After more than three years of a sluggish housing market, things might loosen up a bit in 2026 as interest rates have started to fall, which could prove to be a huge benefit for both buyers and sellers alike.
Mortgage rates reached their peak in December of 2023 at 7.5 percent. Last month, rates fell to 6.14 percent, the lowest since 2022. Also in December of 2025, the Federal Reserve executed its third consecutive interest-rate cut, signaling a broader shift away from the aggressive inflation-fighting stance that drove borrowing costs to 20-year highs.
An additional factor is the Fed’s decision to halt quantitative tightening. In an effort to battle inflation over the past couple of years, the Fed had been pulling money out of the financial system, which pushed interest rates higher. By ending that program, the Fed is helping calm down the bond market — the place where big loans, like mortgages, get traded. A calmer bond market can help rates slowly move lower and stay steadier.
Mortgage rates don’t move in lockstep with the federal funds rate, but when the Fed lowers interest rates, it usually helps bring them down. Even a small drop in mortgage rates can make a home much more affordable, which could bring buyers back into the market who have spent years on the sidelines waiting for things to improve.
We are already seeing signs of improvement in Maricopa, despite November and December typically being the slowest time of the year for Real Estate transactions. The number of active listings has decreased more than 10% in the last 6 weeks, from 698 to 622. This is the lowest number of homes on the market since February. Additionally, there are more listings currently under contract than compared to the same week in 2024.
What about prices? Until inventory levels drop another 10-15%, we are unlikely to see prices increase much, and the market will continue to favor buyers. However, as demand increases and more offers are written, buyers will lose some negotiating power. Homes will sell quicker and sellers will be less motivated to accept the first offer or to give a large amount of concessions.
After years of waiting for housing to be more affordable, 2026 may prove to be the right time to make a move, before things really start to accelerate.
Dayv Morgan is a Maricopa realtor and owner of HomeSmart Premier.
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