A recent Bank of America survey asked prospective homebuyers what would encourage them to pull the trigger—and their answers pointed to one thing: better affordability, especially lower prices and more favorable interest rates.
Price Growth Is Cooling
Over the past few years, home prices surged at breakneck speed, leaving many buyers frustrated and sidelined. Today, that rapid escalation has given way to a more measured pace. While price increases of 20 percent year-over-year were not uncommon during the 2020–2021 boom, forecasts now anticipate single-digit gains nationally—which is closer to a more sustainable norm.
That said, the picture is uneven across the country. Some metros still see rising values, while others are beginning to level off—or even dip. Importantly, prices aren’t collapsing; they’re simply growing more slowly. For buyers, that deceleration makes planning far more predictable.
In Phoenix, for example, home prices continue to rise—but at a more tempered clip than in the frenzy years. The market is showing signs of stabilization, with fewer arms-race bids and more time to negotiate. The overheated pace is cooling, giving buyers a bit more breathing room.
Mortgage Rates Are Softening (With Caution)
Interest rates, which recently soared to their highest levels in years, have edged downward. That ease in financing pressure is welcome news for many would-be buyers. As economist Lisa Sturtevant of Bright MLS puts it:
“Slower price growth coupled with a slight drop in mortgage rates will improve affordability and create a window for some buyers to get into the market.”
Even modest improvements in interest rates can translate to substantial monthly savings. That said, rates remain volatile—so while we’ve seen a pullback, further movement up or down is possible.
Looking ahead, many analysts expect rates to hover in the low to mid-6 percent range over the coming months—much more favorable than levels seen earlier this year. Depending on broader economic trends, there’s some chance of additional softening.
Why All This Matters
Although confidence in the overall economy remains cautious, signs of balance are emerging in the housing market. Prices are moderating, and mortgage rates have eased from recent peaks. That doesn’t erase affordability challenges altogether, but it does suggest that buyer conditions are improving.
In regions like Phoenix, where demand remains relatively strong, these shifts may encourage more buyers to reenter the market—especially those who sat out during the rapid-price years. With less frenzied competition and slower-than-before price gains, buyers in Phoenix may find more negotiating space and fewer bidding wars.
In Conclusion
The two biggest obstacles holding buyers back—prices and
rates—are showing signs of change. Prices are moderating. Interest rates are
easing. And both trends could continue into 2026.
If you’re seriously contemplating a move, reach out to a real estate
professional familiar with Phoenix (or your local area). They can walk you
through the latest data, help you estimate what you can afford, and guide you
through what’s happening on the ground.