PHOENIX MARKET PULSE - MARKET UPDATE

What a Soft Housing Market Actually Means in Phoenix

Fewer buyers, more homes for sale, and a payment that went up about $200 a month in five weeks. Here is what that means in plain English.

OCTOBER 2026 - Data: Cromford Report

The Phoenix real estate market in October 2026 is softer than it was a month ago. Soft is the word I have been using with buyers, so here is what it means. Fewer people are buying. More homes are for sale. And a monthly payment costs about $200 more than it did five weeks ago. The typical home still sells for $450,000, the same as a year ago.

What does a soft Phoenix real estate market actually mean?

A soft market means fewer buyers and more homes for sale. In Phoenix right now, 11.2% fewer homes are under contract than a year ago, and 4.9% more homes are for sale. Buyers have more to choose from. Sellers have fewer buyers to talk to.

Here is a simple way to see it. A month ago, about 31 homes were under contract for every 100 homes for sale. Now it is about 26. A year ago it was about 30. Fewer homes are selling, and more homes are waiting for a buyer. This was the biggest September drop in homes under contract since 2022. Pending sales fell about 11% in just one month, down to 3,864.

In short: fewer deals, more homes, and a slower pace.

Are Phoenix home prices dropping right now?

Not yet, based on the homes that have closed. The typical home sold for $450,000, the same as a year ago. The price per square foot is up 2.2%, to $293.61. Prices have also held up a little better than the experts expected a month ago.

Sellers got 97.36% of their asking price, the same as last year. One thing to keep in mind: homes that closed in September were mostly under contract back in July and August. So those prices were agreed to before the slowdown. The prices being agreed to now will show up in the numbers over the next month or two.

Those same experts expect prices to stay soft through the rest of this year. They also said more sales of higher-priced homes could help keep the price per square foot from slipping. They did not put a number on it.

In short: closed prices have not dropped yet. The next closings were agreed to during a slower stretch. And prices are expected to stay soft through the end of the year.

How have mortgage rates changed what buyers pay each month?

The 30-year mortgage rate went from 6.75% to 7.57% in about five weeks. That makes a monthly payment 8.5% higher. On a typical $450,000 home with 20% down, that is about $200 more every month. That is just the loan payment, before taxes and insurance.

The median price is the same as a year ago. The payment is not. That is a big reason fewer people are buying. Deals that were already agreed are also falling apart more often than they have in three years, which was the last time rates peaked. New contracts are down about 11% from a year ago and 10.3% from August. Some buyers look like they are stepping away from the market.

In short: the price is the same as last year, and the payment is higher.

Which Phoenix cities favor buyers or sellers right now?

Five of the 18 biggest cities in the Phoenix area favor sellers. Five are balanced. Eight favor buyers. Goodyear, Surprise, Peoria and Buckeye are all on the buyer side. Scottsdale is still the strongest seller city, with a score of 149.1.

Each city gets a score that shows who has the upper hand. Above 110 favors sellers. Below 90 favors buyers. In between is balanced.

Source: Cromford Associates LLC. Change compares each city with last month. The two shaded rows moved the most.

The average score across all 18 cities is down 12.9% from last month. That is the lowest since November 2023, and it has slipped every week since mid-August. Every city has more homes for sale than a month ago. In 16 of the 18 cities, fewer buyers are shopping. Only Scottsdale and Buckeye saw more buyers.

Fountain Hills and Paradise Valley dropped the most, down 34% and 32%. They have 25% and 21% more homes for sale than a month ago, and buyer interest fell 18% in both. They are still seller cities, because both scores are above 110. After those two, Tempe, Maricopa and Surprise moved furthest toward buyers, down 21%, 16% and 15%.

Mesa, Gilbert and Glendale are still balanced, but they have slipped under 100. Only Phoenix (102.4) and Avondale (101.8) are still above it. Buckeye fell below 50, to 49.8. Maricopa is last at 42.8.

In short: no city moved toward sellers this past month. Scottsdale is the only seller city where more buyers are still showing up.

How much inventory is in the Phoenix real estate market right now?

There are 25,647 homes for sale in the Phoenix area right now. That is 8.3% more than last month and 4.9% more than a year ago. Some increase is normal in September when sellers come back after the summer, but this jump was more than double last September's 3.8%.

If you also count homes that are under contract but still being shown, the total is 28,348. Here is another way to look at it. At the current pace of sales, the homes for sale today would take about 135 days to sell. A month ago that was 126 days. A year ago it was about 137.

Fewer sellers gave up in September. The seller success rate is 68.6%, up from 64.7% a month ago. A year ago it was 70.6%. Homes sold in September came to 5,868, which is 4.5% more than August and 4.8% fewer than a year ago. With fewer contracts now, I would expect fewer closings in October and November than last year.

In short: more homes to choose from, and fewer sales coming this fall than last fall.

Source: Cromford Associates LLC. Green and red show the direction of change only. Days of supply is how long today's homes for sale would last at the recent pace of sales.

Market data: Cromford Associates LLC. Mortgage rate: Mortgage News Daily.