Rates Take Center Stage

Mortgage chatter has hit a fever pitch this September. You’ve got headlines shouting about falling rates, YouTube talking heads downplaying the impact, and buyers wondering if this is finally the opening they’ve been waiting for. The noise is loud. But here’s the thing, what really matters is how these numbers actually ripple through the Arizona real estate market. Let’s cut through the buzz and talk about what’s happening on the ground right now.

Quick Points

• Mortgage rates dropped to 6.35%, sparking higher refinance and purchase activity.

• Affordability remains a challenge, keeping many Greater Phoenix buyers cautious.

• Mortgage rates follow Treasury yields more than Fed moves.

• Inventory is climbing for fall, but contracts show a measured response.

• Expect gradual easing in rates and stable to slightly softer prices into 2025.

Also Read: City Center At Scottsdale Collection Plans Gaining Momentum

Rates Dip & Borrowers Jump

Over the past week, mortgage rates saw their sharpest drop in nearly a year. A 30-year fixed loan averaged 6.35%, the lowest level since October 2024. That small shift lit a fire under borrowers. Refinance requests soared. Purchase applications climbed. Buyers sitting on the sidelines noticed.

• 30-year rate now 6.35%

• Lowest point in 11 months

• Refinance demand nearly doubled

• Purchase applications spiked since July

For Greater Phoenix, this sudden surge tells us buyers are still watching closely. But does one good week mean a full market rebound? Not yet. The bump in activity shows pent-up interest, but affordability is still pinching wallets in The Valley.

Why The Fed Isn’t The Whole Story

You’ll hear plenty about the Fed’s upcoming meeting. But here’s the truth—mortgage rates don’t move in lockstep with the central bank. They move with the 10-year Treasury yield, which reacts to investor confidence, inflation readings, and job data.

• Rates tied to Treasury yield, not Fed

• Weak hiring data recently pulled yields lower

• Markets already pricing in a small Fed cut

• Spread between mortgage rates & Treasuries narrowing

Think of it this way: the Fed sets the mood, but bonds set the pace. That’s why even if the Fed nudges rates down a quarter point, mortgages may not budge in a big way. Investors have already baked much of that into pricing.

Buyers Still Hesitant In The Valley

Yes, rates dipped. Yes, demand ticked higher. But contracts across Greater Phoenix didn’t leap the way you’d expect. New listings are creeping up this fall season, but buyers haven’t rushed in to scoop them up.

• About 2,650 contracts in a 7-day stretch

• Inventory expected to rise in September & October

• Luxury listings lifting average price per square foot

• Affordability still the main drag

For sellers, that means pricing and presentation remain critical. The Valley isn’t seeing a frenzy return. It’s more of a cautious dance, sellers testing the waters, buyers watching for better affordability.

Also Read: Skyline Village Wraps Lot Sales & Accelerates Growth In San Tan

Looking Toward The Rest Of 2025

So, where do we go from here? Industry watchers expect a slow grind lower in rates, not a freefall. The bond market could give us some breaks, but affordability challenges won’t vanish overnight.

• Seasonal listing activity will push inventory up

• Buyers may respond if rates slip closer to 6%

• Price trends likely flat or slightly softer near term

• Outlying cities like Buckeye & Maricopa face steeper challenges

For now, the Greater Phoenix market feels like it’s idling in neutral. There’s momentum building, but it hasn’t tipped yet. Buyers waiting for a big headline change may be waiting longer than they’d like.

Want to time your move in The Valley? That’s where strategy comes in. Rates are easing, inventory’s rising, and opportunities are starting to poke through. If you’re thinking about buying or selling, don’t just watch the Fed, watch what’s happening zip code by zip code here at home.

Also Read: Reasons Why Fix And Flips Are Cooling In The Housing Market