MARKET · MAY 25, 2026

Monday Market Update: Rates Spike, Market Keeps Sliding

The 30-year fixed jumped to 6.75% this week on bond market weakness. The Cromford Index drop accelerated to 1.5%.

The Signal

The drift kept accelerating this week. The average Cromford Market Index across the 16 cities we track fell 1.5%, deeper than last week's 1.0% drop and the 0.3% decline the week before. Ten cities moved in a direction favorable to buyers, one more than last week, while eight moved toward sellers. The single-family detached market has now leaned a little further toward buyers for a third straight week.

Nine cities remain in seller's market territory, three are balanced, and six are buyer's markets. Queen Creek and Avondale posted the largest buyer-side moves, with Avondale down 10% in a single week. Cave Creek and San Tan Valley led on the seller side. Scottsdale climbed 3% and passed Phoenix to become the third-strongest market in the metro. The overall Cromford Index slipped from 82.9 last month to 81.8 today. Still seller-leaning, but the slope has steepened.

The Numbers

Active listings excluding under-contract sit at 25,743, down 3.6% from a year ago. Under contract counts moved to 9,265, up 9.4% year over year. Pending listings hit 5,312, up 8.5%. The Cromford Market Index slipped from 82.9 last month to 81.8 today. Months of supply rose from 3.2 to 3.6. Listing success rate eased to 72.0%. Average sale price moved to $609,105, up 0.7% YoY. Median sale price held at $450,000, now down 0.4% year over year, the first negative annual median reading of the spring. Monthly dollar volume reached $4.40B across the metro.

What This Means

Two engines run this market and they are pulling in different directions. The top tier moves with the stock market and the wealth it generates. Everything below it moves with the bond market through mortgage rates. When the 30-year fixed jumps from the low-6% range to 6.75% in a matter of weeks, the buyer in the $400,000 to $600,000 band feels it immediately in the monthly payment. The buyer in the luxury band often does not.

That divergence is visible in the city data. Scottsdale gained 3% and passed Phoenix this week. Paradise Valley is down for the month but ticked up over the past seven days. Meanwhile Avondale fell 10% in a single week and Queen Creek dropped 9%. The entry and mid-tier suburbs are absorbing the rate shock while the high end holds its footing. A negative year-over-year median for the first time this spring is the clearest signal yet that the broad market is recalibrating to higher financing costs.

What to Watch

The bond market is now the whole story for affordability. Treasury yields backed up hard this month as inflation fears and fiscal-deficit concerns pulled long-dated bonds lower. Mortgage News Daily reported the typical 30-year fixed at 6.75% on May 20, up sharply from the low-6% range that defined April. Mortgage rates track the 10-year Treasury, not the Fed funds rate, so every leg up in yields feeds straight into buyer payments and trims demand across the middle of the Phoenix market.

There is a split worth understanding. The luxury tier at the top of the market moves with the stock market and the wealth it creates. Everything below it moves with the bond market through mortgage rates. That is why Scottsdale and Paradise Valley can hold firm while the entry and mid-tier cities soften under higher financing costs. Watch the 10-year yield and the next CPI print on June 10. A second hot inflation reading would keep rates elevated and the affordability squeeze in place through summer.