and January meetings. Market in a Minute...National View Housing Existing home sales in October were 1.7% higher than a year ago, though homes are staying on the market longer at an average of 34 days. After making gains earlier this year, the inventory of homes for sale has fallen to a 4.4-month supply, or 1.52 million units. The median sales price of a home sold in October was $415,200, or 2.1% higher than a year ago. It was the 28th consecutive month of annual gains. Economy September jobs data, released almost 7 weeks late, showed stronger-than-expected job creation, marking the biggest jump since April. The unemployment rate grew to 4.4%, the highest level since October 2021. The increase was driven by an expansion in the labor force. October's Fed meeting minutes revealed a divide among officials on rate cuts and whether inflation or the labor market poses the bigger threat.

Buyer Advantage Holds In Phoenix, Arizona — But Balance Is Creeping In A Slight Lift for Buyers   We’re seeing a touch more strength in buyer-favoring cities this week. Twelve cities leaned more toward buyers over the past month, one held steady, and five tipped toward sellers — including Tempe, Buckeye, Fountain Hills, Chandler, and Cave Creek.   Leading the buyer-friendly shift? Paradise Valley, Peoria, Goodyear, Scottsdale, and San Tan Valley. Everyone else nudged 5% or less. The Cromford Market Index* slipped an average of 2.1%, mirroring last week. The buyer-leaning trend is still intact, just holding steady without much acceleration or cooling.   Right now we have: 6 seller’s markets 5 balanced markets 7 buyer’s markets   October Market Snapshot   Affidavits of Value are in, and here’s how October shook out across Maricopa County:   📍 6,059 total closings• ↓ 1.5% from October 2024• ↑ 2.1% from September   🏡 New homes: 1,272 closings• ↓ 15.4% YOY• ↓ 3.1% MOM   🔁 Resales: 4,787 closings• ↑ 3% YOY• ↑ 3.6% MOM   💰 Median Prices Overall: $478,990 (↑ YOY, ↓ 2% MOM) New homes: $536,091 (↑ 2% YOY) Resales: $460,000 (↑ 1.1% YOY)   Since October had the same number of working days as last year, the year-over-year comparison here is clean — no adjustments needed.   What to Take Away   Resales showed solid strength with a 3% YOY increase, while new-home sales dropped over 15%, pulling total sales slightly lower compared to last October. Still, October outperformed September, thanks in part to an extra working day and a modest pickup in activity.   Pricing is up slightly year over year but still trailing inflation—a textbook sign of a market that has largely favored buyers. Builders also seem to be easing off aggressive incentives, as higher median prices mixed with lower volume suggest they’re holding a bit firmer.   This data reflects single-family, townhomes, and condos in Maricopa County.   Good stuff to keep in mind as you plan your next move — whether you’re thinking of buying while leverage is still on your side, or prepping to list in a spring market that’s likely to feel a bit more balanced. Fed Cuts Rates for the Second Time This Year — Even Without New Data   This was meant to be “jobs week” (JOLTs, ADP, BLS), but on account of the government shutdown, we only got ADP.  Let’s take a look…..   ADP: Job growth swung positive, but remained weak   Private employers added a net 42,000 jobs in October, a notable improvement after two consecutive months of net job losses. Wage growth for “job stayers” was steady at +4.5% YoY, while wage growth for “job changers” rose slightly to +6.7% YoY (from +6.6% YoY). It’s important to recognize that +42,000 jobs is NOT a strong number. Pre-pandemic, it was not unusual to see numbers between +100,000–200,000 per month. At the same time, annual wage growth — and the premium to switching jobs vs. staying — remains low. Broadly speaking, this report is consistent with a lackluster job market (“no hire, no fire”) and modest inflation.   Bond and Mortgage Market   Last week, the Fed cut rates by 25 basis points, but Jerome Powell’s commentary that another rate cut in December was “not a foregone conclusion” rattled the bond markets. The yield on the 10-year US Treasury bond moved back above 4%, reaching 4.12%.   But as you know, mortgage rates have their own market dynamics. Over the last few years, the “mortgage spread” between average mortgage rates and the yield on the 10-year US Treasury bond has been narrowing. In mid-2022, it reached 3.0%. Today it’s at 2.1%. Historically, it’s been 1.6–1.8%. When the “mortgage spread” gets smaller, mortgage rates can move down even if Treasury yields are flat or slightly up. And that’s what’s been happening lately. After the rate cut on Oct 29, the Fed Funds Rate policy range is now 3.75–4.00%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market.   December 10 FOMC Meeting:  69% probability that rates will be 25 bps below current (was 87% last week and 91% the week before that). In other words, another 25 bps rate cut on December 10. But a solid (and growing) 31% probability that the Fed will keep rates on hold. January 28 FOMC Meeting:  57% probability that rates will be 25 bps below current (was 49% last week). That implies a 25 bps rate cut at one of the December and January meetings. 23% probability that rates will be 50 bps below current (was 44% last week).

Buyers Still Have The Edge In Phoenix, Arizona… But The Shift Is Losing Steam as I see a slightly stronger table than last week. 13 cities have become more favorable for buyers over the past month, while the remaining five have moved in a direction favorable to sellers. The latter group is Tempe, Buckeye, Fountain Hills, Chandler, and Gilbert.   Leading the larger group, improving for buyers are Peoria, Goodyear, Scottsdale, and San Tan Valley. All the other large cities that moved in favor of buyers did so by 6% or less.   The average change in Cromford Market Index (CMI)* was -2.1%, up from -2.6% last week. Though the trend still favors buyers, it has been decelerating for 2 weeks now.   We have six cities in seller's markets, five in balanced markets, and seven in buyer's markets. *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. Fed Cuts Rates for the Second Time This Year — Even Without New Data Despite being “in the dark” when it comes to new data, the Fed cut short-term interest rates for the second time this year and also announced the official end of QT — Quantitative Tightening. Mortgage rates remain near multi-year lows but can’t seem to crack into the fives.   The Fed cut rates for the 2nd time this year    The “data-dependent” Fed is currently operating in the dark (except for the CPI report). Despite this, most Fed members voted to cut rates by 25 basis points (25 bps = 0.25% = one-quarter of a percentage point). Two voting members dissented. Trump appointee Stephen Miran wanted a larger 50-bps cut. Jeffrey Schmid (KC Fed President) wanted no cut. Bye Bye to QT   After the FOMC meeting, Fed Chairman Jerome Powell also announced the official end to the balance sheet run-off (the end of QT, or quantitative tightening). QT involved the Fed selling securities (mostly treasury bonds), which put downward pressure on prices and upward pressure on yields. With QT over, that headwind for rates has stopped blowing.   CPI (inflation) was a bit better than expected. In September, “headline” CPI climbed to +3.0% year-over-year (from +2.9% YoY), while “core” CPI eased to +3.0% YoY (from +3.1% YoY). Since most Wall Street economists forecast that “core” CPI would be flat at +3.1% YoY, the actual result was a relief for the bond market. This report was delayed for several weeks due to the government shutdown. In fact, BLS statisticians were called back to work to compile the data because it was needed to calculate the COLA (Cost of Living Adjustment) for Social Security Payments.   Bond and Mortgage Market   The yield on the 10-year US Treasury bond remained just below 4% while average mortgage rates (according to Mortgage News Daily) dropped to 6.13%. We are very, very close to having the lowest mortgage rates in 2.5 years.   Note: After the rate cut on Oct 29, the Fed Funds Rate policy range is now 3.75–4.00%. The probabilities below come from the CME Group website and are implied from the Fed Funds Rate futures market.   December 10 FOMC Meeting:  87% probability that rates will be 25 bps below current (was 92% last week). In other words, another 25 bps rate cut on December 10. January 28 FOMC Meeting:  49% probability that rates will be 25 bps below current. In other words, no rate cut at this meeting. 44% probability that rates will be 50 bps below current. In other words, a 25 bps rate cut at each of the December 10 and January 28 FOMC meetings. Year-end 2026:  While the predictive power of the Fed Funds Futures market fades the further you go out, the market currently expects that rates will be between 75–100 bps below current (2.75–3.25%) at the end of next year. So two rate cuts in the near term, and 1–2 more over the course of the year. Housing Market Pending home sales were surprisingly flat in September. Buyers were likely sidelined by economic uncertainty and labor-market concerns. Home prices rose just 1.5% year over year in August, the slowest pace in over 2 years and below the current inflation rate of 3%. Contrasting slower pending sales, last week's purchase mortgage apps rose 5% over the prior week and were 20% higher year over year. Economy The Fed cut its policy rate by a quarter point, but mortgage markets had already priced in the cut and did not benefit. Fed Chair Powell said in his press conference that a December rate cut was not a foregone conclusion, pressuring mortgage rates higher. The government shutdown has once more delayed key economic data, including this week's reports on jobless claims, inflation, and Q3 GDP.   East Valley Weather

Still a Buyer’s Market… Just a Little Less in Phoenix, Arizona As last week, 15 cities became more favorable for buyers over the past month, while the remaining 3 moved in a direction favorable for sellers. The latter group is Tempe, Gilbert, and Buckeye.   Leading the large group improving for buyers are Cave Creek, Peoria, and Avondale. All the other large cities that moved in favor of buyers did so by 6% or less.   The average change in Cromford Market Index (CMI)* was -2.6%, up from -2.8% last week. Though the trend still favors buyers, it has started to decelerate.   We have six cities in seller's markets, five in balanced markets, and seven in buyer's markets. The primary reason for the trend favoring buyers is that supply is moving higher. With mortgage rates drifting lower over the last week, demand is improving, but still at a slow pace so far. *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 Behind the Headlines: What the Real Housing Data Says About Buyer Activity Average mortgage rates are at their lowest levels in more than a year, already boosting refi activity and bringing buyers off the sidelines. Wouldn’t it be a treat if the September CPI report showed lower-than-expected inflation?   Consumer Price Index (Sep 2025) September inflation came in slightly better than expected: the Consumer Price Index (CPI) rose to 3% year-over-year, while Core CPI eased to 3%. The Fault in our SAARs?   The media loves writing stories like “the fall in mortgage rates has failed to bring buyers off the sidelines.” And, to be fair, the 4.06 million units (SAAR) figure we just got for September 2025 existing home sales seems to support those clickbait headlines. After all, we’ve been selling homes at a 4 million unit annual pace for most of the last three years.   But what if I told you that the non-seasonally-adjusted (NSA, or “raw”) figure for existing home sales was up 8.2% year-over-year in September?! As a reminder, the “raw” data is the actual monthly sales figure. The market actually sold 357,000 existing homes in September 2025. To turn that into a seasonally-adjusted, annualized rate (SAAR), you apply an adjustment factor (to account for seasonality) and then multiply that by 12 (months of the year).   Typically, in September, NSA existing-home sales fall by 10–15% month over month. It’s a seasonal thing. Happens every year. But in September 2025, they only fell 5.1% MoM. In other words, they fell by much less than normal seasonality would predict.   If not for an adjustment in the seasonal adjustment factor (SAF) used to calculate the seasonally-adjusted pace, the SAAR rate for existing home sales in September could have easily been 4.2 million.   So, we’re actually seeing more of a mortgage-rate-fall-driven increase in activity than is apparent in the SAAR figures.   2024:Sept NSA Sales: 330KSAF: 0.98Sept SAAR: (330K X 0.98 X 12) = 3.9m   2025:Sept NSA Sales: 357K (+8.2% YoY as above)SAF: 0.95Sept SAAR: (357K X 0.95 X 12) = 4.07m   You might think “0.95 vs. 0.98, who cares?” but if you instead use 0.98 for the Sept 2025 figure, you get 4.2 million SAAR — which would have been up 8% YoY and beat Wall Street estimates.   Moreover, as we move into October and especially November, the SAFs start to really boost the SAAR figure.  So if we get an increase in the NSA figures in those months (or at least a smaller seasonal decline), we could get a 4.3 or 4.4 million SAAR print EASY.   Bond and Mortgage Market   The yield on the 10-year US Treasury Bond has stayed below 4% (at one point last week, it was 3.95%), and average mortgage rates (according to Freddie Mac’s weekly survey) have dropped to 6.19% — the lowest rate in over a year. Remember: at the beginning of 2025, average rates were over 7%!   There is a wide range of opinion on where mortgage rates go from here. Barry Habib, the CEO & Founder of our parent company, MBS Highway, thinks that mortgage rates will continue to trend down as the Fed cuts rates, and could go as low as 5.5%. But the majority of forecasters believe rates will stay between 6–7% for the remainder of this year and on into 2026.   Note: The Fed Funds Rate policy range is now 4.00–4.25%. These probabilities are sourced from the CME Group website and are implied by the Fed Funds Rate futures market.   October 29 FOMC Meeting:  99% probability that rates will be 25 bps below current (same as last week). In other words, a second 25 bps rate cut on October 29. December 10 FOMC Meeting:  92% probability that rates will be 50 bps below current (was 97% last week). In other words, a third 25 bps rate cut on December 10. Market in a Minute...National View Housing Market Falling mortgage rates prompted buyers to act in September. Existing home sales rose 1.5% to reach a 7-month high. The median existing home price last month grew 2.1% year over year to $415,200. Inventory rose to 4.6 months, up from 4.2 months a year ago Purchase apps fell 0.3% for the week but were 20% higher than the same time last year. Refi apps grew by 4% for the week and 81% year over year. Economy The government shutdown drags on, stalling key economic reports and leaving the Fed and markets short on fresh data. Markets still expect the Fed to cut its policy rate at next week's meeting, and investors anticipate a 3rd rate cut this year in December. Consumers expect to spend $890 per person on the holidays this year, down from $902 in 2024, per a National Retail Federation survey. Hi, I’m Brad Daniels, your neighbor and the valley's real estate expert. I’ve been helping Arizona families make smart moves for over 25 years — and I’d love to help you next! #RelocateToAZ #CallBradToSellYourPad (602) 679-1025

This Quarter Belongs to Buyers in Phoenix, Arizona For Buyers Mortgage rates dropped over 2 months from July 15th (6.85%) to September 16th (6.1%), dropping payments by 7.5% across the board and reaching the lowest rate in over a year. Real estate professionals swung open the gates and awaited a stampede of buyers to arrive. But, while there was a wave of refinances, purchase applications were stubborn. This is a common phenomenon. While rates are actively dropping, it’s human nature to wait and see where they stabilize before taking action, hoping to save even just a few extra dollars off a payment. Rates ultimately bounced and settled around 6.3%, and after 3 weeks of stability buyer activity finally ticked up to a level better than the past three years for October.   Mortgage rates weren’t the only measure dropping over the past 5 months, so were list prices. Listings under $1M saw asking prices drop an average of 2.5% from May to August, then stabilize in September and October. These properties do not yet have contracts on them, but when they do they will likely be closing in November and December, and possibly at the lowest closing price recorded all year.   The biggest price declines have been seen in the first-time homebuyer price ranges. Since July, sales prices for condos between $250K-$300K in Maricopa County (around 1,000sqft) have dropped 4.3% and are 15% below the peak prices of 2022. Single family homes in Pinal County between $300K-$400K (around 1,700sqft) are down 6.7% from last April, and are also 15% down from the peak of 2022. Single family homes in Maricopa County between $300K-$400K (around 1,500sqft) are down 2.9% from last year and down 13% from the peak of 2022. All of this is happening while the overall median price measure is showing just a mild increase year-over-year for the metro area, and just 4.5% below the peak of 2022. This is a prime example of how broad price measures spanning a large area are not always reflective of specific segments and can be skewed by better performing areas and price ranges.   Seller-paid concessions hit another high for September with 56% of MLS closings involving some form of closing cost assistance at a median cost of $10,000, which often includes a temporary rate buydown. This has been a unique hallmark of this housing cycle since rates skyrocketed in 2022. A tool typically used by builders to incentivize buyers has been adopted by everyday sellers and lenders in the resale market in order to compete. As appreciation has been stunted for the past 3-4 years and values declined this year, the number of sellers who can shoulder the cost of these incentives may diminish going forward.   If lower prices, lower mortgage rates, and a high share of seller incentives isn’t enough, seasonally the 4th quarter is the best time to be a buyer in Greater Phoenix. Supply tends to rise right before the holidays, but the rush of buyers doesn’t follow until after the 1st of the year. As a result, there’s a last hurrah of price reductions before Thanksgiving followed by heavier price negotiations and builder incentives as sellers aim to get under contract or close before the end of the year.   It’s common for buyers to get caught up waiting for evidence that it’s the “perfect time” to act, and delaying an affordable purchase in order to land some unicorn price and mortgage rate. Real estate is typically a long-term investment, however. The longer one holds a property, the more equity is built, appreciation accumulated, and risk of loss mitigated.   For Sellers  This year has been a slog for sellers (and their agents) to say the least with stock market fluctuations at the beginning of the year stalling luxury sales, and volatility in mortgage rates. But there are signs things have gotten better. Lower mortgage rates and lower prices have stimulated demand in unexpected places. While homebuyer demand between $300K-$500K has been anemic, homes between $500K-$1.5M saw a boost of sales in September, up 19% year-over-year, which increased the market share from 36% to 38% of sales, and increased both the median price and average price per square foot measures for the Valley. The reason could be linked to jumbo mortgage rates dropping below 30-year conventional rates for the first time in 2 years, but also the popularity among high-wage buyers of adjustable-rate mortgages, which are currently averaging 5.8%. While Greater Phoenix remains in a buyer’s market overall, the Northeast Valley including Fountain Hills, Paradise Valley, and Scottsdale are top seller’s markets, reflecting a drop in supply and sustained demand in these cities. Also seller’s markets: Anthem, El Mirage, Avondale, Chandler, Gilbert, Apache Junction, and Sun Lakes. Balanced markets include Phoenix, Glendale, Sun City West, Tolleson, Mesa, and Tempe. Buyer’s markets are mostly on the edges and outskirts where there is more new home development. They include Peoria (barely), Sun City, Surprise, Goodyear, Litchfield Park, Laveen, Buckeye, Gold Canyon, San Tan Valley, Queen Creek, Maricopa, Arizona City, and Casa Grande.   The 4th quarter is not the best time to be a seller, but going in with the right mindset, patience, and price strategy will go a long way towards obtaining a contract before the end of the year. For those who wish to wait, the 1st quarter comes with both a wave of new competing listings from January through March, and increased contract activity that lasts through May. *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. Arizona’s Business Boom: A State Moving at the Speed of Innovation Phoenix and the surrounding cities in Arizona continues to prove why it’s one of the most dynamic and business-friendly states in the nation. The Arizona Commerce Authority recently shared some impressive updates highlighting how our state’s strong economic foundation and forward-thinking policies are fueling growth across industries—from manufacturing and logistics to data centers and semiconductor innovation.   World-Class Business Climate Arizona offers a powerful combination of advantages for both established companies and new investments. With a sunny, steady, and predictable business climate, our state delivers: Lower taxes and a streamlined regulatory environment Modern infrastructure connecting global markets through air, rail, and highway systems Top talent and a growing workforce supported by leading universities and technical programs   Economic Highlights #1 Most Competitive State in the Mountain Region (Site Selection Magazine, 2025) Top 4 Best State for Business (Chief Executive Magazine, 2024) 2.5% Flat Income Tax — the lowest in the U.S. 4.9% Corporate Tax Rate — among the lowest nationwide No franchise, inventory, estate, or gross receipts taxes   Driving Innovation Arizona’s leadership in advanced manufacturing and semiconductors continues to attract global attention. Events like Arizona Semiconductor Leadership Day and expansions in logistics, R&D, and data centers underscore our role as a hub for next-generation technology and investment.   Smart Growth & Sustainable Future Even with record development, Arizona continues to prioritize secure water management—storing nearly 3 trillion gallons underground for future use and requiring developers to prove a 100-year water supply before building. That balance of growth and sustainability keeps our communities strong and our economy resilient.   With over 456 projects, 127,000+ jobs, and nearly $180 billion in capital investment in the pipeline, Arizona is truly moving at the speed of business. The Calm After the Cut: Treasury Yields Dip, Mortgage Rates Edge Toward 6% The data vacuum continues with the ongoing shutdown. We didn’t get retail sales this week, but we will get CPI next week. Meanwhile, commentary from Jerome Powell and other Fed members helped 10-year treasury yields drop below 4% and 30-year mortgage rates approach 6%.  Let’s take a look.   Fed Minutes Reveal Deep Divide Minutes from the Fed’s September 17 meeting highlight differing views among officials on the direction of interest rates, the pace of inflation, and the strength of the labor market.   At that meeting, the Fed delivered a widely expected 25-basis-point rate cut – its first of the year – after holding rates steady through its previous five meetings. The move reflects the Fed's ongoing effort to balance persistent inflation with growing concerns about a weakening labor market. Reminder: The Fed Funds Rate is what banks charge each other for overnight loans. While it doesn’t directly set mortgage rates, it influences borrowing costs across the economy.   What’s the bottom line?   The Fed is navigating a tough balancing act: inflation remains above target, but economic momentum is clearly slowing. High inflation limits the Fed’s ability to cut rates, while signs of softness – especially in jobs – may prompt more action.   Chair Jerome Powell underscored the complexity, saying there’s “no risk-free path” as the Fed weighs its next move.   Complicating matters further, the government shutdown has delayed key inflation and employment reports the Fed typically relies on – leaving policymakers with less data and even less consensus heading into the next meeting on October 29.   Powell says QT could stop soon Quantitative tightening (the Fed selling assets) is the reverse of quantitative easing (the Fed buying assets). QE was about bidding up bond prices to keep yields/interest rates lower to support the economy. QT has been about unwinding that stimulus, and that exerts a downward influence on bond prices and keeps yields higher than they might be otherwise. QT has been happening since 2022. Powell suggested it could end in the next few months. He also had the following to say about QE:   “With the clarity of hindsight, we could have — and perhaps should have — stopped asset purchases sooner.” — Jerome Powell, Federal Reserve Chairman   Why Homeownership Remains a Smart Investment According to Cotality’s latest Home Price Insights report, home values declined by just 0.3% in August. However, they were still up 1.3% year-over-year – a slight slowdown from July’s 1.4% annual growth. Meanwhile, ICE’s data for September showed a 0.17% monthly increase in home prices (seasonally adjusted), with a 1.2% annual gain – up from 1% in August. This marked the first acceleration in home price appreciation in eight months, signaling renewed strength in the market.   What’s the bottom line?  Home prices are always driven by supply and demand, and both sides are currently contributing to market strength. On the demand side, falling mortgage rates have helped improve affordability to the best levels in 2.5 years, according to ICE. This has brought more buyers back into the market, as seen in the uptick in contract signings for both new and existing homes, as well as increased mortgage application activity. Many of these buyers represent pent-up demand that had been waiting for more favorable conditions.   On the supply side, inventory is tightening. ICE has reported a decline in new listings along with an increase in sellers pulling their homes off the market. With more buyers entering and fewer homes available, these conditions are putting upward pressure on prices.   Looking ahead, Cotality forecasts a 3.9% increase in home values over the next 12 months. This outlook likely reflects expectations for continued lower rates, strong underlying demand, and tighter inventory levels heading into the fall and winter.   Real estate remains one of the most reliable ways to build long-term wealth. For example, a $500,000 home appreciating at 4% annually would gain $20,000 in just one year – underscoring the strong return potential of homeownership.   Bond and Mortgage Market As I write this note, the yield on the 10-year US Treasury has moved below 4%. If we apply the historically typical spread of 1.5%-2.0% (between 30-year mortgage rates and the 10Y UST), we’d get a 30-yr mortgage rate estimate of 5.5%-6.0%. We’re at 6.27% today. I have zero doubt that mortgage rates in the 5% range would bring life roaring back into the housing market — which has been stuck at 4 million unit sales pace for nearly 3 years.   Note: The Fed Funds Rate policy range is now 4.00–4.25%. These probabilities come from CME Group website and are implied from the Fed Funds Rate futures market. October 29 FOMC Meeting:  99% probability that rates will be 25 bps below current (was 95% last week). In other words, a second 25 bps rate cut on October 29. December 10 FOMC Meeting:  97% probability that rates will be at least 50 bps below current (was 82% last week). 57% probability that rate will be 75 bps below current — in other words, a 25 bps cut on October 29 and a 50 bps cut on December 10. A jumbo rate cut in December? Now that’s new! Market in a Minute...National View Housing Market According to ICE, the average credit score for purchasers locking their rates was 736 in September, the highest in 6 years of tracking. Purchase apps fell for the 3rd straight week but remain 20% above last year as rising inventory keeps some buyers engaged. In a Realtor.com  survey, 82% of Gen Z respondents believed homebuying is harder for their generation. Affordability was the top life concern for 18%. Economy After a few months of calm, tensions between the U.S. and China reignited in recent weeks, sparking new concerns over trade and tariffs. The government shutdown is in its 3rd week with no end in sight, limiting key data on the labor market and economy. Fed Chair Powell said quantitative tightening might wrap up soon, potentially limiting the supply of mortgage bonds and driving down rates. Weather Helping people move to (or from) the desert is my specialty! If you know someone thinking of relocating to Arizona — maybe escaping the snow or chasing more sunshine — send them my way. I’ll help make their transition smooth and stress-free. ☀️ Real estate advice, relocation tips, and warm Arizona welcomes — that’s what I do best. #RelocateToAZ #CallBradToSellYourPad

The Buyer’s Window Is Closing: Market Shift Ahead in Greater Phoenix, Arizona The first thing to note this week is that our tracking now includes 18 major cities. We’ve officially separated Queen Creek (85142) from San Tan Valley (85140, 85143, 85144), as their boundaries have become more defined and San Tan Valley has grown into the largest town in Pinal County.   The second—and perhaps most telling—change is visual: a sea of red dots has returned to the table. After several weeks of seller momentum, the market has shifted back in favor of buyers. Over the past month, 11 cities moved in a direction favorable to buyers, while 7 became more favorable for sellers.   Among the seller-leaning cities are Tempe, Gilbert, Mesa, Queen Creek, and Scottsdale—with Tempe and Gilbert seeing the most notable gains (over 5%). Fountain Hills and Peoria also trended slightly toward sellers, though by negligible margins.   Leading the pack for buyers are Cave Creek and Paradise Valley, followed by Avondale. For most other cities, shifts were minor (3% or less), but the overall trend is clear: the Cromford® Market Index (CMI)* fell 1.1%, down from +0.4% last week—a sign that this softening will likely continue through mid-November.   We now see seven cities in seller’s markets, four in a balanced market, and seven in a buyer’s market.   Meanwhile, mortgage rates remain stable, hovering between 6.34% and 6.38%, according to Mortgage News Daily. However, that level isn’t low enough to spark meaningful demand. Active listings without a contract rose 1.85% over the past week and will soon exceed 25,000. Including CCBS and UCB statuses, that number climbs to nearly 28,000—a clear signal that inventory is stacking up.   Across most price points, sellers would benefit from less competition. Entry-level supply now far outpaces demand, leaving first-time buyers in a strong negotiating position—if they have the right guidance. At the opposite end, luxury demand remains steady, buoyed by gains in stocks, crypto, and precious metals. However, if those markets falter, expect a swift decline in high-end demand and a corresponding surge in supply.   Even homebuilders are pulling back after seeing August’s buyer enthusiasm fade. Many are quietly offering price cuts and incentives on quick-move-in homes to avoid overbuilding. Public builder stock prices have dropped sharply over the past week—a reflection of the caution among investors. *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. Data Blackout: Markets Navigate Without Jobs or Inflation Reports We find ourselves in a data vacuum. No BLS jobs report last week. Maybe no CPI report next week. However, mortgage rates are holding steady near 6.3%, and the market is still expecting two Fed rate cuts before the end of the year.   No BLS jobs data last Friday.  Thanks to the government shutdown, the BLS employment report for September wasn’t released. Was the analysis at least finished? Has Jerome Powell seen the data? We don’t know. Separately, the Carlyle Group (a giant investor) said that it estimated that the US economy added just 17,000 jobs in September, well below Wall Street expectations of +54,000. [ADP, Carlyle Group]   As a reminder, the BLS reported 22,000 jobs added in August, while ADP reported 32,000 net job losses in September.   2026 Federal Income Tax Brackets   Good news for future filers: Tax brackets and standard deductions are going up for 2026, which could mean potential tax savings when you file in April 2027. Bond and Mortgage Market Average 30-year mortgage rates got as low as 6.13% in mid-September before quickly rebounding to ~6.30%. And they’ve hovered around those levels for the last three weeks. In the absence of official government data, the market has taken its cues from: 1) private data sources like ADP (generally evidencing a weaker job market), and 2) moves in international bond yields (generally higher).   We are scheduled to receive the September CPI (inflation) data next Wednesday, but this may not occur if the government shutdown continues.   Note: The Fed Funds Rate policy range is now 4.00–4.25%. These probabilities are sourced from the CME Group website and are implied by the Fed Funds Rate futures market.   October 29 FOMC Meeting:  95% probability that rates will be 25 bps below current (down slightly from 99% last week). In other words, a second 25 bps rate cut on October 29. December 10 FOMC Meeting:  82% probability that rates will be 50 bps below current (down slightly from 87% last week). In other words, a third 25 bps rate cut on December 10. Markets in a Minute...National View Housing Market Purchase mortgage applications decreased 1% for the week but remained 14% higher than the same week a year ago. Adjustable-rate mortgages have increased slightly in popularity. ARMs made up 9.5% of applications last week, up from 8.4% the previous week. AI-enhanced listing photos enable agents to "virtually stage" homes at a fraction of the normal cost, but they are raising concerns about transparency. Economy Minutes from last month's Fed meeting showed that officials largely agreed a recent slowdown in the labor market outweighed concerns about inflation. The government shutdown continues this week, delaying key economic reports and making private-sector data even more important to markets. Gold hit a new high and surged past $4,000/oz as investors fled risk, seeking safety amid market volatility and speculation about the Fed's policy rate cut. Weather I truly appreciate your continued referrals — they mean the world to me. If you’re thinking about relocating to Arizona or selling your home, let’s connect and make your next move a success. Brad Daniels | East Valley Real Estate Team 📞 (602) 679-1025 | 🌐 www.RelocateToAZ.com

Market perks up in Phoenix — But sellers, don’t celebrate just yet, as the affidavits of value have been counted and analyzed for Maricopa County’s September filings, and the results paint an interesting picture of a market that’s shifting ever so slightly in favor of sellers — but only just. S ales Activity   September saw 5,933 closed transactions, a 6.3% increase from September 2024 (5,494) and up 1.0% from August. Of these: 1,313 were new homes, down 8.9% year over year but up slightly (0.2%) from August. 4,620 were resale homes, up 11.5% from last year and 1.2% from August.   While September 2025 had a slight advantage with 21 working days (compared to 20 last year), meaning more opportunities to process closings, the increase in resale activity is still notable. Higher-end resale homes re-emerged after a quiet summer between June and August.   Pricing Trends   Median sales prices bounced back in September: Overall median: $488,772 — up 3.6% from last year and 2.9% from August. New home median: $532,645 — up 2.7% year over year but down 0.4% from August. Resale median: $470,000 — up 4.4% year over year and 4.5% from July.   In short, resale prices are gaining momentum over new homes, signaling renewed buyer confidence in the existing housing stock.   Market Dynamics   Between September 2 and October 2, the market nudged slightly in favor of sellers. The average change in the Cromford Market Index (CMI) was +0.4%, continuing a slowdown from +3.1% the previous week and +5.9% the week before.   Interest rates provided the market with a temporary boost in early September, with the 30-year fixed loan reaching a low of 6.13% on September 16. However, rates jumped to 6.36% after September 17, tempering buyer enthusiasm and allowing inventory to follow its normal seasonal increase.   Over the past five weeks, new listings have been plentiful, adding to active supply levels across the Valley.   Market by City   Over the last month, 11 cities have shifted in favor of sellers, while six have shifted in favor of buyers. Notably, Buckeye and Avondale were the two that switched sides since last week.   However, zooming in to just the past seven days, the momentum has tilted back toward buyers — 14 cities moved in favor of buyers, while only three (Tempe, Mesa, and Gilbert) managed gains for sellers, all located in the Southeast Valley.   As of now: 7 cities are in seller’s markets (3 only barely). 4 cities remain balanced. 6 cities sit in a buyer’s market territory.   The Bottom Line   Despite a modest September uptick, the Greater Phoenix market remains finely balanced. Sellers are regaining slight leverage, especially in select areas of the Southeast Valley, but rising inventory and modestly higher rates are keeping conditions in check.   Buyers still have opportunities—particularly in markets that have softened—and motivated sellers are adjusting accordingly. The next few weeks will determine whether this small seller-side advantage holds or fades as we move deeper into fall. Mortgage Market and Economic Update – Week Ending 10/02/2025 The government shutdown was the big headline of the past week.  So let’s take a look at that and some other key points…   The government shutdown has delayed key economic data, including the Bureau of Labor Statistics’ September jobs report and weekly unemployment claims. The BLS report was expected to play a key role in shaping the Fed’s next rate decision at its October 29 meeting. This delay comes at a critical time, as the Fed weighs two competing forces: inflation that remains above target, and growing signs of a slowing economy. In its absence, the ADP Employment Report carries more weight than usual – and the latest numbers showed clear signs of softening. ADP reported a loss of 32,000 jobs in September, missing expectations for a 50,000-job gain. Job losses were broad-based, with seven out of ten sectors reporting declines. August’s report was also revised down sharply, from a 54,000 gain to a 3,000-job loss.   If the shutdown continues, it may delay key inflation reports that the Fed also relies on when determining monetary policy.   How the government shutdown could impact your home loan or closing The federal government shutdown is already affecting key parts of the housing market – and if you’re buying, selling, or refinancing, here’s what you need to know.   Several government-backed programs are facing delays or suspensions: USDA rural home loans are currently paused. FHA and VA loans are still being processed, but reduced staffing could slow down approvals and appraisals. The IRS may be delayed in processing tax transcripts, which is a common requirement for many mortgages.   Another concern is the pause of the National Flood Insurance Program (NFIP), managed by FEMA. However, there are private flood insurance alternatives available, like Neptune, that could provide coverage options. While I don’t expect this to cause real issues in the loan process, and I don’t expect this shutdown to last that long, it is something to be aware of.   JOLTs — Nothing shocking Job openings were pretty much flat in August at 7.2 million. Both the hiring rate (3.2%) and the quits rate (1.9%) were at/near 10 year lows. This ‘no hire/no fire’ environment speaks to the lack of confidence of both employers (of strong growth ahead) and employees (of being able to find a higher-paying job). [BLS]   ADP — Jobs going backwards Giant payroll processor ADP reported that private employers LOST a net 32,000 jobs in September. That was way below expectations for 45,000 in job GAINS. In addition, the jobs number for August was revised down from +54,000 to -3,000. That means that the number of jobs has declined in three out of the last four months. Is this the ‘solid’ job market Fed Chairman Jerome Powell keeps talking about? [ADP] Bond and Mortgage Market   Given all the issues with the BLS jobs report (consistently large, negative revisions), the ADP report was already becoming more important. But with the September BLS jobs report release delayed by the government shutdown, the weaker-than-expected ADP report became the primary market mover during ‘jobs week’. Effectively, the ADP report convinced the market (once again) that the Fed will cut rates at each of the last two meetings of the year.   Note: The Fed Funds Rate policy range is now 4.00–4.25%. These probabilities are sourced from the CME Group website and are implied by the Fed Funds Rate futures market.   October 29 FOMC Meeting: 99% probability that rates will be 25 bps below current (up from 86% last week). In other words, a second 25 bps rate cut on October 29. December 10 FOMC Meeting: 87% probability that rates will be 50 bps below current (way up from 65% last week). In other words, a third 25 bps rate cut on December 10. Market in a Minute...National View Housing Market Pending sales of existing homes increased solidly in August to the highest level in 5 months, helped along by lower mortgage rates. Data suggests home price growth is cooling nationwide. Appreciation is decelerating amid affordability pressure. Real estate transactions that rely on government services, such as tax record confirmation, may be delayed during government closures. Economy According to ADP, private payrolls experienced their largest decline in 2 1/2 years in September, a sign of weakening labor market conditions. Despite essential services remaining open, the government shutdown means key reports, including Friday’s jobs report, will not be released. Markets are already betting that the shutdown will contribute to weakening the economy. There's increasing speculation of further Fed rate cuts. East Valley Weather Have a great week - Brad Daniels, East Valley Real Estate Team (602) 679-1025 #RelocateToAz #CallBradToSellYourPad

I’m excited to share some great news — my buyers are officially under contract  on a beautiful home in the Arroyo Verde  community of Apache Junction! 🎉 This 3-bedroom, 2-bathroom home offers over 1,600 sq. ft. of comfortable living space, complete with a desirable split floor plan, updated tile and carpet, and a kitchen equipped with included appliances. Sitting on a spacious 7,200+ sq. ft. lot  with low-maintenance desert landscaping, this property is perfect for both relaxation and entertaining. But here’s the best part: no HOA!  🙌 That means more freedom and flexibility to enjoy the property the way you want. My buyers were able to secure this home at a fantastic value, and I couldn’t be happier for them as they move one step closer to closing day. Why Buyers Love Apache Junction Apache Junction continues to attract buyers for its affordability, wide-open views of the Superstition Mountains, and welcoming community atmosphere. With quick access to the US-60 and nearby shopping, dining, and outdoor recreation, it’s the perfect mix of convenience and lifestyle. Thinking About Making a Move? If you’ve been considering buying a home in the East Valley — whether it’s Mesa, Gilbert, Chandler, Queen Creek, or Apache Junction — now is a great time to start your search. Opportunities like this don’t last long, and with the right strategy, you can land a great deal, too. 👉 Ready to start your home search? Contact me today and let’s find your dream home. 📲 Brad Daniels | East Valley Real Estate Team 🌐 www.relocatetoaz.com #CallBradToSellYourPad

Sold with multiple offers! Located in the desirable Lesueur Estates neighborhood, this 3-bedroom, + den, 2-bath  home offers  1,604 sq. ft.  of living space. Whether you’re a savvy investor or a buyer ready to roll up your sleeves, this property is a blank canvas with instant equity potential . Investor Special  in a sought-after East Mesa location Spacious living and dining areas Long-term rental for the past 20 years — ready for updates Low HOA Close to US-60, top-rated schools, dining, and shopping This home is priced to reflect its condition, but the bones are solid and the location is a winner. 🤝 Relationships Matter This referral marks another connection from California to Arizona  — a trend that continues to grow as more families, retirees, and investors look to make a move or diversify their portfolios. I’m proud to be the agent that agents trust when their clients are heading to the Valley. Barbara, your trust means the world to me. Your clients have been a joy to work with, and I’m grateful for your continued partnership. 💬 Thinking About Moving to AZ? Whether you’re relocating, investing, or helping a client transition into the Arizona market, or looking for an investor special in Mesa, AZ, let’s connect. I’d love to show you why so many California buyers — and their agents — choose to work with me. For more information on this home, click here! 📲 Brad Daniels Mesa Native | Arizona Real Estate Expert My Home Group 📞 (602) 679-1025 🌐 www.relocatetoaz.com 📧 brad@homeselleraz.com #CallBradToSellYourPad