Arizona Housing Market: Why 2026 Could Be the Comeback Year

by Olga Boyke–Your Trusted Arizona Realtor

After a long stretch of sluggish activity, there is finally good news on the horizon. According to the latest forecast from the National Association of REALTORS (NAR), 2026 may be the year the housing market wakes back up, and Arizona buyers and sellers need to pay attention.

Nationwide, NAR Chief Economist Lawrence Yun is projecting a 14 percent jump in home sales next year, along with a 4 percent increase in home prices. And while this is a national forecast, many of the same forces behind the rebound such as job growth, improving mortgage rates, and rising demand are already shaping what we are seeing right here in Arizona.

Why 2026 Looks More Promising

A few major trends are building momentum:

1. Mortgage rates are slowly easing

After hovering near 7 percent for most of this year, rates are beginning to drift down. Yun expects average rates to reach about 6 percent in 2026. It is not a dramatic drop, but even a modest improvement can unlock demand in markets like Phoenix, where buyers have been waiting for more breathing room.

2. More buyers are reentering the market

Mortgage applications are up nationally, 31 percent higher than a year ago, showing that buyers are eager to return. In Arizona, I am seeing the same pattern: more activity at open houses, more serious inquiries, and more buyers preparing to make their move.

3. Job growth continues to support housing

NAR expects 1.3 million new jobs nationally in 2026. Arizona remains a job growth powerhouse, especially in tech, healthcare, and advanced manufacturing. More jobs lead to more demand, which strengthens the housing market.

4. Prices will keep rising, but at a healthier pace

NAR forecasts a 4 percent increase in home prices in 2026, following a 3 percent rise in 2025. Arizona aligns closely with this outlook. Prices are appreciating steadily rather than surging uncontrollably like they did from 2020 to 2022.

Sellers continue to benefit from strong equity.
Buyers should be aware that waiting may only make entry more expensive.

A Market Split Between ‘Haves’ and ‘Have Nots’

One of the biggest storylines nationally and especially in Arizona is the widening gap between first-time buyers and repeat buyers.

First-time buyers are struggling the most, now making up a record low of 21 percent of all purchasers. With the median first-time buyer age rising to 40, affordability pressures remain significant. High rents, student loans, and childcare costs continue to delay homeownership.

Repeat buyers, especially boomers, dominate the current market. Many come with cash or substantial equity, allowing them to move more easily.

Arizona reflects this divide clearly:

• Cash buyers remain strong in Scottsdale, Paradise Valley, and several Phoenix neighborhoods

• Lower-priced inventory remains tight

• Well-priced entry-level homes still attract immediate competition

Price Reductions Are Back and Sellers Need to Adjust

Yun notes that sellers nationwide are relearning the importance of accurate pricing. MLS data shows the following patterns for homes that sit on the market:

• 0 to 14 days: approximately 5 percent price cut

• 31 to 60 days: approximately 7 percent price cut

• More than 120 days: approximately 14 percent price cut

Arizona sellers should take this seriously. Overpricing will cost both time and money. Homes priced appropriately from day one continue to attract strong interest and sell efficiently.

Arizona’s housing market spent most of 2025 in a holding pattern, but 2026 is shaping up to be a year of renewed momentum. Mortgage rates are beginning to ease, buyers are gradually returning, and prices remain steady across much of the state. Job growth continues to support demand, and more inventory is slowly entering the market. Instead of the frenzy we saw in recent years, the pace is becoming healthier and more predictable, giving both buyers and sellers more room to make smart, intentional decisions.

2026 may offer one of the best opportunities we have seen in a long time. Portable mortgages are still under review, but the larger focus on flexibility is already shaping the market. Knowing what tools you can use now, including assumable mortgages, will help you move with confidence.

Schedule a consultation with me for personalized guidance and a clear plan for your next step. For ongoing updates on Arizona housing trends, interest rates, and policy changes, follow me on my social channels to stay informed and make confident decisions.