Published October 18, 2026 in Market Update

South Phoenix still has active demand, even with rates above 7%

By Vanessa Aragon

Real estate, South Phoenix

Realtor.com reported that mortgage rates topped 7% in September 2026. That is a real headwind. Even so, the Real Estate Data Aggregator counted 838 pending sales and 787 closed sales across South Phoenix in the three months ending August 31, 2026. Buyers are still here. That means your price and your timing still matter.

Those numbers show a market that is still moving. But not every ZIP code moves the same way. Some areas are selling in under 50 days. Others are sitting for four months or more. That gap is the story.

Rates are not going down soon

CNBC reported that Fannie Mae forecast an average 30-year fixed rate of 7.4% for the fourth quarter of 2026. Fannie Mae also forecast 7.5% for all of 2027. Waiting for rates to drop before you list may mean waiting a long time. The buyers who are active right now are motivated. They have already made peace with today's rates.

Realtor.com also reported that pending home sales nationally were down 8.5% year over year in September, according to Zillow data cited by CNBC. South Phoenix held up better than that in several ZIP codes. That is worth knowing.

Where homes are moving fastest

The Real Estate Data Aggregator shows the biggest contrast in days on market. Some ZIP codes are averaging under 50 days. Others are over 100. Here is how they line up.

ZIP 85009 and 85040 tied for the fastest pace, each at 45 days median, per the Real Estate Data Aggregator. ZIP 85034 sat at the other end at 138 days. That is nearly a three-month difference. Same market, very different experience.

Quick-contract rates tell the same story

The Real Estate Data Aggregator tracks how many homes go under contract within two weeks of listing. In 85040, that share was 35.7%. In 85003, it was 33.3%. In 85009, also 33.3%. Those three ZIP codes are where well-priced homes are finding buyers fast.

ZIP 85034 showed 0% of homes going under contract within two weeks, per the Real Estate Data Aggregator. That is a signal worth paying attention to if you own there. Pricing and presentation need to work harder in that ZIP.

Prices are mixed, not falling across the board

The Real Estate Data Aggregator shows prices moved in different directions depending on the ZIP. Some rose. Some dipped a little. Here is the full picture.

ZIP 85003 led at $738,750, up 25.7% from the same period a year ago, per the Real Estate Data Aggregator. That is a big jump. On the other end, 85009 came in at $304,000, down 7.9% year over year. Not every ZIP is telling the same story.

Realtor.com reported the median list price for the broader Phoenix-Mesa-Chandler area was $475,000 in September 2026. Several South Phoenix ZIP codes sit below that mark, which may attract buyers who feel priced out elsewhere.

Price cuts are common in the wider metro

Realtor.com reported that 29.0% of listings in the Phoenix-Mesa-Chandler area had price reductions in September 2026. That is nearly 3 in 10 homes. If your price is not landing, that context matters. Buyers are watching for cuts, and they notice when a home sits.

Where sellers are getting close to list price

The Real Estate Data Aggregator tracks the average sale price as a share of the original list price. In 85042, sellers got 98.7% of list. In 85040 and 85043, sellers got 98.6%. Those are strong numbers in a 7% rate world.

ZIP 85040 stood out. The Real Estate Data Aggregator showed 22.7% of homes there sold above list price. That share jumped 12.1 points from a year ago. Homes are also selling 10 days faster than they did last year in that ZIP.

A few ZIP codes where patience is required

ZIP 85004 averaged 127 days on market, per the Real Estate Data Aggregator. That is 30 days longer than a year ago. The sale-to-list ratio there slipped to 94.8%. Homes are selling, but buyers have more room to negotiate. ZIP 85007 averaged 79 days and its sale-to-list ratio fell 2 points to 94.1%.

That does not mean those ZIP codes are broken. The Real Estate Data Aggregator still counted 20 closed sales in 85004 and 35 in 85007 in the same three months. Buyers are there. The price just needs to meet them.

Rents are softening slightly in the metro

Realtor.com reported the median asking rent in the Phoenix-Mesa-Chandler metro was $1,430 in September 2026. That was down 1.9% year over year. For context, Realtor.com put the median asking rent across the 50 largest U.S. metros at $1,694 for the same month. Phoenix rents are running below that national figure. That may keep some potential buyers renting a little longer, which is worth knowing if you are pricing to attract them.

The national picture adds some context

The Federal Housing Finance Agency reported that U.S. house prices rose 2.6% from July 2025 to July 2026. Month over month, they rose 0.3% in July, seasonally adjusted. South Phoenix ZIP codes with price gains above that national pace, like 85003 at up 25.7% and 85007 at up 10.2%, are outperforming the country by a wide margin, per the Real Estate Data Aggregator.

One last thing worth saying plainly. The numbers above cover whole ZIP codes. One street can read very differently from the ZIP around it. A block with newer builds, a different lot size or a different school boundary can shift the picture. The ZIP code is a starting point, not the final answer.