It is August 1, 2026, and while the month’s final numbers are not yet in, there is enough data to see clearly where the Metro Phoenix housing market stands. The headline is demand. From May 1 to August 1, the number of homes under contract dropped 40%.

Two forces are behind that decline. The average rate on a 30-year mortgage has climbed since earlier in the year, and temperatures forecast above 110 degrees for several days running have thinned the buyer pool to only those who are serious about purchasing. Both explanations come with important context. The slowdown is seasonal and expected at this point in the year, and mortgage rates, while higher than a few months ago, remain below where they sat last year. This is a summer cooldown, not a market in trouble.

The pullback in demand did not happen in isolation. Inventory is down 11% from May and lower still than a year ago, as sellers commonly pull their listings for the summer to reset days on market ahead of the fall selling season. With both supply and demand contracting, the Supply and Demand Ratio fell 25%, giving the buyers who remain more room to negotiate on price, terms, and requested repairs. The average sale price of a single family detached home sold in Maricopa County on the MLS slipped 3.8% in July but stayed higher than a year ago.

So how is the Arizona market doing? It depends on which market you mean. The general market is working through real seasonal softness. The luxury market is doing the opposite. Arizona’s high end is posting its best year by far in 2026, and the Dow Jones Industrial Average, up 17.69% from a year ago and roughly $4.9 trillion in added value, probably has a great deal to do with it. This is not the luxury report, so the full picture there is a separate conversation. The same holds at the local level. Beneath the countywide numbers, some cities and zip codes are performing very well while others are not, and those differences matter more than any single valleywide figure.

If you have any questions, please feel free to reach out to Michael Hankerson directly at 602.770.7205