Interest rates are not a regional thing. They are the same throughout the US and are at under 4% for a 30 year fixed for those with good credit. The rates are historically low right now. In the past month they have gone as low as 3.6%.
As far as the home prices in Flagstaff, they are fairly comporable to what they were in 9 years ago. I bought my home in 2003 and it is now worth about what I paid for it then. It varies based on neighborhood, home type and size. Home prices like those elsewhere increased significantly in 2005-2007 and then dropped. We are fortunate that we did not see a huge drop like in other parts of Arizona. Is there a particular area or home type (single family, townhome, etc) that you would like to know more about?
Make it a great day!