Real estate expert analyzes Arizona housing affordability challenges | FOX 10 Phoenix

August 19, 2026 - 04:58

The housing market in Arizona and across the country is still feeling the squeeze from high interest rates and a persistent lack of available homes. Mark Stapp, a real estate expert from Arizona State University, recently sat down to break down the forces that are making it tough for both buyers and renters. He pointed out that while apartment rents have cooled off a bit, a drop in new building permits and fewer completed units means that relief probably will not last long.

Arizona keeps adding people and jobs, which keeps demand for housing strong. But builders are being careful not to overbuild like they did in the past, so the supply stays tight. At the same time, many homeowners who locked in low mortgage rates are choosing to stay put rather than sell and take on a new loan at a much higher rate. That lock-in effect is keeping the inventory of existing homes even thinner.

For buyers looking at homes under $450,000, which is around the median price, the pickings are especially slim. Most of what is on the market sits in higher price brackets. Some buyers are looking further out to places like Apache Junction, but the extra cost of commuting can eat up any savings from a cheaper home price. On top of that, tariffs on Canadian lumber and rising energy prices are pushing up construction costs, which eventually gets passed along to buyers.

Still, Stapp says this is not 2007 all over again. That crash came from too much risky lending and financial leverage. Today's problems come from outside forces like global trade issues, energy prices, and material shortages, not from a fragile banking system. Builders are adapting by offering incentives and putting up more townhomes and duplexes, often called the missing middle. Stapp stressed that making housing affordable again is key to keeping the local economy growing and making sure the region can keep attracting new workers.