After a slower couple of years in real estate, 2026 is shaping up to be a more active and balanced year for housing—both nationally and here in the Phoenix metro market.
High mortgage rates and affordability challenges caused many buyers and sellers to hold off in 2024 and even into 2025. But market conditions are expected to shift in 2026, bringing renewed movement, improved affordability, and more opportunity for those ready to make a move.
Let’s take a closer look at what forecasts show for mortgage rates, home prices, and housing activity in 2026—and how these trends are expected to impact buyers and sellers in Phoenix.
Mortgage Rates Expected To Ease Gradually
Mortgage rates have controlled much of the housing market
over the past two years. When they climbed above 7%, many buyers hit pause and
affordability became a challenge.
The good news? Experts forecast rates will continue easing into 2026.
While the path down won’t be a straight line, most economists agree that inflation and economic cooling will push rates lower over time. Forecasts from leading organizations suggest that rates could reach the low 6% range and potentially dip into the high 5% range by late 2026.
Even small rate improvements can have a big impact. A drop from 7% to 6.25% can reduce a monthly mortgage payment by hundreds of dollars. That’s expected to bring more buyers back into the market, increase loan approvals, and improve overall affordability.
What This Means for Phoenix Buyers
For Phoenix-area buyers who stepped back due to rising
rates, 2026 may finally deliver the opportunity they’ve been waiting for.
Even modest rate declines could:
- Increase buying power
- Expand available home options
- Reduce competition compared to the peak frenzy of past years
Being prepared early will be key, because competition will likely increase again once rates improve.
Phoenix Home Prices in 2026: Growth Without the Spike
Many people are wondering whether home prices will fall in
2026. Based on current projections, a major price drop just isn’t in the
cards—nationally or locally.
Instead, home prices are expected to see modest, sustainable growth.
National economists forecast 2% to 3% appreciation in
2026, but in the Phoenix metro area, projections are slightly higher
due to steady job growth and continued population demand.
Analysts expect Phoenix home prices to rise between 2% and 4% next year—a
healthy, balanced pace that supports equity without inflating prices.
Affordability Will Slowly Improve
While home prices are expected to rise, affordability
should improve overall due to easing mortgage rates and slightly higher
inventory.
The combination of slower price growth and declining rates should give
buyers more flexibility in their budgets and make 2026 one of the most
approachable markets we’ve seen in years.
Inventory Relief and More Market Activity Ahead
One of the biggest challenges of the past few years has been
low housing inventory. When mortgage rates increased, many homeowners stayed
put to keep their low-rate loans.
That’s expected to shift in 2026.
More homeowners are likely to list their homes, especially
those who’ve been waiting for better affordability or life changes such as
downsizing, upsizing, or relocating within the Valley.
As a result, housing inventory is expected to rise gradually throughout the
Phoenix metro area.
This increase in new listings will:
- Provide buyers with more choices
- Help balance supply and demand
- Create opportunities for move-up buyers who want to sell and buy within the same market
New construction in areas like Buckeye, Queen Creek,
Surprise, and Mesa will also help meet demand.
Builders are expected to continue offering incentives, rate buydowns, and
closing cost assistance well into 2026.
More Sales and a Healthier Market Overall
With better affordability and more inventory, Phoenix is
projected to see higher home sales volume in 2026 compared to the past two
years.
That means more movement, more opportunity, and a housing market that feels
balanced again.
Bottom Line: 2026 Brings Renewed Opportunity in Phoenix Real Estate
After two quieter years, the 2026 housing market is expected
to gain momentum.
Falling mortgage rates, increasing inventory, and steady—but not extreme—price
growth will create a healthier environment for both buyers and sellers.
For buyers, improving affordability and more home choices
make 2026 a great time to act—especially early in the year before competition
picks up.
For sellers, strong equity and stable demand will continue to support solid
home values.
Ready To Make a Move in 2026?
If you’re planning to buy or sell in the Phoenix metro area in 2026, now is the time to prepare. The most successful moves happen with a strategy—not by waiting on headlines.
- Want a pricing estimate for your home?
- Need a custom buying plan based on your ideal timeline?
- Curious what your options look like in the 2026 market?
I’d be happy to help you make a smart, confident move.
Let’s connect and build a plan that fits your goals.