Heading into 2026, Arizona’s housing market feels promising. And as we say goodbye to 2025, a snapshot of housing today looks very different even from just a few years ago. What we’ve entered is a new normal that, in many ways, is more stable and balanced than what we’ve experienced recently. This market stability makes for positive momentum for buyers and sellers in 2026 — a much-welcomed shift after a year driven by uncertainty.

As we adjust to what is expected of today’s market and the evolving expectations of buyers and sellers, perspective is essential. The reality is that interest rates are consistently settling near the 6% range, with current rates hovering around 6.3%. While this may feel discouraging to some, hindsight is positive when we reflect on the past several years of staring down historically high interest rates in the 7% range with little decline, which impacted both national and local housing behaviors.

Throughout 2026, interest rate cuts are forecasted to be slow but steady, and while not dramatic, even these small shifts can make or break prospective buyers and sellers seeking to enter or return to the housing market. 

Inventory also represents a rebalancing for Arizona housing. A traditionally healthy Arizona market once sat near 35,000 active listings, but the housing frenzy of recent years created a dramatic shift in 2021. Fast forward to today, and there are roughly 27,000 homes on the Valley market. While below the historical norms we expect, this number is steadily trending upward, which is a welcome sign for buyers looking for more options.

Buyers and sellers had no shortage of external pressures that influenced their home decisions in the past year, nationally and here in the Valley. Evolving tariffs and the expectations around them, global tensions, a prolonged government shutdown and a notable pull-back — especially Canadian homeowners selling at higher-than-usual rates — were some of the drivers of this noticeable hesitancy in housing. 

Demand from buyers is still present but delayed. The median age for first-time homebuyers is now 40 years old, according to the National Association of REALTORS®, with patterns showing that many are choosing to live with family or pursue lower-cost rental options to save toward homeownership. With fewer cash investors making up Arizona’s market now, buyers have a greater opportunity to get involved in 2026.

Buyers and sellers should also understand why flexibility matters as the market recalibrates. Seller concessions can provide buyers entering the market in early 2026 with opportunities for closing cost assistance, rate buydowns, repair credits and other negotiated benefits that help keep them competitive. In many cases, these concessions give buyers the edge to secure the home they want.

Economic expansion will continue to drive housing activity across the Valley in 2026 as major technology employers, semiconductor manufacturing growth and infrastructure investments create economic environments and large-scale growth in Arizona to match the growing workforce and their families.

This influx is expected to influence both rental and residential home markets, notably in the developing areas of the North Phoenix corridor and the Southeast Valley. 

Buyers and sellers have been waiting patiently for the time to make a move, and when the opportunity strikes, real estate professionals must do the same. This is the time to embrace the hyperlocal expertise, clear communication, efficiency and professionalism that local Realtors represent as trustworthy guides who support homeownership goals across Arizona.

Many are searching for the right moment to jump back in, and early 2026 will be a telling indicator of what’s to come as Arizona’s housing market looks to find its footing and settle into a sustainable cycle after the rollercoaster ride we’ve experienced since the beginning of the 2020s. Realtors are here for Arizona’s communities to support smart, confident decisions in the home process that position you to make your move. 

For more information, visit www.aaronline.com.

Sindy Ready is 2025 president of Arizona REALTORS®.