The Greater Phoenix Area and Mesa
Mortgage rates were the big story in September, and the 30-year fixed rate
now stands at 7.57%, according to Mortgage News Daily. It was 6.75% on
August 27, so buyers are facing an 8.5% increase in their monthly mortgage
repayments over the last 5 weeks. That represents an extra $200 per month on
an 80% loan on the typical $450,000 home. This rise in costs is causing agreed
contracts to fall through at the highest rate in 3 years, when mortgage rates last peaked.
Some buyers appear to be leaving the market, as new contracts are
down 11% year on year and 10.3% from August.
Pricing held up a little better than we expected a month ago. The average price
per square foot edged up 0.8% to $293.61, though its annual gain narrowed to
2.2% from 3.8% a month ago. The median sales price rose 1.0% to $450,000, the
same as in September 2025.
Sellers achieved 97.36% of list price, a little better than last month and
identical to last year. Looking ahead, the fall in pending and under-contract
counts points to fewer closings in October and November than a year ago, and
rising supply gives buyers more choice and more room to negotiate. We expect
pricing to remain soft through the rest of the year, although a growing
contribution from the luxury segment may support the average price per square
foot.
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