OCTOBER 2026 - THE MORTGAGE RATE REBOUND

Each month as I write this newsletter, I ask myself, ‘What is on the mind of the average homeowner, and what do they need to know?’ This month, I can’t think of anything more notable than the recent reversal in mortgage rates. After falling below 6% in February, rates have climbed to 7.59% as of October 7th, weakening an already fragile housing market.

Normally, I’d begin with supply, but today we’ll start with demand, because that’s where we’re seeing the greatest impact. Earlier this year, lower rates helped buyer activity recover, outpacing the previous three years. But as rates climbed, buying power diminished and demand deteriorated. September listings under contract fell 11.2% year over year to 6,565, the lowest September reading in over 15 years.

On the supply side, Greater Phoenix has actually added fewer new listings this year than in 2025, yet active inventory is roughly 5% higher. Why? Because fewer buyers are absorbing the available homes, causing listings to accumulate. Meanwhile, September closed sales declined 4.8%, also reaching their lowest September level in over 15 years.

Now, I recognize these numbers may leave homeowners feeling unsettled, but I want to reiterate something I’ve said before. The health of a housing market isn’t determined by any one statistic. It’s the relationship between supply, demand, and the financial circumstances of buyers and sellers. Most homeowners aren’t in distress and don’t NEED to sell. If selling becomes too difficult, some simply withdraw their homes, reducing supply. Likewise, lower mortgage rates could bring buyers back, increasing demand.

The market is dynamic, not static. We know where we stand today, but that doesn’t mean we know where we’ll be next year. Of course, the logical question is what this means for home values. While supply and demand certainly matter, your home’s value is a hyper-local question. Greater Phoenix trends provide the backdrop, but your neighborhood and comparable homes tell a much more specific story.

If you’re considering buying or selling and would like to discuss your specific situation, please give me a call.

I’d love to talk nerdy with you! :)