By Mike Bodeen · 29 December 2025
*Cromford Market Index Values Showing Mostly All Green*
The annual sales rate for the Phoenix Metro residential market (as we all know) has been in the basement for the past three years. The sales market had started its decline in July of 2021. Since October of 2024, however, the market has been inching up. (emphasis on “inching”)
Don’t misunderstand, we’re still experiencing a “buyer’s market.” This will continue into 2026. But the Cromford Market Index Values (which is a leading indicator of future pricing), has moved higher in 17 of 18 major cities. Interestingly, the one city that it is not in a current green direction, is the most expensive of our cities – Paradise Valley. (See Chart Below)
Reasons for increased sales, per the Cromford Report, are twofold: Supply has declined more than usual between November and December and demand has recovered a little momentum (though it is still a long way below normal).
The Wall Street Journal (WSJ) had a sobering article recently that we’ve commented on a number of times in the past about the number of homeowners with radically low mortgage rates. The WSJ reported that “nearly 30 million households have mortgage rates at 4% or below-54% of primary mortgage holders.” The Journal commented that “this “lock-in” effect has helped freeze the housing market for three straight years. Many of those who want to move don’t feel it’s worth it to buy a home and take on mortgage rates that have doubled.”
Though rates have fallen in recent months, they’re still not low enough to induce sellers to sell and give up their low interest mortgage. If you combine that with higher pricing, it’s not hard to understand the housing dilemma our country finds itself in.
For buyers in Phoenix Metro, news that sales are increasing can’t be great news. Unless there comes a significant drop in rates and/or prices, we will continue to stagnate.
Something’s gotta give.
Mike Bodeen
Market data referenced in this article comes from The Cromford Report.