The Interest Rate Market - July 2026
The Phoenix housing market continued its steady trend through July, but one factor stood above the rest: mortgage rates. While inventory remains lower than this time last year and home prices have stayed remarkably stable, higher borrowing costs have made buyers more selective and kept the market moving at a measured pace rather than a rapid one. The result is a market that continues to favor well-prepared buyers and realistically priced sellers.
For Buyers
Mortgage rates climbed throughout July, finishing the month near 6.8%, their highest levels since last Summer after spending much of early 2026 in the low-6% range. Rising Treasury yields and continued inflation concerns have kept borrowing costs elevated which has understandably tempered buyer sentiment.
The good news is that the Phoenix market continues to offer buyers something that was almost impossible to find just a few years ago: time and negotiating power. Across the Phoenix metro area homes are averaging 48 days before going Under Contract and many sellers remain willing to negotiate repairs or closing-cost assistance. While appreciation has been modest, today's buyers are purchasing in a market with less competition and greater flexibility which is an advantage for anyone planning to own their home for the long term.
For Sellers
Despite higher mortgage rates the market continues to show resilience. Active Inventory is down approximately 3% from last year, listings Under Contract are up 3% and Closed Sales have increased more than 6%, indicating that qualified buyers are still actively purchasing homes.
The challenge isn't demand, it's expectations. Buyers have become increasingly value-conscious and are taking more time before making offers. Well-presented homes that are priced appropriately continue to sell, while homes that miss the mark are seeing longer marketing times. With roughly 55% of recent transactions including seller-paid concessions, strategy has become just as important as pricing.
The Bottom Line
July reinforced a trend we've seen throughout much of 2026: the Phoenix market is remarkably stable. Prices have held steady, inventory remains healthy and buyers continue to purchase homes despite elevated mortgage rates. The biggest variable heading into late Summer isn't inventory or pricing, it’s interest rates. If rates begin to move back toward the low-6% range we expect buyer activity to strengthen quickly. Until then, success for both buyers and sellers will continue to come from preparation, patience and realistic expectations.