Monday Morning Real Estate Mojo

Aug 3
7 min read

August 2, 2026

Edition #200

Mojo defined

1. A term used for self-confidence, self-assuredness.

2. The basis for belief in ones self in a situation.

3. Efficacy to bolster confidence.

4. Ability to bounce back.

There has been so much misinformation about the real estate market in the national media lately...our goal is always to provide our clients with accurate, real time market data.

Luxury Markets Strengthen While Buyers Gain Ground in

Affordable Areas

The Greater Phoenix housing market remains relatively stable, with the average Cromford Market Index (CMI)* increasing 0.3% from last month. While this represents a slight improvement for sellers compared to last week, the overall market continues to lack a clear direction. One trend, however, is becoming increasingly evident: luxury markets are strengthening for sellers, while more affordable areas continue to shift in favor of buyers.

The number of cities trending toward buyers dropped slightly to eleven this week, down from twelve last week. Six cities are moving in a direction that favors sellers, while Phoenix remained essentially unchanged. Paradise Valley continues to separate itself from the rest of the Valley, posting an impressive 32% increase in CMI and overtaking Fountain Hills as the strongest seller's market. Cave Creek (+8%) and Glendale (+5%) also posted notable gains, though well behind Paradise Valley.

On the buyer-friendly side, the Southeast Valley continues to experience the most significant shift. San Tan Valley (-9%) led the decline, followed by Tempe (-8%), Chandler (-6%), and Maricopa (-5%). Queen Creek also slipped another 4% and remains the weakest market in the Valley, continuing to provide buyers with increased negotiating opportunities.

Overall market conditions remain remarkably consistent, with 8 cities currently in a seller's market, 4 in a balanced market, and 6 in a buyer's market. While conditions vary considerably from one community to another, pricing and local market dynamics remain more important than ever when buying or selling a home.

*Cromford Market Index™ (CMI) is a value that provides a short term forecast for the balance of the market. It is derived from the trends in pending, active and sold listings compared with historical data over the previous four years. Values below 100 indicate a buyer's market, while values above 100 indicate a seller's market. A value of 100 indicates a balanced market.

The Hidden Story Behind Phoenix Home Prices

The latest update to the Case-Shiller Home Price Index provides a new way to look at home values by factoring in inflation. Instead of only showing "nominal" home prices (the actual sale prices at the time), the updated charts allow us to view prices in today's dollars using either the national Consumer Price Index (CPI) or the Phoenix Metro CPI.

As the graph below illustrates, adjusting for inflation paints a very different picture of the Greater Phoenix housing market. While home prices remain above where they were several years ago, today's homes are actually 14% less expensive than they were at the May 2022 market peak and 17% less expensive than they were during the housing boom in December 2005, after accounting for inflation.

The graph also highlights another important trend: inflation-adjusted home prices in Greater Phoenix have been gradually declining over the past two years. That movement aligns with the Cromford Market Index remaining below 90 for much of that period, reflecting a market that has steadily become more balanced and increasingly favorable for buyers.

Looking beyond Phoenix, each of the other 19 metropolitan areas tracked by the Case-Shiller Index tells a different story. In fact, Atlanta, Boston, and Charlotte are the only three major metro areas where inflation-adjusted home prices are currently at or near all-time highs.

The takeaway is an important one: while home prices may still appear elevated on the surface, inflation has significantly changed the purchasing power of today's dollar. As the chart demonstrates, today's buyers are paying considerably less in real, inflation-adjusted terms than they would have at the peak of the market just a few years ago. That's an important perspective for anyone wondering whether it's still a good time to buy in Greater Phoenix.

Mortgage Rates Retreat From One-Year Highs—but Inflation Risks Remain

This week was a story in two halves: a bond selloff late last week pushed mortgage rates to their highest point in over a year, then a calmer Middle East headline, a still-hawkish Federal Reserve, and the triple-stack of inflation data put buyers back near where they started. Here's what moved the needle — and what it means for you.

Rates, in Plain English

The bond market is the engine that drives what your lender quotes you, so when it sells off hard, mortgage rates jump; when it rallies, they pull back. Last Thursday (the tail end of the prior week), the bond market sold off on renewed attacks in the Red Sea and fears around the Strait of Hormuz — the narrow waterway between Iran and the Arabian Peninsula through which a big share of the world's oil flows. Oil pushed back toward $100 a barrel and the 10-year Treasury yield (the long-term benchmark that mortgage rates track most closely) broke through technical resistance levels not seen since October 2023. Mortgage rates hit a fresh one-year high.

Monday opened this week differently. Mortgage-backed securities — the bonds backed by home loans that lenders package and sell — posted gains of 13 basis points to start trading. A basis point is one one-hundredth of a percentage point, so 13 bps equals 0.13%. On a $400,000 loan, that's roughly $30 a month in payment. Tuesday brought another round of bond buying as U.S. and Iran tensions eased, the 10-year yield slipped from its Friday close, and oil pulled back. Wednesday held the rally into the Federal Reserve's 2 PM ET policy statement.

The Federal Reserve

The Federal Reserve — the central bank whose decisions set the tone for every interest rate in the economy — held its benchmark policy rate steady Wednesday for the fifth meeting in a row. That part was expected. The surprises were the dissent and the curve.

Three of the twelve voting members wanted to raise rates. That kind of internal disagreement hasn't shown up in recent Fed meetings, and it matters because it tells you the inflation hawks inside the room are no longer a fringe opinion. The market reaction showed up as a steepening yield curve: longer-term Treasury yields moved higher while shorter-term rates actually fell. That pattern means traders now see rate hikes, not cuts, as the bigger near-term risk. The bond market gave back some of its Wednesday gains into Thursday but remained steady overall; mortgage-backed securities showed a modest intraday improvement.

Geopolitics and Oil

The previous week's sell-off was driven by Houthi attacks on Red Sea shipping and renewed worries around the Strait of Hormuz. Those fears faded this week as the U.S. and Iran appeared to step back from escalation. Oil dropped from last week's peak near $100, easing the inflation anxiety that had been building. Even with this week's pullback, oil prices remain the single biggest wildcard for inflation — when crude pushes toward $100, two things happen at once: your gas bill goes up, and the bond market starts pricing in more inflation, which pulls mortgage rates up with it. When oil eases — even modestly — mortgage rates get a chance to recover some ground.

Economic Data

The early press on Friday came from the Employment Cost Index, which printed at 0.9% for Q2 versus the 0.8% expected. A hot wage growth number that reminds the Fed (and the bond market) that labor-driven inflation isn't fully behind us. The revised Consumer Sentiment reading of 55.2 also came in above expectations, suggesting consumers are still willing to spend. But the bigger story was Japan. Both Japan's Ministry of Finance and signals from the U.S. Treasury indicated active intervention to support the Yen, which mechanistically involves selling dollar-denominated bonds including U.S. Treasuries. When that hits a thin, summer-Friday tape with month-end positioning, you get a sell-off that looks bigger than the fundamentals justify but it's still a sell-off.

Beyond the Friday data, the next major checkpoints are the August 12 Consumer Price Index (CPI) release and the BLS jobs report the following Friday. The market is now actively pricing in roughly 80% odds of a rate hike at the September Federal Reserve meeting — a flip from the near-certainty-of-cuts narrative that dominated just a few weeks ago. Across the Atlantic, the European Central Bank has openly flagged rate-hike risks of its own, which strengthens the U.S. dollar and tightens global financial conditions.

What We're Watching In The Coming Weeks

• Week of August 4: relatively thin data calendar before the next big test.

• Tuesday August 12: Consumer Price Index (CPI) report — the last major inflation print before the September Federal Reserve meeting.

• Mid-September: Federal Reserve policy meeting. Market currently pricing roughly 80% odds of a rate hike.

Quick Numbers From the Week

• Monday 7/27: MBS +13 basis points at the open (≈ $30/month on a $400k loan).

• Tuesday 7/28: Bond market rally; 10-year Treasury yield slipped from its Friday close; oil eased.

• Wednesday 7/29: Second day of bond relief ahead of the Fed's 2 PM ET policy statement.

• Wednesday 7/29, 2 PM ET: Fed held its benchmark rate steady (fifth straight meeting). 3 of 12 voting members dissented in favor of a hike. Yield curve steepened.

• Thursday 7/30: Modest intraday improvement in mortgage-backed securities; trading light ahead of Friday's data triple-stack.

• September Federal Reserve meeting: market now pricing roughly 80% odds of a rate hike, up from near-zero a few weeks ago.

Housing

The Greater Phoenix housing market remained relatively stable, with the average Cromford Market Index (CMI) increasing 0.3% from last month, signaling only a slight improvement for sellers.
Luxury markets continue to outperform. Paradise Valley posted a 32% increase in CMI, overtaking Fountain Hills as the Valley's strongest seller's market, while Cave Creek and Glendale also showed gains.
Affordable markets continue to favor buyers. San Tan Valley (-9%), Tempe (-8%), Chandler (-6%), and Maricopa (-5%) experienced the largest shifts toward buyers, giving purchasers more negotiating power in those communities.

Economy:

Mortgage rates improved after briefly reaching a one-year high. Easing tensions in the Middle East and lower oil prices helped the bond market recover, bringing some relief to borrowers by the end of the week.
The Federal Reserve held interest rates steady for the fifth consecutive meeting, but three Fed members favored a rate hike—a sign that inflation concerns remain and that a September rate increase is now viewed as a strong possibility.
Inflation remains the biggest economic wildcard. Stronger-than-expected wage growth, resilient consumer spending, and oil prices continue to keep pressure on inflation, with the August 12 Consumer Price Index (CPI) report expected to be the next major market-moving event.

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