You have probably heard plenty about inflation lately.
Higher everyday expenses. Energy costs. Mortgage rates. Federal Reserve decisions. It can sound like one more reason to put your real estate plans on hold.
But before one economic headline changes your plans, it helps to understand what is actually happening—and what it means here in Ahwatukee, Chandler, Gilbert, Phoenix, and communities throughout Arizona's East Valley.
Inflation remains a concern, but today's housing market is giving buyers and sellers a different set of opportunities than they had just a few years ago.
Inflation Is Still Higher Than Policymakers Would Like
The government measures inflation in several ways. One is the Consumer Price Index, commonly called CPI. Another is the Personal Consumption Expenditures Price Index, or PCE.
The Federal Reserve pays particularly close attention to PCE when evaluating inflation and the economy.
The latest available PCE report showed prices were 3.7% higher in July 2026 than one year earlier. That annual rate was unchanged from June and below the 4.1% increase recorded in May. We also have newer August CPI data showing annual inflation at 3.4%.
So, while inflation remains elevated, it is more accurate to say it is proving stubborn rather than simply saying it is moving rapidly in the wrong direction.
That distinction matters because inflation can influence financial markets—and that brings us to housing.
Why Does Inflation Matter to Homebuyers?
Inflation is one of several factors that can influence mortgage rates. When inflation remains elevated, financial markets may expect the Federal Reserve to maintain tighter monetary policy for longer.
But there is an important distinction buyers should understand:
The Federal Reserve does not directly set mortgage rates.
The Fed controls a short-term interest rate known as the Federal Funds Rate. Mortgage rates are determined in financial markets and can respond to inflation, employment, economic growth, Treasury yields, expectations about future Fed policy, and other economic developments.
That is why mortgage rates can sometimes move even when the Federal Reserve has not changed its own rate.
And it is also why trying to predict exactly where mortgage rates will be several months from now is extremely difficult.
Waiting for the “Perfect” Mortgage Rate Can Be Complicated
If you have been waiting for mortgage rates to fall significantly before buying, inflation is worth watching. But mortgage rates are only one part of a home purchase.
While buyers may not have the borrowing costs they hoped for, something else has been changing here in the Phoenix area.
Buyers have more choices.
According to August 2026 market data for the Phoenix-Mesa-Chandler metro:
- Active listings were up 5.2% compared with a year earlier.
- The median asking price was down 4.8% year over year.
- Approximately 27.6% of listings had experienced a price reduction.
- The typical listing spent about 67 days on the market.
Those numbers do not mean every East Valley seller is ready to negotiate.
But they do mean today's buyer may encounter opportunities that were much harder to find during the bidding-war years.
Higher Borrowing Costs and Better Negotiating Opportunities Can Exist at the Same Time
This is an important part of today's market that can get lost in the headlines.
A few years ago, buyers benefited from exceptionally low mortgage rates. But many were also competing against multiple offers, bidding above asking price, and dealing with sellers who had little reason to negotiate.
Today's market looks different.
Borrowing costs may be higher, but buyers may have more properties to choose from. Some sellers are reducing their prices. And depending on the property and circumstances, there may be opportunities to negotiate.
That does not automatically make today's market better or worse. It simply means buyers need a different strategy.
Seller Concessions May Help Create Options
Negotiating does not always mean asking the seller to lower the purchase price.
Depending on the financing, property, and transaction, a seller may be willing to contribute toward certain allowable buyer closing costs or other concessions.
For some buyers, that may provide a greater immediate benefit than negotiating the same amount off the purchase price.
This is where communication between your real estate agent and lender becomes especially important.
Before deciding what to ask a seller for, the buyer should understand which strategy may provide the greatest benefit based on their individual financing.
What About Different Financing Strategies?
The original conversation around inflation often leads buyers to ask whether there are ways to reduce the impact of today's borrowing costs.
There may be.
Depending on the buyer's qualifications and goals, a lender may be able to discuss different financing structures, including fixed-rate financing, adjustable-rate options, temporary or permanent rate buydowns, down payment assistance programs, and other available loan programs.
These options are not right for everyone.
That is why financing should be evaluated based on the buyer's budget, how long they expect to own the property, their financial goals, and the specific loan terms—not simply because one option has a lower initial payment.
What Does Inflation Mean for East Valley Sellers?
Inflation and borrowing costs matter to sellers because they affect what buyers can comfortably afford and today's buyers tend to be more selective.
And when nearly 28% of Phoenix Metro listings have experienced a price reduction, sellers should pay attention to what buyers are expecting from the market.
For Sellers: This does not mean you need to give your home away.
It means pricing and presentation matter.
A home that is well prepared, professionally marketed, and priced appropriately for its neighborhood and competition can still attract serious buyers. Buyers that qualify in today's higher mortgage rate environment.
But today's market may not reward a strategy of starting significantly above market value just to “see what happens.”
Your first asking price helps determine whether buyers stop and look—or keep scrolling.
This Is Not the Housing Market of 2008
Whenever there is economic uncertainty, comparisons to the 2008 housing crisis tend to appear.
But there are significant differences between that housing market and today's.
Many homeowners today have substantial equity in their properties. Lending standards are different. And today's affordability challenges are not the same as the widespread distressed and underwater homeowner conditions associated with the housing crisis.
That does not mean every homeowner is financially secure or that home prices cannot decline in a particular neighborhood.
Real estate is local, and values can move differently by community and price range.
But a challenging economy does not automatically equal a housing crash.
A difficult market and a broken market are not the same thing.
What Should Buyers Do Right Now?
If you want to buy a home, start with what you can control.
Know your comfortable monthly housing budget. Talk with a qualified lender about your financing choices. Understand how much cash you want to use. And then look at what is actually available within that range.
When you find a property you like, we can look beyond the asking price.
Has the price already been reduced? How long has the home been available? What have comparable homes sold for? Are there competing offers? And could there be an opportunity to negotiate price, concessions, or other terms?
That information is much more useful than trying to guess exactly where mortgage rates will be six months from now.
What Should Sellers Do Right Now?
If you are considering selling, today's economic environment makes preparation especially important.
Look at recent comparable sales instead of relying on what a neighbor received several years ago.
Study the homes currently competing with yours.
Prepare the property so it makes a strong first impression online and in person.
And decide before an offer arrives where you may—or may not—be willing to negotiate.
A seller with substantial equity may also have more options than they realize. That equity could potentially help with the next home purchase, downsizing, relocation, or another financial goal.
Don't Let One Headline Decide Your Next Move
Inflation matters. Mortgage rates matter. Home prices matter. But none of those numbers should be considered by themselves.
If you are thinking about buying or selling in Ahwatukee, Chandler, Gilbert, Phoenix, or another East Valley community, your decision should be based on your circumstances and the local market.
For a buyer, today's increased inventory and seller flexibility may create an opportunity.
For a seller, equity and the right pricing and marketing strategy may provide options for making the next move.
And for someone who is not financially ready, waiting may absolutely be the right decision.
The goal is not to perfectly time the housing market. The goal is to understand the market well enough to make a confident decision when the timing is right for you.
If you are wondering what today's changing economy means for your real estate plans, I would be happy to help you look at what is happening in your specific part of the East Valley.
Email Kip to talk about your East Valley real estate plans.
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Kip Wilkins REALTOR® | Equities Real Estate, LLC Phone: 208-915-9606 |
I believe real estate is about relationships, trust, and helping people make confident decisions. Whether you are buying your first home, moving up, downsizing, or preparing to sell, my goal is to educate you, advocate for your best interests, and provide the local knowledge you need to make an informed decision.
Kip Wilkins is a licensed REALTOR® with Equities Real Estate, LLC. REALTOR® is a registered trademark of the National Association of REALTORS®. Equal Housing Opportunity. Kip Wilkins is not providing mortgage, financial, or investment advice. Mortgage programs, rates, qualification requirements, seller concessions, and closing costs vary by borrower, lender, property, and transaction. Phoenix-area housing statistics referenced are based on August 2026 Realtor.com Economic Research data. Inflation information is based on published U.S. Bureau of Economic Analysis and Bureau of Labor Statistics data. Market and economic conditions can change. Information is deemed reliable but not guaranteed and should be independently verified.