Phoenix and Tucson Housing Markets Shift Toward Buyers as Mortgage Costs Remain High
Phoenix and Tucson are showing signs of a more balanced housing market, giving buyers greater negotiating opportunities than during the seller-dominated conditions of recent years. However, elevated mortgage rates continue to limit affordability, meaning improved negotiating power does not necessarily translate into lower monthly housing costs.
The shift could matter to Arizona residents looking to buy or sell, as well as people considering relocation or real estate investment in the Southwest. Still, local conditions vary by city, neighborhood, price range and property type.
Realtor.com Market Clock Shows a Buyerward Shift
Realtor.com’s third-quarter 2026 Market Clock report placed both Phoenix-Mesa-Chandler and Tucson at the 4 o’clock position, described as a “late balanced, loosening” market. The national housing market received the same reading.
This classification suggests the market is moving toward buyers, but neither side necessarily holds a decisive advantage. Buyers may have more room to negotiate on price, closing costs, repairs or other terms, depending on the property and local competition.
The report does not classify Phoenix or Tucson as outright buyer’s markets. Its broader findings show that many U.S. metro areas are moving toward more buyer-friendly conditions, although the pace and degree of change differ across regions.
Mortgage Rates Continue to Pressure Affordability
Mortgage rates remain a major obstacle for prospective buyers. Realtor.com’s report recorded the average 30-year fixed mortgage rate at 7.40% in mid-October, after rates rose above 7% in late September.
The increase in borrowing costs reduces how much a household can finance while keeping its monthly principal-and-interest payment within a fixed budget. Realtor.com estimated that the rise from 6.66% in late August to 7.40% in October reduced purchasing power by about 7.2% for a buyer budgeting $2,000 a month for principal and interest—equivalent to more than $22,000 in home value.
That pressure complicates the market’s shift toward buyers. A household may have more opportunities to negotiate a purchase price while still facing a higher monthly payment than it would have faced when rates were lower. Actual payments also depend on the down payment, loan terms, taxes, insurance and other housing costs.
Zillow Data Shows Phoenix Home Values Easing
Zillow’s September 2026 market report put Phoenix’s typical home value at $440,821, down 1.1% from a year earlier and 0.4% from August. The report also showed the number of homes available for sale increasing 4.4% year over year.
Phoenix home sales were down 5.1% compared with September 2025, while typical rent in the metropolitan area reached $1,720, up 1% from a year earlier.
Together, the figures point to a market where home values have softened and inventory has expanded, even as housing costs remain a concern. The data does not mean every property is losing value: prices can move differently depending on location, property type, condition and price range.
Zillow’s typical home value is a modeled measure of home values, not the same statistic as the median price of homes that actually sold during a given month. Comparing the two without noting that distinction can create a misleading picture of market performance.
Greater Phoenix Sales Activity Slows
September figures from Phoenix REALTORS also showed a slowdown in Greater Phoenix’s housing activity. Closed sales fell 4.9% year over year, while pending sales dropped 40.1%. The region’s inventory increased 6.7%, even as new listings declined 3.7%.
The median sales price for a single-family home across Greater Phoenix was reported at $475,000, down 2.1% from a year earlier. In the city of Phoenix, the median sales price fell 3.5%, from $502,500 to $485,000.
Scottsdale followed a different pattern. Its closed sales rose 2.2% in September, and year-to-date closed sales were up 10.6% through the first nine months of 2026. Its year-to-date median price increased 5.5%, from $1.185 million to $1.25 million.
These figures illustrate why a broad metro-level trend should not be treated as a guarantee for every community. Scottsdale’s higher-priced market, for example, can perform differently from Phoenix overall. Buyers and sellers should review data for the specific neighborhood and property type they are considering.
What the Shift Means for Buyers and Sellers
For buyers, a more balanced market may create opportunities to compare more listings, negotiate repairs or closing costs, and take additional time to assess a property. But mortgage rates and total ownership costs remain important when setting a budget.
For sellers, realistic pricing and property presentation may become more important as buyers gain more options. Depending on the home and competition nearby, sellers may need to consider concessions or other terms to attract qualified offers.
Investors and people considering a move to Arizona should evaluate local rents, financing costs, taxes, insurance, employment prospects and long-term plans rather than relying on a single market indicator.
The available data does not establish that these Arizona trends are directly causing migration from Texas or that they will produce a particular investment outcome. Such conclusions would require separate, reliable evidence on migration and local market conditions.
Key Takeaway
Phoenix and Tucson are moving toward more balanced housing conditions, according to Realtor.com’s third-quarter Market Clock report. Softer home values and higher inventory in parts of the Phoenix market may give buyers more negotiating room, but rising mortgage costs continue to constrain affordability.
The market is shifting, not uniformly declining. Buyers, sellers and investors should use current local sales data and a full assessment of financing and ownership costs before making decisions.
Data sources: Realtor.com Economic Research, Zillow Research and Phoenix REALTORS. Market figures reflect the reporting periods specified above.