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Inside Arizona Lending
nOVEMBER 2026
Housing Market / Construction Lending / Building Activity
Phoenix Housing Market Update
The Phoenix housing market recorded 4,818 active listings in October 2026, up 7.8% from September, while closed sales declined from 965 to 942.
The median sales price moved from $445,900 to $435,000, and homes sold spent an average of 71 days on the market.
The lower median does not necessarily mean individual homes lost value; it can also reflect more lower-priced homes selling that month.
For a fix-and-flip or ground-up construction project intended for sale, these figures highlight the need to plan beyond construction completion. Competing listings influence pricing decisions, and the selling period adds interest, insurance, and other carrying costs. Citywide figures provide context, while nearby comparable sales help assess a specific project’s resale plan.
We bring that local context into loan reviews, considering whether the budget and repayment timeline allow time to finish and sell. Our in-house lending team stays involved through payoff, giving borrowers a direct contact when project questions or schedule changes arise.
Banks Tighten Construction Loan Standards
Banks tightened lending standards for construction and land development loans during the third quarter of 2026 as borrower demand weakened. Similar conditions affected multifamily and other commercial real estate financing.
Most residential mortgage categories saw little change in approval standards, showing that the tightening was more pronounced in commercial real estate lending.
Looking specifically at construction loans, the October 2026 survey results show that 19% of responding banks tightened approval standards, 3.4% eased them, and 77.6% made no change. Most banks maintained their requirements, but stricter standards were more common than easier approvals. Meanwhile, 32.7% reported weaker construction loan demand, compared with 6.9% reporting stronger demand.
For developers, these figures highlight two separate trends: some banks became more selective about approving construction loans, while borrower demand also softened. Tighter approval standards do not automatically mean higher interest rates. These national findings provide context, but Arizona construction financing requirements still depend on the lender and the individual project.
Our direct lending team can review your construction financing needs and explain the proposed loan terms and construction draw structure before closing.
Builders Cut New Home Prices
Homebuilders are using price cuts and sales incentives to attract buyers facing high borrowing costs.
Nationally, 43% of builders reduced prices in October 2026, while 65% offered sales incentives. Higher mortgage rates and construction costs weighed on builder confidence as prospective buyer traffic weakened.
The share of builders cutting prices increased from 38% in September to 43% in October. Builders also used mortgage rate buydowns to lower buyers’ borrowing costs. These offers can help sell homes, but they can also reduce profit margins already pressured by labor, material, and financing expenses.
For Arizona developers and borrowers building or renovating to sell, a competing new home may offer both a lower price and mortgage assistance. Nearby builder offers deserve attention alongside comparable sales when setting a resale price and budgeting for potential concessions.
That local perspective is part of Lukrom’s broader approach to real estate: understanding the market, the project, and the people behind it.