Monday Morning Real Estate Mojo

20 hours ago

9 min read

October 5, 2026

Edition #209

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.

October Housing Market Update: More Choices for Buyers, New Challenges for Sellers

The market in early October has completely reversed the encouraging signals we reported a month ago. At the start of September, pending listings, listings under contract, and the contract ratio had all moved back above their levels of a year earlier. That has not held. All three fell sharply during September and are now well below where they stood this time last year, while supply rose faster than it did last fall. Completed sales improved modestly over the month, but September closings mostly reflect contracts signed in July and August, not the clearly weaker contract activity in September itself.

The Sedona and Verde Valley effect we described last month remains present and fairly small. Excluding that area, closed listings were down about 5.7% from a year ago rather than the 4.8% shown in the table, and active listings excluding UCB and CCBS were up about 4.4% rather than 4.9%. This makes no material difference to signals from the pending and under-contract comparisons.

Supply rose sharply. Active listings excluding UCB and CCBS increased 8.3% over the month to 25,647 and are 4.9% above a year ago. Including UCB and CCBS, the total rose 6.4% to 28,348, 2.8% above last year. Some increase during September is normal as sellers return after the summer, but this year’s rise was more than double the 3.8% seen in September 2025. Days of inventory climbed to 134.6 from 126.0 a month ago, though it remains slightly below September 2025’s 136.6. The listing success rate improved again, from 64.7% to 68.6%, so fewer sellers gave up during September, but it remains below last year’s 70.6%.

Demand is by far the main concern this month. Pending listings fell 10.9% to 3,864, and listings under contract fell 10.2% to 6,565. Compared with a year ago, they are down 9.6% and 11.2%, respectively. Listings under contract usually decline a little during September, but this was the steepest September drop since 2022, and it follows increases in each of the last two Septembers. With supply rising at the same time, the contract ratio fell from 30.87 to 25.60, compared with 30.23 last September. Completed sales paint a more positive picture for now. September and August both had 21 working days, as did September 2025, so no adjustment is needed in either comparison. Closed listings rose 4.5% to 5,868 but were 4.8% below September 2025, and monthly dollar volume rose 5.3% to $3,502 million, down 2.5% from last year.

Mortgage rates were the big story in September, and the 30-year fixed rate now stands at 7.57%, according to Mortgage News Daily. It was 6.75% on August 27, so buyers are facing an 8.5% increase in their monthly mortgage repayments over the last 5 weeks. That represents an extra $200 per month on an 80% loan on the typical $450,000 home. This rise in costs is causing agreed contracts to fall through at the highest rate in 3 years, when mortgage rates last peaked. Some buyers appear to be leaving the market, as new contracts are down 11% year on year and 10.3% from August.

Pricing held up a little better than we expected a month ago. The average price per square foot edged up 0.8% to $293.61, though its annual gain narrowed to 2.2% from 3.8% a month ago. The median sales price rose 1.0% to $450,000, the same as in September 2025. Sellers achieved 97.36% of list price, a little better than last month and identical to last year. Looking ahead, the fall in pending and under-contract counts points to fewer closings in October and November than a year ago, and rising supply gives buyers more choice and more room to negotiate. We expect pricing to remain soft through the rest of the year, although a growing contribution from the luxury segment may support the average price per square foot.

The Valley’s Housing Market Shifts Toward Buyers Across All 18 Cities

The average Cromford Market Index (CMI)* is down 11.2% from last month. This is much less favorable for sellers than last week’s 7.8% decline, and it is the weakest reading since November 2023. The trend has deteriorated every week since mid-August, and for the first time since November 2023, all 18 cities are moving in a buyer-favorable direction.

The biggest change is at the top of the table. Paradise Valley and Fountain Hills are both down 30%, and Scottsdale has taken first place from Paradise Valley even though its own index slipped 1%. This is the first time Scottsdale has led the table in our records for all 18 cities, which go back to 2010. Paradise Valley has 19% more supply than a month ago and Fountain Hills 20% more, while their demand has fallen 17% and 16%. Scottsdale has avoided most of that because its demand is up 3%, almost keeping pace with a 4% rise in supply.

Supply is higher than a month ago in 17 of the 18 cities, with Queen Creek the only exception. Demand is weaker in 15 of the 18, with only Scottsdale, Buckeye, and Avondale showing an increase. After Paradise Valley and Fountain Hills, Tempe (-20%), Maricopa (-17%), and Surprise (-15%) have moved the furthest toward buyers, the same five cities as last week. The smallest declines are in Scottsdale and Buckeye (both -1%) and Avondale (-2%).

We still have 5 cities in a seller’s market, 5 balanced, and 8 in a buyer’s market, the same as last week. A month ago, Phoenix, Mesa, and Glendale were all in a seller’s market, and Gilbert sat exactly on the line at 110.0. All four are now balanced, along with Avondale, and the five sit between 100.8 and 104.9. Gilbert has moved up past Glendale into 9th place, and Goodyear has moved past Tempe into 12th. At the bottom, Buckeye and Queen Creek are no longer tied, at 50.5 and 49.1, and Maricopa remains last at 44.0.

The situation is reminiscent of 2022, when interest rates also rose sharply. In the Freddie Mac PMMS weekly survey, they climbed from 3.05% on December 23, 2021 to 7.08% on October 27, 2022, up 403 basis points over 44 weeks. In 2026, rates have risen from 5.98% in late February to 7.28%, up 130 basis points over 31 weeks. The 2022 rise was far larger and faster, with four-week jumps of up to 104 basis points, while the steepest four weeks of 2026 are the last four, adding 57 basis points. However, this year’s rise started from a much higher level, and the weekly rate is now above the 2022 peak of 7.08%. Even worse, the rates on October 1 were above 7.50%, according to Mortgage News Daily, so the Freddie Mac PMMS weekly survey understates the recent move higher.

*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.

Mixed Economic Signals: Hiring Slows as Mortgage Rates Rise

The first week of October delivered a mixed message for interest rates. Hiring and wage growth softened, offering a constructive signal for inflation over time. Yet longer-term Treasury yields ended higher, and the latest national mortgage survey also rose. The encouraging development is that some underlying pressures are easing; the challenge is that energy prices and persistent inflation can still interrupt that progress.

Hiring slowed, with earlier gains revised lower

The October 2 employment report showed 29,000 jobs added in September and unemployment at 4.2%. July payrolls were revised from a 21,000 gain to a 10,000 decline, while August was lowered from 162,000 to 133,000. Together, those revisions removed 60,000 jobs from the previously reported totals. Average hourly earnings rose 0.1% for the month and 3.0% over the year.

Slower wage growth can reduce pressure on business costs and consumer prices. Softer hiring also gives policymakers reason to weigh economic resilience alongside inflation. Neither development automatically lowers mortgage rates, but both matter to the outlook investors build into longer-term bonds.

Inflation offered relief—but spending stayed firm

The August personal consumption expenditures report, released September 30, showed headline inflation of 0.3% for the month and 3.4% over the year. Core PCE, which excludes food and energy, increased 0.2% monthly and 3.0% annually. These figures incorporate BEA’s annual update, which revised historical data.

The Federal Home Loan Bank of New York described the inflation reading as softer than expected and reported that markets reduced expectations for further rate increases after its release. Still, inflation has not disappeared: inflation-adjusted consumer spending rose 0.6% in August. That combination suggests moderating price pressure alongside continued demand, rather than an economy moving uniformly in one direction.

Oil complicated Friday’s bond-market response

According to the Associated Press, Treasury yields initially fell after the jobs report, then retraced their decline as oil recovered much of its early drop. Energy costs can influence both near-term inflation and expectations about future prices. Friday’s reversal illustrates why a softer economic report does not always translate into lasting relief for borrowing costs.

National mortgage-rate snapshot

Freddie Mac’s October 1 survey put the average 30-year fixed mortgage at 7.28%, up from 7.03% on September 24. The 15-year average rose to 6.60% from 6.42%. Those increases equal 25 and 18 basis points, respectively; one basis point is one-hundredth of a percentage point.

The survey reflects applications from the preceding Thursday through Wednesday, so it does not capture the response to Friday’s employment report. Individual rates depend on borrower, loan and market factors. Comparing the same weekly series helps avoid confusing an average with a lender’s daily quote.

4. Longer-term borrowing costs remained under pressure

The Treasury’s 10-year par yield finished October 2 at 5.28%, versus 5.17% a week earlier—an 11-basis-point increase. These official daily readings use indicative bid quotations near 3:30 p.m. Eastern, rather than an individual closing trade.

Mortgage pricing is influenced by longer-term bond yields and the market for mortgage-backed securities—bonds supported by home-loan payments. It does not move point for point with the Federal Reserve’s overnight policy rate. That distinction helps explain why hopes for a gentler policy path can coexist with higher mortgage averages.

The week ahead: October 5–9

The calendar offers several tests of whether softer labor conditions and moderating price pressure are becoming a sustained trend. Market reactions will depend on how the results compare with expectations, not simply whether a number rises or falls.

Monday, October 5: Services-sector reports include the final S&P Global PMI and the ISM Services Index. Activity, employment and price measures will help clarify conditions across a large part of the economy.

Tuesday, October 6: BEA releases August international trade figures. Changes in imports and exports can affect estimates of economic growth, although this report is usually less central to mortgage pricing than inflation or employment.

Wednesday, October 7: Minutes from the September 15–16 Federal Reserve meeting will provide detail on policymakers’ discussions. This is a record of an earlier meeting, not a new rate decision; the next scheduled meeting is October 27–28.

Thursday, October 8: Weekly unemployment claims will offer a more timely labor-market check following September’s payroll report. A single weekly reading can be noisy.

Friday, October 9: The University of Michigan’s preliminary October consumer survey will bring updated sentiment and inflation expectations. Persistent inflation worries could weigh on bonds; easing expectations could be supportive.

The constructive thread is clearer evidence that some labor-related inflation pressure is moderating. A steadier interest-rate environment will require that progress to persist alongside broader price improvement. The coming week should help clarify the direction, even if the path remains uneven.

Market in a Minute

Housing Market

Buyers are gaining negotiating power: All 18 major Valley cities are trending toward buyers as the average Cromford Market Index fell 11.2% over the past month.
More homes, fewer contracts: Active inventory rose 8.3% in September, while homes under contract declined 10.2%, increasing competition among sellers.
Mortgage rates moved higher: Freddie Mac’s average 30-year fixed rate increased to 7.28% from 7.03% the previous week, adding pressure to affordability.

Economy & Rates

Hiring and wage growth slowed: September added 29,000 jobs, unemployment reached 4.2%, and annual wage growth eased to 3.0%.
Inflation remains persistent: Annual headline PCE inflation measured 3.4%, while core inflation was 3.0%. Inflation-adjusted consumer spending rose 0.6%, showing continued demand.
Bond yields rose despite softer hiring: The 10-year Treasury yield ended the week at 5.28%, up from 5.17%. Energy prices and inflation concerns continue to put pressure on borrowing costs.