For most of the summer, the Valley’s housing market moved slowly in one direction. Fewer homes were for sale, more buyers were showing up, and prices were holding steady. September changed that. Mortgage rates jumped from 6.75% in late August to 7.57% by early October, and many buyers stepped back almost immediately. Fewer homes went under contract, more homes sat on the market, and by mid-October every one of the Valley’s 18 largest cities had shifted in buyers’ favor.

Prices haven’t moved much, at least not yet. The typical home sold for $450,000 in September, the same as a year ago. What changed is who has the upper hand in negotiations. Rates have eased a little since then, to 7.33% by mid-October, but it’s too early to tell whether that’s enough to bring buyers back.

What’s Happening

• Buyers pulled back hard. 6,057 homes were under contract in September, meaning a buyer and seller had agreed on a deal that hadn’t closed yet. That’s 10% fewer than in August and 10% fewer than last September. In our last update, that number had slipped just 2% below the year before. Two months later, the drop is five times bigger.
• More homes are for sale than a year ago. 25,251 homes were for sale, up 8% from August and 4% from last September. Back in June, there were 5% fewer homes for sale than the year before.
• More sellers listed, especially at the high end. 9,350 homes came on the market in September, up 15% from August and 3% from a year ago. The average asking price of those new listings rose 11% in a single month, while the typical (median) asking price rose just 3%. That gap tells us many of the new listings were expensive homes coming back on the market after the summer.
• Fewer homes sold, and it’s not because of the calendar. 5,672 home sales closed, 7% fewer than last September. Both months had the same number of business days, so this is a real drop. Most of it came from brand-new homes: county sale records show sales of new homes by builders fell about 16%, while sales of existing homes fell about 2%.
• The market is moving toward balance. At September’s pace, it would take about 4.45 months to sell every home currently for sale. That’s up from 4.22 months in August and 3.98 a year ago. The longer that number gets, the more choice buyers have.
• Prices held flat. The typical (median) home sold for $450,000, exactly the same as last September. The typical price per square foot was $251.50, down just 0.1%. The average sale price was $586,246, up 2%. (More on why those two numbers differ below.)
• Homes aren’t sitting longer, yet. Homes took an average of 86 days to sell, down from 89 in August and the same as a year ago. Sellers received, on average, 97.36% of their asking price, identical to last September.

Mortgage Rates Did This, and It Happened Fast

The Cromford® Report, the Phoenix housing data service we rely on for much of this update, put it plainly: mortgage rates were the big story in September. The rate on a 30-year fixed mortgage climbed from 6.75% on August 27 to 7.57% in early October, according to Mortgage News Daily. On a typical $450,000 home with 20% down, that adds roughly $200 to the monthly payment, an 8.5% increase in about five weeks.

Buyers felt it right away. The number of homes going under contract usually dips a little in September, but Cromford reports this was the biggest September drop since 2022. Buyers who already had a deal in place felt it too. Cromford says more deals are falling apart before closing than at any point in the past three years, the last time rates peaked.

Rates topped out at 7.61% on October 5 and eased to 7.33% by mid-October. That’s still well above where they were in August, and buyers hadn’t come back yet. As of October 15, about 6,400 homes were under contract, 14% fewer than a year earlier.

More Homes for Sale Doesn’t Mean Too Many Homes

“More homes for sale, fewer homes sold” is the kind of headline that makes people nervous. Here’s the context.

The 4.45-month figure above compares the homes for sale against just one month of sales, so a single slow month makes it jump. Cromford also measures it against a full year of sales, which smooths out the month-to-month swings. By that measure, the Valley had about 135 days’ worth of homes for sale in September, actually a little less than the 137 days it had last September. More homes are for sale, but more homes also sold over the past year, so the market isn’t as crowded as the raw count suggests.

What did change is how fast it happened. The number of homes for sale rose 8.3% in September, more than double the 3.8% increase in September 2025. Some of that is normal, since sellers come back after the summer, especially in higher price ranges. Combined with fewer buyers, though, it’s shifting the market toward balance faster than we’ve seen in a while.

One more thing to keep an eye on: more homes are being sold under financial stress. About 5.4% of homes under contract are being sold either by owners who’ve fallen behind on their mortgage or by banks that have already taken the home back, up from about 2.8% a year ago. That’s still low by historical standards, and Cromford describes it as a yellow light, not a red one.

Prices Held Flat. After Inflation, They Slipped.

The typical home price of $450,000 hasn’t moved in a year. But everyday costs rose 3.7% over the same 12 months, according to the government’s September Consumer Price Index. So a home that sells for the same price as last year is actually worth about 3.6% less once you account for inflation. Flat isn’t the same as steady.

You may see a headline that price per square foot just hit its lowest level since April 2023. That’s true, and it sounds worse than it is. Cromford’s mid-October figure of $250.34 per square foot is just 1% below a year ago, and it was the smallest of three monthly declines in a row. Cromford expects prices to hold steady or rise slightly over the next month, and says the summer dip appears to have hit bottom.

Why the “average” and “typical” price tell different stories this fall. The typical (median) price is the one right in the middle: half of homes sold for more, half for less. The average adds up every sale and divides, so a handful of multimillion-dollar homes can pull it way up. In September, the average sale price was about 30% higher than the median. In June, it was about 37% higher, because more luxury homes were selling then. By mid-October, those high-end sales were coming back. Homes priced at $1 million or more made up 10% of sales and a third of all the money spent on homes, which pushed Cromford’s average price per square foot up 4.2% in a single month while the typical price barely moved. If you see a big jump in “average price” this fall, that’s expensive homes selling again, not your home gaining value.

You may also see a different typical price quoted this month. Maricopa County’s own property sale records show a median of $475,000, down 2.8% from a year ago. That number includes brand-new homes sold directly by builders, many of which are never listed in the MLS (the Multiple Listing Service, which is the database real estate agents use to list homes for sale), so it runs higher. Looking only at existing homes, the county’s median was $455,000, down 3.2%. Different sources, same direction: prices are flat to slightly lower.

Every Major City Shifted Toward Buyers

Cromford scores each city on how much leverage buyers and sellers have, using a scale called the Cromford Market Index. A score of 100 means the market is balanced. Above 100, sellers have the edge: homes sell faster and buyers face more competition. Below 100, buyers have the edge: more choice and more room to negotiate.

As of October 15, the average score across the Valley’s 18 largest cities was down 14.5% from a month earlier, the most buyer-friendly reading since November 2023. Every one of those cities had more homes for sale than a month before, and 17 of the 18 had less buyer activity.

Five cities still favor sellers, five are balanced, and eight favor buyers. In our August update, it was nine, three, and six. The City of Phoenix itself slipped just below balanced, to 99.5.

Here’s where we need to update something we told you. In August, the strongest part of the market was the high end, and Paradise Valley’s score had jumped 34% in a single month. Two months later, Fountain Hills (down 34%) and Paradise Valley (down 32%) are leading the shift toward buyers. Over the summer, we noted that many luxury sellers take their homes off the market in the hottest months and put them back up in late September. They did, in force. Fountain Hills has 25% more homes for sale than a month earlier and Paradise Valley 21% more, while buyer activity dropped 18% in both. Both towns still favor sellers, at 115.3 and 127.3, but their lead has shrunk quickly.

Scottsdale is the exception. It remains the strongest seller’s market in the Valley at 144.2, and it’s the only major city where buyer activity actually grew over the past month. At the other end, Tempe (down 20%) and Maricopa (down 16%) shifted furthest toward buyers after the two luxury towns, and Queen Creek (45.8) and Maricopa (41.7) remain the most buyer-friendly cities on the list.

Are Scottsdale and Paradise Valley Prices Really Rising?

If the luxury towns are cooling, what’s actually happened to home values there? Cromford took a close look this month at whether homes in Scottsdale, Paradise Valley and nearby areas are really worth more, or whether more expensive homes are simply selling. The answer depends on whether you look back three years or one. We’ve broken it down in a companion post, Are Scottsdale and Paradise Valley Home Prices Really Going Up?, including which ZIP codes gained the most and how those gains compare with inflation.

For Sellers

This fall, you’re competing with more homes for sale and fewer buyers, and those buyers are facing higher monthly payments than they were in August. That doesn’t make it a bad time to sell. Homes aren’t taking longer to sell than they did a year ago, and sellers are still getting about the same share of their asking price. But the price you start with matters more than it did a few months ago.

The honest caveat: pricing your home based on what a neighbor got last spring is likely to cost you your first few weeks on the market, which is when buyers pay the most attention. We’d rather help you price from today’s numbers than spend that time testing a price buyers won’t pay.

Curious what your home is actually worth in today’s market? Get a free home value estimate and let’s talk through your options.

For Buyers

More homes to choose from, fewer buyers competing with you, and sellers who know the market has shifted. That gives you more room to negotiate on price and terms than you’ve had in a while, especially outside Scottsdale and the other cities that still favor sellers.

The honest trade-off is the interest rate. A 7.33% mortgage costs real money every month compared with the 6.75% available in late August. What you get in exchange is more choice, more time to decide, and more room to negotiate. Before you start making offers, ask your lender to show you how a change in rates affects your monthly payment.

Ready to see what’s out there? Start browsing homes in the Valley or reach out, and we’ll help you figure out where you’d get the most value right now.

What We’re Watching

• Whether lower rates bring buyers back. Rates eased from 7.61% to 7.33% in the first half of October. If the number of homes going under contract stops falling over the next few weeks, September may turn out to be a short-term reaction to the rate jump rather than the start of a longer slowdown.
• Fewer sales in October. Fewer deals signed in September means fewer completed sales in October and November. October also has one fewer business day than last year, which on its own should mean about 4.5% fewer sales. Expect next month’s sales number to look weak, and read it with that in mind.
• Expensive homes coming back on the market. Many high-end sellers have put their homes back up for sale. Whether those homes sell or sit will decide whether Paradise Valley and Fountain Hills still favor sellers heading into winter.

Sources

ARMLS® STAT Report, data for September 2026, published October 6, 2026. ARMLS® COPYRIGHT 2026. View report

The Cromford® Report, Maricopa Affidavit Statistics for September 2026, October 3, 2026

The Cromford® Report, Market Summary for the Beginning of October 2026, October 4, 2026

The Cromford® Report, CMI Large City Ranking Table, October 15, 2026

The Cromford® Report, Mid-Month Pricing Update and Forecast, October 16, 2026

Mortgage rate figures: Mortgage News Daily, as reported by The Cromford® Report

U.S. Bureau of Labor Statistics, Consumer Price Index – September 2026, October 14, 2026

Lianne Russo Liddell is an Associate Broker, REALTOR® and co-owner of The Russo Fadler Group at Realty ONE Group, serving buyers and sellers throughout Greater Phoenix. Learn more at therfgaz.com.

The Russo Fadler Group at Realty ONE Group helps buyers and sellers throughout Greater Phoenix make informed real estate decisions with clear guidance, strong advocacy and a fiduciary-first approach.