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.