Updated October 17, 2026
The 30-year fixed mortgage rate recently exceeded 7%, the highest in a year according to Mortgage News Daily. That was partly because the Federal Reserve raised the benchmark target fed funds rate by ¼ point, to 4%. Find out more about how Treasury Yields Affect Mortgage Rates.
How does this impact buyers and sellers of Paradise Valley homes? According to proprietary research, in the following four ways.
Table 1. Paradise Valley Home Sales | Cash | Non-Cash | Total | Cash % of Total Sales |
|---|---|---|---|---|
Q1-Q3 2021 | 109 | 184 | 293 | 37% |
Q1- Q3 2026 | 104 | 81 | 185 | 56% |
Percent Change 2021-2026 | -5% | -56% | -37% |
Source: Arizona Regional Multiple Listing Service. Single family homes in the Town of Paradise Valley, excluding sales in the zip code of 85253 that are actually in the cities of Scottsdale or Phoenix. It only includes homes with lots more than .7 acres to exclude smaller subdivisions, resort, condominium, and townhome communities.
1. Fewer Transactions Overall
Higher interest rates make the overall cost of buying homes higher, thus reducing the number of homes that sell. A study of the rise in interest rates that began in 2022 showed a nearly 40% decline in the number of home sales in Paradise Valley.
Specifically, between January 1, 2026 and September 30, 2026, there were 185 sales. During that same time period in 2021, there were 293 sales. That’s a 37% drop. (Study used MLS data, with the parameters of Town of Paradise Valley, single family homes with lots above .7 acres to eliminate condos.)
2. A Larger Drop in Financed Buyers
Further analysis revealed that, indeed, much of this decline was due to a 56% drop in the number of financed buyers. Specifically, in Q1-Q3 2026, there were 81 financed sales. In 2021, during that same time period, 184 purchases were financed, or a 56% drop.
3. A Smaller Drop in Cash Purchases
The same research showed that the number of purchases using cash-only also declined, but not by as much. During Q1-Q3 2026, there were 104 cash sales, compared to 109 in 2021. That’s only a 5% drop. As expected, higher interest rates did not have as much of an impact on buyers who didn’t need financing.
4. A Greater Ratio of Cash Purchases
As a result of these trends, cash buyers now account for more than half of Paradise Valley sales, compared to just over a third before interest rates started rising.
Behind the Headlines
Table 2. Cash Sales Only | Below $8M | $8M + | Total Cash |
|---|---|---|---|
Q1 - Q3 2021 | 101 | 8 | 109 |
Q1 - Q3 2026 | 69 | 35 | 104 |
Percent Change | -32% | 338% | -5% |
Source: Arizona Regional Multiple Listing Service. Single family homes in the Town of Paradise Valley, excluding sales in the zip code of 85253 that are actually in the cities of Scottsdale or Phoenix. It only includes homes with lots more than .7 acres to exclude smaller subdivisions, resort, condominium, and townhome communities.
As Table 2 shows, the impact of higher interest rates affects the homes below $8M more than those sold at $8M+. That's because a larger percentage of sales in the high end price points are paid with cash. The number of cash sales dropped by almost a third below $8M. Those at higher price points nearly quadrupled. Interestingly, the total number of cash sales only dropped 5%.
In a Nutshell
The Federal Reserve projected it may raise rates again in its fight to tame inflation. This affects variable rate mortgages directly, and fixed-rate mortgages indirectly via its impact on Treasury yields. If rates continue to increase, expect the number of financed purchases in Paradise Valley to decline, and the ratio of cash purchases to increase.
How It Affects Buyers
Cash buyers are in a more competitive position relative to buyers who need financing. They can close more quickly, since they don’t have to wait for financing. That means buyers who use financing may need to make other terms of their offer more attractive to compete with an otherwise comparable cash offer.
How It Affects Sellers
Sellers should consider their ability to close quickly to attract cash buyers. To attract financed buyers, sellers may want to consider concessions that reduce the buyer's borrowing cost rather than relying on a price reduction.
