Hiya,
If you took a moment to reset over the holidays, good—because the Phoenix real estate market as I write this is resetting also in 2026.
I’m excited by the shift we’re seeing. For the last few years, many have been playing a waiting game, assuming something was "wrong" with the market because rates were higher.
But here’s the reality: nothing is wrong. We’ve just been in a transition. As we kick off January, the "whiplash cycles" of the early 2020s are fading, and a more balanced market is taking its place.
In this week’s newsletter (3 min read):
🪤 The "Suppressed Demand" Trap: Why buyers and sellers are feeling stuck.
♟️ The 2026 Strategy: How to use the current "Buyer’s Opportunity" to your advantage.
📉 Rate Watch: Where mortgage rates sit this week.
The Great Phoenix Standoff
The biggest issue affecting both buyers and sellers right now is suppressed demand.
For Sellers: Many feel "locked-in" to the ultra-low rates they secured years ago. They want to move, but trading a 3% rate for today's market reality keeps inventory tighter than historical norms.
For Buyers: Inflation and general cost-of-living increases are squeezing monthly budgets. Even those who can afford to buy are feeling "fragile" about stretching their finances, leading many to wait for a "perfect" moment that may never come.
The result? A market that feels slower, even though the underlying Phoenix economy—driven by semiconductor and healthcare hubs—is actually growing faster than the rest of the nation.
The Solution: Strategy Over Speed
The "red-hot" days of naming any price and getting ten offers in an hour are gone. In 2026, success depends on strategy.
For Buyers: The current market index in Phoenix is around 80, which signals a buyer’s opportunity. Because demand is suppressed, you finally have the room to negotiate.
Don’t wait for the absolute "bottom": By the time prices hit the bottom, the opportunity has usually already passed.
Ask for concessions: Negotiate for seller credits to buy down your interest rate or cover closing costs. This can save you hundreds on your monthly payment without needing market rates to drop further.
For Sellers: Inventory is slowly climbing, meaning you have more competition now.
Condition is King: Turnkey homes with updated interiors and energy-efficient features are winning premium prices.
Offer Incentives: Consider offering a temporary rate buy down for the buyer. It’s often more effective than a flat price cut in today’s environment.
Mortgage Rate Watch: January 10, 2026
Rates Plummet to 3 Year Lows, But There Are Caveats
Think of mortgage rates like the price of a product in a store. That price is mostly decided by investors buying and selling Mortgage-Backed Securities (MBS)—which are essentially giant bundles of home loans. When big investors decide to buy a huge amount of these bundles at once, it creates a "buying surge" that forces mortgage interest rates to drop.
That is exactly what happened this Thursday. In a surprise move, an announcement was made that the government-backed agencies (Fannie Mae and Freddie Mac) would buy a massive $200 billion worth of these mortgage bundles. This "shopping spree" sent the market into a frenzy, causing mortgage rates to plummet to their lowest levels since September 2022.
What this means for you: While the news initially brought rates to a one-year low, the market is currently very "bumpy." Because the news was so sudden, some lenders are already moving their rates back up slightly as they try to find their footing. If you’ve been waiting for a dip to buy or refinance, this is the most significant window we’ve seen in a long time—but you’ll want to stay in close contact with your lender, as these "sale prices" are moving by the hour.
Note: Rates vary based on credit score and down payment.
Final Thoughts
The Phoenix market isn't crashing; it's recalibrating. We are moving toward a more balanced state where strategy matters more than speed. If you are prepared and strategic, there is a meaningful window of opportunity before the spring rush begins.
Are you staying in your current home because it still serves your life and your family—or are you staying mostly because you’re comfortable with your 3% rate and hesitant to trade certainty for a better lifestyle?
Click the link👇 to see what your home is worth or start searching for your future home