Market Update: What’s Fueling the Market Right Now?

As of April 2025, two major factors are shaping the Arizona real estate market: interest rates and consumer sentiment.

Let’s break it down:

🏦 1. Interest Rates Are Driving Buyer Decisions

The number one factor influencing market activity today is — no surprise — interest rates. Recently, the 10-year Treasury yield dipped below 4%, a strong signal that mortgage rates may ease soon.

Since interest rates typically follow the trend of the 10-year Treasury, this drop is a positive sign for potential buyers. If rates fall further, especially into the mid-5% range, we could see a surge in demand.

🧠 2. Consumer Sentiment Is Cooling the Market

While dropping rates are great news, they’re not enough on their own to light a fire under demand. Consumer confidence remains cool, likely due to:

• Ongoing economic uncertainty

• Constant media coverage of market instability

• Upcoming changes in lending rules or regulations

In short, buyers are cautious — and that’s having a real impact on activity.

🔮 What Happens If Rates Drop?

If mortgage rates dip further in the coming months (e.g., down to 5.9% by August), we could quickly shift from a balanced or buyer’s market back to a seller’s market.

This means:

• Today’s buyers have more negotiating power

• Tomorrow’s buyers may face more competition

✅ Final Tip: Don’t Wait Too Long

Right now, the market is slightly leaning toward buyers, with less competition and more room for negotiation. If you wait for rates to drop, you may end up in a bidding war later.

So if you're considering a move — now might be the smartest time to act.