Optimism Emerges for 2026 Home Sales: What Rising Incomes Mean for Buyers and Sellers

Optimism Emerges for 2026 Home Sales: What Rising Incomes Mean for Buyers and Sellers

As we close out 2025 and look ahead to 2026, there’s a shift happening beneath the surface of the housing market — and it’s grounded less in headlines and more in fundamentals.

One of the most important factors? Income growth.

Since 2020, incomes in Maricopa County have risen significantly, helping reset the affordability conversation and laying the groundwork for renewed optimism heading into 2026.

Why income matters more than headlines

When journalists talk about housing affordability, they often reference median household income. What’s less commonly explained is that “household income” includes very different categories.

The U.S. Census distinguishes between family households (two or more related people living together) and non-family households (individuals living alone or with roommates). Non-family household income is typically much lower and is more useful when measuring rental affordability. Family household income, on the other hand, is a better benchmark for homeownership.

When we look at the data through that lens, the picture becomes clearer.

Income growth in Maricopa County

From 2020 to 2024, median household income in Maricopa County rose 33%, increasing from $68,000 to $91,000.

Breaking that down further:

• Non-family household income rose from $44,500 to $59,000
• Family household income rose from $80,000 to $108,000
• Married family household income rose from $95,000 to $126,000

This kind of income growth matters because lending guidelines are based on gross income, not headlines.

What this means for buyers

The lending industry generally considers 28% of gross income to be an affordable monthly housing payment. For many family households in Maricopa County, that translates to a monthly payment in the $2,500 to $3,000 range.

With mortgage rates holding steady around 6.25%, that payment range supports home prices between approximately $350,000 and $500,000.

In practical terms, that budget often supports a 1,500 to 1,800 square foot single-family home — trending in the mid-$300s in parts of the West Valley and the mid-$400s in much of the Southeast Valley.

What’s important to note is that incomes in Maricopa County have not been stagnant. Home values, by contrast, have largely been flat for the last three years while incomes worked to catch up and mortgage rates stabilized.

Inventory under $500,000 now represents roughly 57% of all active listings and is up 16% from last year. With rates holding in the low 6% range for the past several months, buyer demand and confidence are beginning to improve as we approach 2026.

What this means for sellers

On the seller side, recent activity points to cautious optimism.

November 2025 closings were up 3.3% compared to last November — but that number understates the improvement. November 2024 had 19 closing days, while November 2025 had only 18. When adjusted for that difference, this year’s November actually averaged about 23 additional closings per day, representing closer to a 9% improvement.

December activity is also pacing ahead of last year, with roughly 14 more closings per day on average so far. If this momentum carries into January, sellers could see stronger-than-expected contract activity early in 2026.

Inventory, market balance, and what to expect next

The key question heading into the new year is how much inventory will come to market to meet that demand.

January is typically a strong month for luxury, retirement, and seasonal community listings, while new listings across all price points often peak in March. This early-year surge in inventory can lead to an increase in price reductions later in the spring, depending on whether the market enters the year favoring buyers, sellers, or neither.

Recent improvements in demand, combined with declining supply, are pushing the Cromford Market Index back toward a more balanced state.

While Greater Phoenix remains a buyer’s market overall, several central and established cities have recently shifted back into seller’s markets. Phoenix, Mesa, and Tempe all made that move within the last 30 days. Much of the Northeast and Southeast Valley is now in seller’s markets, while developing edge cities tend to lag behind.

The West Valley remains mixed, with some cities balanced and others still favoring buyers. Pinal County cities are largely buyer’s markets as well, with a few exceptions.

A realistic outlook for pricing

Even in cities that have shifted back into seller’s markets, upward pressure on pricing is unlikely in the very short term.

Price movement typically lags market shifts by several months. For sellers, that means the near-term benefits are more likely to show up as increased showing activity, shorter days on market, and reduced pressure to cut price — especially as the spring buying season approaches.

For both buyers and sellers, the takeaway is the same: fundamentals are improving, optimism is returning, and 2026 is shaping up to be a year where preparation and timing matter more than urgency.

If you’re planning a move this year or next, understanding how income growth, inventory, and market balance intersect can help you make clearer, more confident decisions. We’re always happy to help you translate this data into what it means for your specific situation.