Arizona’s real estate and housing market is showing signs of balance heading into 2026, according to the Arizona Association of REALTORS® 2026 leadership team. REALTORS® across Arizona are optimistic that a more stable market is emerging, giving buyers and sellers more confidence to move forward after several years defined by higher interest rates, limited inventory and buyer hesitation.
READ MORE: Here is the outlook for Phoenix’s 2026 housing market
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Interest rates did not decline as sharply as many buyers and sellers expected in 2025, remaining mostly in the 6 percent range. This uncertainty influenced many consumers to pause major housing decisions and contributed to longer days on market across much of the state.
“Despite current interest rates, home values in Arizona remained stable, but properties stood out for how long they spent on the market,” said Lisa Paffrath, 2026 President of the Arizona REALTORS®. “This encouraged buyers and sellers to be more thoughtful in their decisions and showed why it’s important to work with a professional REALTOR® who understands how to price your home for the local market.”
Looking ahead, interest rate cuts in 2026 are expected to be slow but steady, offering a potential signal that prospective buyers have been looking for.
“Uncertainty has been the defining theme economically, politically and globally, but even modest interest rate improvements could quickly change buyer behavior,” said Shane Cook, 2026 President-elect of the Arizona REALTORS®. “If rates come down, more buyers, and to a degree more sellers, will enter the marketplace, potentially shifting market balance.”
Affordability remains a challenge heading into 2026. However, seller concessions and growth in certain areas of the state stood out in 2025 for creating new entry points for buyers.
“New construction and expanding suburban markets will continue to provide important opportunities for buyers across Arizona in 2026,” said M. Teresa Rubio, 2026 Treasurer. “Improving inventory and seller concessions are helping buyers move forward. Demand continues to grow from millennials, Gen Z buyers and those relocating to Arizona, and that trend is expected to continue.”
Builders are playing a significant role in that shift, particularly in high-growth areas.
“Builders are more competitive than we’ve seen in years, offering rate buydowns, move-in-ready homes and additional incentives, especially in growing areas across Arizona,” said Paul Baker, 2026 First Vice President of the Arizona REALTORS®.
“Arizona continues to be a technology, logistics and employment hub,” Cook said. “That long-term growth supports housing demand even during periods of uncertainty.”
While inventory in the Valley remains below long-term historical norms of roughly 35,000 active listings, approximately 27,000 single-family homes are currently on the market and rising. “We’re seeing the market level out,” said Sindy Ready, Past President of the Arizona REALTORS®. “This is a meaningful improvement and gives buyers more options than they have had in years.”
Demographic trends are also shaping demand across the state and on a national scale. Recent data from the National Association of REALTORS® revealed the typical age of a first-time homebuyer has jumped to 40, an all-time high.
While many buyers are entering the market later, Gen Z buyers and retirees continue to drive activity in distinct segments due to their homebuying patterns and preferences. A recent Arizona REALTORS® “Homebuying by the Ages” survey captured REALTOR® insights on buyers aged 25 to 34 and those 55 and older.
The survey found that buyers across generations have similar top priorities in their home search, including turnkey, move-in-ready homes, safe and connected communities, and access to outdoor recreation and lifestyle amenities.
“These findings reinforce that buyers are intentional,” Ready said. “Arizona is no longer a frenzied market; it is driven by informed choices. Prospective buyers are relying on REALTORS® to navigate these intricacies of our market.”
The survey also found that younger buyers prioritize updated kitchens, open floor plans and long-term equity-building, while buyers ages 55 and older overwhelmingly seek single-story, low-maintenance homes.
While uncertainty has not completely disappeared in prospective buyers and sellers, the Arizona REALTORS® believe 2026 will be a year of market balance, creating a healthier and more sustainable housing market statewide.
