Monday Morning Real Estate Mojo

Sep 21

8 min read

September 21, 2026

Edition #207

Mojo defined

1. A term used for self-confidence, self-assuredness.

2. The basis for belief in ones self in a situation.

3. Efficacy to bolster confidence.

4. Ability to bounce back.

There has been so much misinformation about the real estate market in the national media lately...our goal is always to provide our clients with accurate, real time market data.

Rising Rates, Paused Buyers—and a Window of Opportunity

For Buyers

The best description for the housing market vibe this month is disappointment. Average mortgage rates are front and center again, and not in a good way. After hovering around 6.75% for most of August, conventional rates shot up to 7.24% in less than 2 weeks in anticipation of the Federal Reserve raising the Fed Funds Rate. That is nearly a half percent increase, equating to roughly a 5% increase in a principal and interest payment. On a $3,000 monthly payment, it’s an extra $150, which isn’t enough to disqualify most active buyers but the “shock and awe” has stalled demand back to 2023 and 2024 levels.

Home values didn’t crash in 2023 or 2024 when rates were routinely over 7.25%, and market indicators do not support a crash in 2026. However, they may glide with less demand. Ironically, it’s not the rate itself that has caused such a sharp pause in buyer activity, because more homes sold in previous years with the same or higher rates. It’s the volatility of the rate. Buyers typically pause when the rate is actively rising or actively falling, waiting for it to find stability. This pause provides a window of opportunity for those buyers who can shoulder a higher payment temporarily and negotiate a better deal on the price or terms of their purchase. When rates decline again, they may refinance their home and enjoy a lower payment.

Those who purchased in 2023 at 8% in October were able to refinance at 6.6% by December, or 6.1% by September 2024. Rates increased to 7.25% by January 2025, and those buyers were able to refinance to 6.1% by September. As a rule of thumb, every 1% change in mortgage rate equates to roughly a 10% difference on the principal and interest payment.

Meanwhile, incentives remain primarily focused on seller-paid closing costs and rate buydowns that effectively drop a buyer’s principal and interest payment temporarily by 10-20% for a year or two. In August, 59% of all MLS sales involved some form of seller-paid incentive of this nature, with a median cost to the seller at just over $10,000. The top price range for incentives is $350,000-$400,000 at 71% of sales.

The 4th quarter is seasonally the best time to be a home buyer in Greater Phoenix anyway, so expect new construction incentives to ramp up as well. Buyers who can shoulder the higher rate can negotiate better terms on the home they want today, and get the payment they want when rates decline in the future.

For Sellers

Higher mortgage rates are nothing new for the housing market, and the tools used to sell homes over the last 3 years are still effective today. However, sellers should be prepared for longer marketing times as the calendar approaches the holidays. It’s not uncommon to see a median of 50-60 days on market prior to an accepted contract in the 4th quarter. October is a very popular month for new listings, especially in luxury and retirement communities as the temperatures drop, but it doesn’t always coincide with a boost in demand.

With this in mind, long-term tracking tells us consistently that properties that go under contract within 15 days of listing typically get 99% of their original asking price on average. Listings with 1-2 months on market average 95% of their original asking price, and those with 3-4 months on market average 90%. Buyers have consistently negotiated around 97-97.5% of the last list price for nearly 2 years, so the closer sellers can get to where the buyers believe the price should be, the faster they will get a contract close to asking price.

August closings were down 6.3%, the first time all year that monthly sales did not outperform 2025. However, the luxury market over $1.5M continues to be strong with August sales up 15% over last year. More specifically, sales over $3M were up 59% in August with 62 closings compared to 39 last year. Luxury buyers do not rely on mortgage rates; instead, they are influenced primarily by stock market performance and corporate profits. Corporate profits hit another record in Q1 this year and the stock market has remained resilient through the year.

Higher Rates Cool Demand as the Market Shifts Toward Buyers

The average Cromford Market Index (CMI)* is down 4.6% from last month, a notable deterioration from last week’s 2.1% decline and the weakest reading since February. The recent spike in mortgage rates—now well above 7% for a 30-year fixed loan—is likely contributing to the slowdown. This marks the fourth consecutive week of weakening conditions, following a 1.2% gain as recently as August 27.

The luxury market is no longer carrying the broader market. After leading throughout the summer, Paradise Valley is down 13% and Fountain Hills is down 8%. Scottsdale remains the exception, improving by 6%.

The shift is being driven primarily by weaker demand rather than rising supply. Demand has declined over the past month in 15 of the 18 cities, with only Avondale and Scottsdale posting increases. Meanwhile, supply has changed very little outside Tempe and Maricopa. This differs from August, when strength in the luxury market was largely driven by listings coming off the market rather than an increase in buyer activity. Over the past month, demand is down 11% in Paradise Valley and 10% in Surprise.

Only three cities are now moving in a seller-favorable direction, down from five last week. The remaining 15 are shifting toward buyers, up from 13 last week. Tempe (-14%), Paradise Valley (-13%), Maricopa (-12%), and Surprise (-11%) experienced the largest declines.

The overall market breakdown remains unchanged from last week, with seven cities in seller’s markets, three balanced, and eight in buyer’s markets. Avondale moved ahead of Glendale, while Mesa and Phoenix are now tied with a CMI of 111.5. The bottom of the table remains relatively stable, with Queen Creek unchanged and Buckeye declining by just 1%.

*Cromford Market Index™ (CMI) is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

Bonds, Inflation and the Fed: What’s Moving Mortgage Rates

Week ending September 18 2026

Mortgage rates moved higher as the Federal Reserve raised its policy rate and stronger consumer spending reinforced concerns about persistent inflation. It was a challenging week for affordability, but understanding what changed can make the next step more manageable. Let’s walk through the news and what it means for your plans.

What moved rates this week

The Fed raised its policy rate. On September 16, the Fed voted unanimously to increase its target range by a quarter percentage point to 3.75%–4.00%. Officials described economic activity as solid and inflation as elevated. Their updated projections showed a median year-end policy rate of 4.1%, consistent with another quarter-point increase from the new range. That is a projection, not a commitment; incoming data can change the outlook.

For mortgage borrowers, the message was that policymakers still see work to do on inflation. Longer-term borrowing costs respond to expectations about inflation and future policy, so the outlook accompanying a Fed decision can matter as much as the decision itself.

Consumers continued spending. The September 16 retail-sales report showed August sales rose 1.2% from July, following a revised 0.5% decline the prior month. These figures are not adjusted for inflation, so higher dollar spending does not translate directly into the same increase in goods purchased. Still, the rebound gave markets another sign of economic resilience and less reason to expect an immediate shift toward easier policy.

Bonds remained sensitive to inflation and energy. The 10-year Treasury yield was 5.01% on September 18, compared with 4.96% on September 11. It briefly eased to 4.94% on Thursday before moving back up Friday. Meanwhile, Brent crude traded back above $103 a barrel on Friday. Elevated energy costs can keep inflation concerns alive, making it harder for longer-term borrowing costs to settle lower.

One thing to note on inflation, as you will see in the illustration below, excluding food and energy (oil), core inflation fell to 2.4% year over year – its lowest level in more than five years. I point this out because I believe once the war with Iran is behind us (hopefully very soon) we will see oil prices start to significantly decrease and inflation numbers will follow accordingly.

Why a Fed hike is not a mortgage rate formula

The Fed sets a short-term policy rate; it does not set the rate on your 30-year mortgage. Mortgage pricing reflects longer-term bond markets, including mortgage-backed securities, as well as lender and loan-specific factors. A quarter-point Fed increase therefore does not automatically add a quarter point to every mortgage quote. Markets can also adjust before an expected announcement.

Where mortgage rates stand

Freddie Mac’s September 17 survey put the average 30-year fixed mortgage at 6.95%, up from 6.76% a week earlier. The 15-year average rose to 6.26% from 6.09%. Those increases were 19 and 17 basis points, respectively. One basis point is one hundredth of a percentage point. [7]

These are weekly national averages, not Friday closing quotes or an offer to lend. The survey focuses on conventional, conforming purchase loans for borrowers with excellent credit and 20% down. Your rate depends on your credit, down payment, loan type, property and market conditions. Rates can change daily.

What we are watching September 21 through 25

The coming week brings follow-up commentary from Fed officials and several useful checks on business activity and household confidence. Markets will be listening for what could influence the Fed’s next decision.

Wednesday September 23 S&P Global’s preliminary manufacturing and services surveys offer an early read on September activity. Signs of stronger demand or rising business costs could keep pressure on yields; softer activity or cooling prices could offer relief.

Thursday September 24 Weekly unemployment claims and August new-home sales provide updates on the job market and housing demand. Watch for meaningful surprises rather than treating any single report as a trend.

Friday September 25 August durable-goods orders and the final September University of Michigan consumer-sentiment report will help round out the picture. The sentiment report’s inflation expectations will be especially relevant after the Fed’s decision.

Looking a little further ahead, the next personal income and spending report, which includes PCE inflation, is scheduled for September 30. It is outside this coming week’s calendar but remains an important checkpoint for the inflation outlook.

Market in a Minute

Housing Market

MARKET SHIFTS TOWARD BUYERS The average Cromford® Market Index is down 2.1% from last month, signaling less favorable conditions for sellers.
BUYER-FRIENDLY MOMENTUM GROWS Thirteen of the 18 cities measured are moving in buyers’ favor, with Maricopa, Surprise and Tempe showing the largest shifts.
PEORIA ENTERS A BUYER’S MARKET Greater Phoenix now has seven cities in seller’s markets, three balanced and eight in buyer’s markets.

Economy & Rates

MORTGAGE RATES MOVE HIGHER The average 30-year mortgage rate increased for the fourth consecutive week after beginning near 6.65% in late August.
BOND MARKET REMAINS VOLATILE A global bond selloff pushed Treasury yields higher, placing additional upward pressure on mortgage rates.
INFLATION KEEPS THE FED CAUTIOUS The latest inflation report arrived amid rising yields, keeping investors focused on the Federal Reserve’s next move.