Fed raises rates: What might happen to Phoenix home sales and prices?
Mortgage rates were already above 7% in a daily rate measure before the announcement. The next question is how buyers and sellers respond.
How much does the same $500,000 home cost at three September mortgage rates?
Which rate did the Fed raise?
The Fed raised the federal funds target, not the prime rate or the 30-year mortgage rate. Banks typically adjust prime in response. Fixed mortgage rates respond more to longer-term bond yields, inflation expectations and mortgage-backed securities markets, so they can move ahead of a Fed meeting—or in a different direction afterward.
HousingWire reported a 7.28% average for its 30-year conforming loan-lock measure on September 15. Freddie Mac’s most recent weekly survey available before the announcement was 6.76% on September 10. These measure different loans and sampling windows and should not be treated as one continuous rate series. The pre-meeting move supports the idea that a hike was partly anticipated; it cannot tell us how much of the move was due to that expectation.
What happened in earlier Phoenix rate-rise periods?
In late 2018, Greater Phoenix transactions cooled while year-over-year median prices stayed positive. October ARMLS sales were 1.2% lower than a year earlier, while the median sale price was 6.9% higher. By December, sales were down 9.4% year over year and the median remained 6.4% higher.
In 2022, the shift was much sharper. July closed sales were down 31.6% year over year, though the median was still 12.0% higher. By December, sales were down 43.4% and the median price was 3.5% lower than a year earlier. These are observations during rising-rate periods, not estimates of how much the rate changes alone caused.
The closed-sale median reached $475,000 in May and June 2022, then moved to $453,500 in July, $438,000 in October and $411,995 in December. A median can also shift when the mix of homes sold changes; it is not a repeat-sales measure or an appraisal of every home.
What should Phoenix owners watch now?
August 2026 ARMLS data put the marketwide median sale at $445,000, median days on market at 64 and supply at 4.28 months. Those closings predate the September 16 decision. Over the next several months, pending contracts, inventory, days on market, seller concessions and then closed-sale prices will provide a clearer sequence than one headline rate.
Higher borrowing costs can narrow the pool of qualified buyers and change negotiating power. A slower sales pace does not establish an immediate value decline for every neighborhood or property type. Market area, supply and comparable sales remain central.
Sources & method
Federal Reserve, September 16 decision · July 2023 decision · HousingWire, September 15 daily loan-lock measure · Freddie Mac weekly PMMS · ARMLS October 2018 · December 2018 · July 2022 · October 2022 · December 2022 · August 2026. ARMLS figures are marketwide and reflect each report’s stated coverage. ARMLS® copyright; used with attribution.
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