Will the Fed Raise Rates in July 2026? What Arizona Buyers Should Know

The Fed is unlikely to raise rates in July 2026 during the first three weeks of the month, but the July 28-29 FOMC meeting carries roughly a 1-in-3 chance of a 25-basis-point hike, according to CME FedWatch data. For Arizona buyers, that means mortgage rates are expected to stay in the mid-6% range for now — and waiting for a dramatic drop may cost you more than acting today.

At Pillar Mortgage Group, a Scottsdale-based brokerage serving buyers across Phoenix and the Valley, we watch these decisions closely so our clients can plan instead of guess. Here's what the July rate environment actually means for you.

Will the Fed Raise Rates in July 2026?

Probably not — but it's not off the table. There is no scheduled Fed decision until the July 28-29 meeting, and markets currently price in about a one-in-three probability of a quarter-point increase. Two inflation reports land before that meeting: the Consumer Price Index (CPI) on July 15 and the Personal Consumption Expenditures (PCE) index on July 31. A hotter-than-expected reading could nudge rates higher; a cooler number could ease them slightly heading into August.

How the Fed Actually Affects Your Mortgage Rate

The Fed does not set mortgage rates directly. The federal funds rate influences short-term borrowing, but 30-year mortgage rates track the 10-year Treasury yield and investor expectations about inflation. That's why mortgage rates can move even when the Fed holds steady — and why a Scottsdale buyer shouldn't wait for a Fed cut to feel relief at the closing table. As of early July 2026, Arizona's 30-year fixed sits near 6.69% and the 15-year near 6.06%, per Bankrate.

What Phoenix and Scottsdale Buyers Should Do Right Now

Focus on what you can control. Metro Phoenix inventory is up roughly 15-20% year over year, and more than a quarter of 2025 listings saw price reductions — conditions that hand buyers real negotiating leverage. The Arizona median sale price is around $465,000, up only about 1% from a year ago. A slightly higher rate on a well-negotiated purchase price, with a plan to refinance later if rates fall, often beats sitting on the sidelines. Ready to browse what's available? Start at Arizona Luxury Property Search and get pre-approved so you can move quickly when the right home appears.

Frequently Asked Questions

Will mortgage rates go down in July 2026?

Most forecasts expect Arizona mortgage rates to hold broadly flat in the mid-6% range through July 2026, with the 30-year fixed hovering near 6.4%-6.5% nationally. Rates could dip slightly if the July inflation reports come in cool, or tick up if they run hot ahead of the July 28-29 Fed meeting.

Does the Fed set mortgage rates?

No. The Fed sets the federal funds rate, which affects short-term borrowing. Long-term mortgage rates are driven mainly by the 10-year Treasury yield and inflation expectations, which is why mortgage rates can rise or fall independently of Fed decisions.

Should I wait to buy a home in Arizona until rates drop?

Waiting carries its own cost. With Phoenix-area inventory up and many sellers cutting prices, buyers currently have negotiating leverage that could disappear if rates fall and demand surges. Many Arizona buyers purchase now at a favorable price and refinance later if rates decline.