How Interest Rates Are Impacting Arizona’s $1M+ Buyers

How Interest Rates Are Impacting Arizona’s $1M+ Buyers

In 2025, Arizona’s luxury home market is proving remarkably resilient — even as interest rates remain higher than in previous years. While traditional buyers have slowed, the $1M+ segment continues to show strength driven by strategic financing, wealth migration, and selective purchases.

According to Mary Murphy, founder of The Murphy Group, the psychology of the luxury buyer has shifted:

“High-end buyers aren’t walking away because of rates — they’re adapting. Many are paying partial cash or leveraging creative loan structures to protect liquidity.”

💰 The New Luxury Financing Landscape

Historically low interest rates made luxury mortgages more accessible through 2022, but today’s environment demands sharper financial strategy.

Current Snapshot (Q4 2025):

• Jumbo loan rates: 6.25%–6.75% on average
• Cash purchases: Roughly 40% of $1M+ transactions
• Hybrid strategies: Combination of cash + bridge loans to offset higher rates

💬 “Buyers are using more cash upfront and refinancing later,” says Mary.
“It’s less about cost and more about opportunity — if the right property appears, they’ll act.”

🧠 Buyer Psychology: Confidence Over Cost

Luxury buyers aren’t rate-sensitive in the same way entry-level buyers are. Their focus is on asset value, location, and timing.

Behavioral Shifts Noted in 2025:

• Preference for turnkey, move-in-ready properties to avoid construction financing
• Renewed interest in pre-construction luxury with builder incentives
• More cross-state buyers from California, Illinois, and New York escaping higher taxes

“We’re seeing clients lock in properties first, then optimize financing later,” Mary explains.
“In the luxury segment, lifestyle goals often outweigh rate concerns.”

📊 Regional Breakdown

🏡 What’s Next for 2026

Analysts predict interest rates may soften slightly heading into late 2026, which could unlock another wave of high-end activity — especially in new construction and remodel-ready properties.

📈 Forecast Insight:

• Jumbo mortgage demand expected to rise 8–10% if rates dip below 6%
• Continued preference for long-term holds and generational estates
• Luxury lending will increasingly emphasize portfolio flexibility

💬 “Our clients aren’t waiting for rates to drop,” Mary adds.
“They’re investing in Arizona’s long-term value, not chasing short-term savings.”

📲 Considering a Move in Arizona’s Luxury Market?

Whether you’re financing or purchasing in cash, The Murphy Group offers strategic guidance for high-end buyers navigating the 2025–2026 market.

📞 Start your luxury search or consultation today at www.mgsellsarizona.com

How Interest Rates Are Impacting Arizona’s $1M+ Buyers

In 2025, Arizona’s luxury home market is proving remarkably resilient — even as interest rates remain higher than in previous years. While traditional buyers have slowed, the $1M+ segment continues to show strength driven by strategic financing, wealth migration, and selective purchases.

According to Mary Murphy, founder of The Murphy Group, the psychology of the luxury buyer has shifted:

“High-end buyers aren’t walking away because of rates — they’re adapting. Many are paying partial cash or leveraging creative loan structures to protect liquidity.”

💰 The New Luxury Financing Landscape

Historically low interest rates made luxury mortgages more accessible through 2022, but today’s environment demands sharper financial strategy.

Current Snapshot (Q4 2025):

• Jumbo loan rates: 6.25%–6.75% on average
• Cash purchases: Roughly 40% of $1M+ transactions
• Hybrid strategies: Combination of cash + bridge loans to offset higher rates

“Buyers are using more cash upfront and refinancing later,” says Mary.
“It’s less about cost and more about opportunity — if the right property appears, they’ll act.”

🧠 Buyer Psychology: Confidence Over Cost

Luxury buyers aren’t rate-sensitive in the same way entry-level buyers are. Their focus is on asset value, location, and timing.

Behavioral Shifts Noted in 2025:

• Preference for turnkey, move-in-ready properties to avoid construction financing
• Renewed interest in pre-construction luxury with builder incentives
• More cross-state buyers from California, Illinois, and New York escaping higher taxes

“We’re seeing clients lock in properties first, then optimize financing later,” Mary explains.
“In the luxury segment, lifestyle goals often outweigh rate concerns.”

📊 Regional Breakdown

🏡 What’s Next for 2026

Analysts predict interest rates may soften slightly heading into late 2026, which could unlock another wave of high-end activity — especially in new construction and remodel-ready properties.

Forecast Insight:

• Jumbo mortgage demand expected to rise 8–10% if rates dip below 6%
• Continued preference for long-term holds and generational estates
• Luxury lending will increasingly emphasize portfolio flexibility

“Our clients aren’t waiting for rates to drop,” Mary adds.
“They’re investing in Arizona’s long-term value, not chasing short-term savings.”

📲 Considering a Move in Arizona’s Luxury Market?

Whether you’re financing or purchasing in cash, The Murphy Group offers strategic guidance for high-end buyers navigating the 2025–2026 market.

📞 Start your luxury search or consultation today at www.mgsellsarizona.com