Cooling Inflation Brings New Hope for Arizona’s Spring Housing Market

By Olga Boyke - Your Trusted Arizona Realtor

The latest inflation report just delivered something the real estate world has been waiting for. Relief. Inflation cooled to 2.4% in January, lower than expected, and mortgage rates responded almost immediately, dropping to around 6.04%.

While this may seem like just another economic headline, here in Arizona, this shift could have a real and meaningful impact. Improving affordability and stabilizing rates could bring more buyers back into the market and create new opportunities as we head into the spring season.

Lower Inflation Helps Improve Mortgage Affordability

Inflation plays a major role in where mortgage rates go. When inflation slows, mortgage rates often follow. That is exactly what we are beginning to see.

Even a slight drop in rates can significantly reduce monthly payments or increase what buyers can afford. Combined with slower home price growth and rising incomes, affordability is gradually improving. This is especially important in Arizona, where many buyers paused their plans when rates climbed higher over the past two years.

Spring 2026 Could Bring More Buyers Back

The housing market started the year slowly. Home sales, mortgage applications, and pending contracts were all lower than expected in January.

But this is not unusual. Early-year markets are often quieter, and improving economic conditions can quickly change momentum.

As inflation cools, incomes rise, and rates stabilize, more buyers may regain confidence. Spring is traditionally the busiest real estate season, and this year could bring renewed activity across Arizona.

What This Means for Arizona Buyers and Sellers

For buyers, this creates opportunity. Lower rates and more stable prices mean entering the market may finally feel realistic again. As affordability improves, more buyers are expected to return, especially as we move deeper into the spring season.

For sellers, this is also positive. When more buyers enter the market, demand strengthens. That helps support home values and creates better selling conditions compared to the slower pace we experienced last year.

Arizona remains one of the most desirable states for relocation, and improving affordability only strengthens its position.

The Federal Reserve Is Still Watching Closely

It is important to understand that one inflation report does not change everything overnight.

The Federal Reserve is still monitoring future data before making major decisions on interest rates. January data is encouraging, but February and March will provide clearer direction.

This means the market is improving, but timing and strategy still matter.

Cooling inflation is an important step toward a healthier housing market. It signals improving affordability, stabilizing conditions, and the potential for more activity in 2026.

If you are considering buying or selling in Arizona, this shift could create new opportunities. Understanding timing, mortgage trends, and local demand will be key to making the best move, and I will continue sharing updates to help you stay ahead of the market.