Phoenix metro, Arizona

Welcome to the Phoenix metro HousingGauge, your weekly local market report for the week of October 5, 2026.

Here is the headline. Phoenix metro's HousingGauge score is 43 out of 100, which puts the market in the RED zone. Conditions have weakened over the past three months, and financing remains expensive.

Three developments stand out this week.

First: Mortgage rates up 0.85 points in three months. The 30-year fixed rate averages 7.28%, versus 6.43% three months ago.

Second: Score down 12 points over 13 weeks. The score moved from 55 to 43 over the past 13 weeks, driven mainly by Mortgage Conditions (−6.3 points).

Third: Local employment down 3.3% year over year. Unemployment stands at 4.9%.

Now, what is behind the score?

Mortgage Conditions scores 12 out of 100. The 30-year fixed rate averages 7.28%, up 0.82 percentage points over six months. Financing remains expensive, limiting affordability for leveraged buyers.

Supply & Buyer Leverage scores 64 out of 100. Inventory is 0.5% lower than a year ago (25,262 active listings), with 4.4 months of supply. Homes take a median 67 days to sell at 97.9% of list price, and 25.1% of listings have had a price cut. Negotiating leverage is fairly balanced between buyers and sellers.

Monetary Conditions scores 53 out of 100. The real policy rate is 1.24%, 0.23 points above the estimated neutral rate (r-star) of 1.01% — a near neutral stance. The fed funds rate has risen 0.24 points over six months.

Demand Trend scores 42 out of 100. Pending sales are 5.7% lower than a year ago and closed sales are 3.9% lower. Days on market are 5.6% shorter than a year ago. Buyer demand has softened.

Valuation & Affordability scores 63 out of 100. The median home costs 5.2 times the median household income. Principal and interest on a typical purchase would take 33.8% of that income at current rates. Inflation-adjusted prices are 2.2% lower than a year ago. Affordability is stretched but not extreme.

Local Economy scores 31 out of 100. Local unemployment is 4.9% and employment is down 3.3% year over year. The local job market is softening.

Rental Economics scores 37 out of 100. A year of median rent equals 4.5% of the median price (a price-to-rent ratio of 22.0). Rents are up 0.7% year over year. Rental yields are thin relative to prices.

The score is down 1 point from last week's report (44 to 43). Over 13 weeks it is down 12 points, from 55 to 43. The largest contributors were Mortgage Conditions (−6.3 points) and Demand Trend (−3.6 points).

So what would move Phoenix metro into the yellow? It is close: any one of these would likely do it on its own: 30-year mortgage rate falls below 6.65% (now 7.28%); pending sales grow more than 2.5% year over year (now −5.7%); the Fed cuts more than 0.30 pts over six months (now +0.24 pts); and policy gap (real policy rate minus r-star) narrows below −0.55 pts (now +0.23 pts).

And what could make conditions worse? Watch for these together: 30-year mortgage rate rises above 7.65% (now 7.28%); pending sales fall more than 10.5% year over year (now −5.7%); the Fed raises rates more than 0.50 pts over six months (now +0.24 pts); policy gap (real policy rate minus r-star) widens above +0.60 pts (now +0.23 pts); and months of supply falls below 3.7 months (now 4.4 months).

That is the Phoenix metro HousingGauge for this week. The HousingGauge score describes market conditions. It is not a recommendation to buy or sell, and it is not individualized financial advice. For charts, sources and the full methodology, visit housinggauge.com. Thanks for listening.