March 2026 Arizona Real Estate Update

Home Prices Up - Interest Rates Down

Home prices continue to increase at a steady pace as interest rates have dropped in recent months!
As we head into the busiest home buying season of the year, the Arizona housing market is showing signs of stabilization and improved affordability. After a slower market through much of 2024 and early 2025, both buyers and sellers are beginning to find more balance.

Here’s what’s happening right now in the market.

Inventory Is Finally Back to Normal
For the first time in over a decade, housing inventory in the Greater Phoenix area has returned to what economists consider a normal level. After nearly 14 years of chronic housing shortages, the number of homes available for sale has increased significantly.

Across Arizona there are currently 45,671 active listings, an 8.5% increase compared to last year. With about 5.84 months of inventory, the market is considered balanced, with six months typically representing equilibrium between buyers and sellers.

Buyer Demand Is Improving
Buyer demand is still slightly below historic norms but is steadily improving. Contracts currently in escrow are 7% higher than this time last year, and activity is expected to peak over the next few months as the spring buying season ramps up.

Mortgage rates have also stabilized, which has helped bring buyers back into the market. Conventional mortgage rates have remained in the low 6% range, while FHA and adjustable-rate mortgages are sitting in the mid-5% range.
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Home Prices Are Holding Steady and Icreasing Slightly.
The median home price in Arizona is now $444,500, up slightly from $440,000 last year. That’s roughly a 1% year-over-year increase, showing that while prices are no longer rising rapidly, they remain relatively stable.

For homes priced below $800,000, prices are actually about 4% lower than a year ago, helping improve affordability for many buyers.

When combined with lower mortgage rates compared to last year, the average monthly payment on a median-priced home is about 14% lower than it was a year ago. For example, a $2,500 monthly payment in early 2025 would now be closer to $2,150 for the same home.

Some Areas Favor Buyers More Than Others
The overall market is slightly leaning toward buyers, but conditions vary depending on the city.

Central Phoenix areas remain closer to a seller’s market, while many growing cities on the outskirts — including San Tan Valley, Buckeye, Goodyear, Gold Canyon, and Surprise — currently have more inventory available, giving buyers additional negotiating power.

Interestingly, Apache Junction is currently seeing stronger demand, ranking as one of the stronger seller markets in the region.

What This Means for Buyers
Buyers currently have more choices and slightly better affordability compared to last year. With inventory levels improving and mortgage rates stabilizing, many buyers are finding opportunities that didn’t exist 12–18 months ago.

Waiting for dramatically lower prices or rates may not make a large difference. In fact, analysts estimate that waiting another 3–6 months might only reduce a typical payment by around $30 per month.

What This Means for Sellers
For sellers, the key to success in today’s market is pricing and presentation.

As more listings hit the market during the spring season, buyers are becoming selective. Homes that are priced competitively and show well are still attracting strong interest, while homes priced too aggressively may sit longer on the market.

Today’s buyers are looking for the best value for the money, not necessarily the home with the most upgrades.

The Bottom Line
The Arizona housing market in 2026 is transitioning toward balance. Buyers have more options and improved affordability, while sellers who price their homes correctly are still seeing successful sales.

As we move deeper into the spring buying season, activity is expected to continue increasing over the next several months.

If you’re thinking about buying or selling this year, understanding the local market conditions can make a big difference in your results. If you or anyone you know has a real estate need, buying or selling call or text me with their name and number.

DONALD KEYS
Selling Homes Since 2006
HomeSmart
​(602) 750-1744 

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