Higher mortgage rates may boost Arizona multifamily market

AZ Big Media reported that elevated mortgage rates and slowing residential construction could strengthen the Arizona apartment market. High borrowing costs are driving potential buyers to remain in rental properties longer, which presents new opportunities for multifamily investors across the state. [1]

According to AZ Big Media, a new research report from Marcus & Millichap indicates that mortgage rates exceeding 7% are forcing many prospective homebuyers to delay property purchases. At the same time, existing homeowners holding lower fixed mortgage rates are choosing to stay in place, further limiting home turnover. [1]

The research brief from Marcus & Millichap highlights that the shift in housing demand is expected to favor apartment owners and investors. This commercial momentum is particularly targeted at expanding metropolitan markets such as Phoenix and Tucson, according to AZ Big Media. [1]

Arizona maintains a robust regional economy driven by key industries, including real estate, professional services, technology, aerospace, and semiconductor manufacturing, Grokipedia notes. The state achieved a real gross domestic product of 433.8 billion dollars in 2024. [4]