--- title: "Arizona Trust Deed Investing, October 2026: The Market Read" description: "Arizona market read for private capital, October 2026: rates, real yields, bank credit standards, collateral conditions and ninety years of cycle history." canonical: "https://kenwoodmortgage.com/insights/arizona-real-estate-market-october-2026-investors/" last_updated: "2026-10-21" --- Insights · October 18, 2026 # Arizona Real Estate, October 2026: A Read for Private Capital A private lender's read on the Arizona market for the people who place capital behind it: the price of money, the state of credit, the collateral, and the cycle record. Every reading dated. *By [Alex English](https://kenwoodmortgage.com/about/alex-english/), NMLS #2654939, Kenwood Mortgage Investments* Kenwood has made private, first-position loans on Arizona real estate since 1992, through the 2006 to 2009 bust and every market since. This read is for the people who place capital behind that kind of lending. It describes the market, not an investment: nothing here is an offer or a solicitation, and we describe structure, never yield. **Investment involves risk, including potential loss of principal.** If you borrow rather than lend, our [read for borrowers](https://kenwoodmortgage.com/insights/arizona-real-estate-market-october-2026/) goes county by county. - 7.40 % 30-year mortgage, week of Oct 15, 2026 - 2.64 % 10-year real yield, Sept 2026; 5 of 285 months since 2003 at or above - -3.7 Bank standards on construction and land loans, Q3 2026: net loosening **The short version.** Money is expensive and credit is not tight. Rates on the safest dollars are at levels last seen in 2008, while banks are easing, not tightening, on construction and land loans. Arizona collateral is selling more slowly, not cheaper in Phoenix values. History says it is credit, not housing volume, that separates a slowdown from a bust, and credit is the side that looks calm. ## What is capital priced against right now? **The safe alternative pays more than it has in years.** The 10-year inflation-protected Treasury yield averaged **2.64%** in September 2026. Only 5 of the 285 months since 2003 sit at or above it, and the last one before now was November 2008. That is the bid any private loan competes with for the same dollar. 10-year inflation-protected real yield, monthly, 2003 to 2026 Chart data: The real yield ranged from -1.07% to 2.89% over 285 months. September 2026 reads 2.64%. 5 of 285 months sit at or above it: 2007-06 at 2.69%, 2007-07 at 2.64%, 2008-10 at 2.75%, 2008-11 at 2.89%, 2026-09 at 2.64%. - Monthly average - Months at or above September 2026's 2.64% Only five months clear the dashed line: June and July 2007, October and November 2008, and September 2026. U.S. Treasury, via FRED, monthly averages, 285 months from January 2003. The rest of the price of money, as of October 18, 2026: - 30-year mortgage, week of Oct 15 **7.40%, unchanged on the week** - 15-year mortgage, week of Oct 15 **6.71%, down 2 basis points** - Federal funds target range, raised at the Sept 16 meeting **3.75% to 4.00%** - 10-year Treasury, September average **4.99%, highest of 201 observations** The 7.40% mortgage average is the highest since November 16, 2023, and it is not a record: 1,385 of the 2,899 weekly readings since 1971 sit at or above it. None of this forecasts a return. The coupon and the structure of any one loan come from that loan’s own documents, not from a market read. ## Is credit tight? **No. Banks are easing on construction and land, and the credit warnings that came before past busts are quiet.** Bank standards on construction and land loans, 2013 to 2026 Chart data: Net percent of banks tightening standards on commercial construction and land loans, 52 quarterly surveys. Highest 80.9; latest -3.7 for the July 2026 survey. 11 of 52 readings are below zero, meaning net loosening: 2013-10 at -9.9, 2014-01 at -8.1, 2014-04 at -4.2, 2014-07 at -9.6, 2014-10 at -10.8, 2015-01 at -2.8, 2015-04 at -2.7, 2021-07 at -7.0, 2021-10 at -9.4, 2022-01 at -10.3, 2026-07 at -3.7. - More banks tightening than easing - More banks easing than tightening Net percent of banks reporting tighter standards on commercial construction and land loans, Federal Reserve Senior Loan Officer Survey, 52 quarterly surveys from October 2013. The July 2026 survey reads -3.7, the first net easing since January 2022. On the Federal Reserve’s survey of bank lending officers, standards on commercial construction and land loans read **-3.7** for the third quarter of 2026: net loosening, the first negative reading since the January 2022 survey, and the 17th percentile of 52 quarters. Standards on commercial and industrial loans read **0.0**, exactly the median of 146 quarters and down from 18.5 five quarters ago. The other two warnings history points to are also calm. The spread of Baa corporate bonds over the 10-year Treasury averaged **1.48%** in September, and only 14 of the 441 months since 1990 sat at or below it. Single-family mortgage delinquency fell to **1.86%** in the second quarter of 2026, the latest published, at the 20th percentile of 142 quarters. ## What is happening to the collateral? **Arizona homes are taking longer to sell. Phoenix values are flat.** In September 2026, Arizona had **29,571 homes listed for sale**, 1,863 more than a year earlier, and the median listing sat **65 days**, against the state’s 52-day median since 2016 (Realtor.com via FRED). Those are asking-price listings, not sales. Phoenix home values were flat, **+0.05%** on the year to July on the S&P Cotality Case-Shiller index. Our [read for borrowers](https://kenwoodmortgage.com/insights/arizona-real-estate-market-october-2026/#county-by-county) has the 11 counties we track. For a lender, slower sales matter more than lower asks: the exit takes longer, and carry is what a slow exit costs. Exit liquidity is read per property and per submarket, because it varies far more across Arizona than any statewide figure shows. ## Is this 2007? What ninety years of cycles say *This is history, not a forecast. We make no predictions about Arizona prices. It is here because “is this 2007” is a question we hear often, and the record answers it better than a feeling does.* **Housing volume turns first, and it does not tell you what follows.** From 1957 through 2007, housing starts peaked 11 months to about two years before seven of the nine recessions. The two exceptions: in 1981 the lead was 6 months, and that peak was a rebound inside a longer bust; in 2001, starts dipped 15.8% into July 2000, then climbed back to 1,670,000 a year through the recession itself. In the cycle record we use, starts also fell between 19% and 49% in five episodes that never became recessions: 1966, 1984, 1994, 2018 and 2022. **What separates a slowdown from a recession, historically, is credit.** Around 1990, 2001 and 2007, banks tightened hard and the price of risky borrowing rose off its low. Only in 2001 did it climb a full percentage point before the recession began; in 1990 it got there after the start, and in 2007 around the month the recession began. Ahead of 2001 and 2007, the two cycles with a payments record, borrowers had also started missing payments. Ahead of 1994 and 2018, none of that happened. Today, construction and land lending standards sit at the calm end of their history, and commercial and industrial standards sit at its median. **The record offers two partial matches, not one.** The credit picture resembles 1994. The policy-and-oil picture, with a central bank that raised in September and energy that has not come down, resembles 1973. That split is why our caution points at time rather than at value. **For Arizona, the closest analogue is 1988 to 1991, not 2006.** Permits fell for years while prices slid slowly, and the damage landed in investor-financed product rather than owner-occupied homes. In each of the three Arizona busts the record covers, population growth slowed sharply: from 5.8% to 2.8% a year in 1973 to 1975, from 3.9% to 1.6% in 1987 to 1990, and from 3.3% to 1.0% in 2006 to 2009. In 2022, which did not become a bust, it never fell below 1.1%. Arizona is still growing, but the two latest annual estimates we hold disagree on how fast. The Census Bureau’s puts 2025 growth at 0.89%, down from 1.40% in 2024; the state Office of Economic Opportunity’s puts the year to July 2025 at 1.2%. One sits below the 1.1% that 2022 held and one above it, so we read this signal as mixed, not as clear in either direction. ## What stands between capital and a loss **A recorded first position behind an Arizona asset, a value read conservatively, and the stress named rather than implied.** - **Structure.** A first-position deed of trust recorded with the county, an ALTA lender’s title policy in the full loan amount, full recourse, interest only, Arizona property. - **Which value.** “Conservative” means the low supported read of value, and the stress is applied on top of it once. A value that already carries a stress does not get stressed again. - **The stresses in force as of October 18, 2026.** On bridge loans, value is tested for a 10% decline. After-repair value comes from comparable sales net of seller concessions. Carry is tested at 15 to 18 months, not at the planned term. A refinance exit is tested at a rate above what a conforming buyer is quoted today. - **The downside path, stated in words because that is all we can honestly state.** If a loan has to be worked out, recovery depends on Arizona’s anti-deficiency rules for the property type and on how many bidders show up at the trustee sale. We do not hold a standing measurement of third-party bidding at Maricopa County trustee sales, and we do not imply we have priced something we have not measured. ## What “Cautious” means at Kenwood **Conditions are Cautious as of October 18, 2026, and the October 18 weekly review held that posture with no change to our lending terms.** Cautious is a way of writing the loan, not a reason to stop writing them. In this posture we put time and funding ahead of leverage. On a bridge loan we prefer a sale exit and want to see the path to it. Loans in secondary and outer-ring areas are sized more conservatively, and values are read against what comparable homes actually net today, after the concessions and incentives sellers are paying. **Our read:** nothing in the credit readings we can observe argues for a tighter posture, and nothing in the price of money argues for a looser one. So we held. ## What this read cannot tell you We hold no measurement, as of October 18, 2026, on any of these, so none appears above: - How many bidders appear at Arizona trustee sales, or how many Maricopa County notices of trustee sale are filed each month. - How Arizona foreclosure filings compare with a year ago. A level we do not have is stated as missing, never filled in from a national figure or a rule of thumb. This read does not cover commercial property. It is a market read: it reports no return, yield or loss rate for any loan. Examples of loans Kenwood has funded are on our [recent deals](https://kenwoodmortgage.com/recent-deals/) page. ## The figures in this article, in one table As of October 18, 2026. Figures marked carried forward come from an earlier read, not the current month. | What | Reading | Date and source | |---|---|---| | 30-year mortgage | 7.40%, unchanged on the week; highest since Nov 16, 2023 | Week of Oct 15, 2026; Freddie Mac | | 15-year mortgage | 6.71%, down 2 basis points | Week of Oct 15, 2026; Freddie Mac | | Federal funds target range | 3.75% to 4.00%, raised 25 basis points | Sept 16, 2026 meeting; Federal Reserve | | 10-year Treasury | 4.99% September average, highest of 201 monthly observations since 2010 | September 2026; U.S. Treasury via FRED | | 10-year real yield | 2.64%; 5 of 285 months since 2003 at or above | September 2026; U.S. Treasury via FRED | | Bank standards, construction and land | -3.7, net loosening; 17th percentile of 52 quarters | Q3 2026; Federal Reserve survey | | Bank standards, commercial and industrial | 0.0; median of 146 quarters | Q3 2026; Federal Reserve survey | | Baa corporate spread over 10-year | 1.48%; 14 of 441 months since 1990 at or below | September 2026; Moody’s and U.S. Treasury via FRED | | Single-family mortgage delinquency | 1.86%; 20th percentile of 142 quarters | Q2 2026, latest published; Federal Reserve via FRED | | Arizona homes listed for sale | 29,571, up 1,863 on the year | September 2026; Realtor.com via FRED | | Arizona median days on market | 65, against a 52-day median since 2016 | September 2026; Realtor.com via FRED | | Phoenix home values | +0.05% year over year | July 2026; S&P Cotality Case-Shiller | | Market posture | Cautious, held at the Oct 18 weekly review, which changed no lending parameter | Oct 18, 2026; Kenwood | **Questions about this read?** Call us at [(480) 783-8800](tel:+14807838800). Lending on Arizona real estate since 1992. General market information, not financial, investment, tax or legal advice, and not an offer or a solicitation to buy or sell any security or interest in a loan. Investment involves risk, including potential loss of principal. Past market behavior does not predict future results, and nothing here projects a return. Figures come from public real estate and economic data and from our own records, and all of it will change. Last updated October 21, 2026 --- ## Kenwood Mortgage Investments 7950 East Redfield Road #110 Scottsdale, Arizona 85260 Call: [(480) 783-8800](tel:+14807838800) Fax: (480) 783-8808 Email: [loans@kenwoodmortgage.com](mailto:loans@kenwoodmortgage.com) MB #13866 | NMLS #170223 Kenwood Mortgage Investments is a licensed Mortgage Broker in the state of Arizona. NMLS MB #13866 | NMLS #170223. This is not a commitment to lend. All loans subject to credit approval. Guidelines subject to change without prior notice. This information is provided to assist business professionals and is not an advertisement extended to the consumer as defined by Section 226.2 Regulation Z. EOE. Equal Housing Lender.