Interest rate increased to 6.36% - Housing Market Update

September brought renewed energy to the Maricopa County housing market. We saw 5,933 homes close—up 6.3% from last year. The resale market is leading the charge with an impressive 11.5% jump in activity, especially at higher price points after a slower summer.

Meanwhile, new home closings fell 8.9%, showing builders are facing headwinds. The median sales price hit $488,772, up 3.6% year-over-year, with resales at $470K and new homes at $532K.

Interest rates remain the wild card in today's market. On September 16th, rates hit their lowest point of the year at 6.13%—right before the Federal Reserve cut their base rate.

But here's the twist: since then, rates have jumped back to around 6.36%. This unexpected swing cooled demand after a strong first half of September. Buyers who locked in rates before September 17th are in great shape, but those who waited are now facing higher monthly costs.

The Case-Shiller Index reveals a tale of two markets. Nationally, we're seeing broad weakness in the South and West.

Phoenix is down 0.79% month-over-month, ranking 18th out of 20 major cities. Year-over-year, Phoenix is down 0.9%, compared to the national average of +1.68%.

Cities in the Northeast and Midwest are outperforming—New York is up 6.4% and Chicago up 6.2%—while Southern markets like Tampa (-2.8%) and Miami (-1.3%) are struggling. The contrast is clear: Phoenix sales volumes are rebounding, but pricing power is still weaker than the national average.

Let's take the long view. If you look at the median sales price of homes sold over the last 50 years, the chart is clear: despite downturns, the long-term trend has always been upward. This isn't the first slowdown we've seen.

From the early 1980s recession, to the dot-com bust, to 2008, and even COVID—every single slowdown eventually ended in a recovery. Sales always come back, and history shows the housing market rebounds stronger over time. While today's market may feel slower, the data tells us this is part of a cycle—and recovery always follows.