Phoenix Area Housing Forecast 2025 – 2026: Price Predictions and More

Editor’s note: This report was updated in February of 2025 using the latest data. Here are the five most important points covered in this latest update:

1. Price Growth: Home prices in Phoenix are expected to rise steadily through 2025 and into early 2026.
2. Buyer Friendly: The Phoenix real estate market is becoming more buyer-friendly with increased inventory and price reductions.
3. Inventory Gains: Phoenix has experienced steady inventory growth, with a 39% increase in active listings from January 2024 to January 2025.
4. Price Cuts: This metro area had the highest percentage of price reductions among the nation’s 50 largest metro areas last month.
5. Price Prediction: Home values within the Phoenix housing market are expected to start climbing again in 2025 after remaining mostly flat in 2024.

Phoenix Real Estate Trends in Early 2025

A new round of forecasts for the Phoenix area real estate market suggests that home prices will rise steadily through 2025 and into early 2026.

The prospect of rising prices could light a fire under hesitant home buyers. Those who wait until later this year to make a purchase could encounter higher costs.

But buyers also have some things to celebrate. There’s a lot more inventory available these days, and more sellers are cutting their prices.

In this report: An update on current housing market trends in the Phoenix-Mesa-Scottsdale metro area, with a forecast stretching through 2025 and into 2026.

A Lot of New Inventory Coming Onto the Market

The Greater Phoenix real estate market is more buyer-friendly in 2025 than in previous years. There are more homes on the market these days, and many of them have had price reductions.

A recent report from Realtor.com showed that Phoenix has experienced steady inventory growth over the past year. Specifically, the total number of active real estate listings grew by nearly 39% from January 2024 to January 2025.

The number of new real estate listings has risen as well.

According to the Realtor.com report:

“Out of the top 50 metros, Sacramento (+31.7%), Phoenix (+27.3%), and Seattle (+24.7%) experienced the greatest bumps in newly listed homes this month compared with the same time last year.”

New listings refer to the number of homes recently put on the market within a specific period, reflecting fresh inventory and seller activity. In contrast, active listings represent the total number of homes currently for sale, including both new and older unsold properties.

The fact that both of these metrics rose over the past year is good news for Phoenix-area home buyers. It increases their chance for success while house hunting.

An increase in inventory can shift market dynamics—when there are more homes available, buyers tend to have more choices.

Price Reductions and a Shifting Market

Here’s some more good news for Phoenix home buyers. This metro area currently has a fairly high percentage of price reductions within the real estate market.

A price reduction occurs when a homeowner comes onto the market at one price and later reduces it, usually due to a lack of offers.

In January 2025, the Phoenix metro area had the highest percentage of price reductions among the nation’s 50 largest metro areas.

According to the Realtor.com report mentioned earlier:

“In addition to the Florida markets, Phoenix, Ariz. (25.5%) and Portland, Ore. (22.1%) rounded out the top five markets with the highest share of price reductions.”

Granted, not all sellers are willing to cut their asking prices. So home buyers should bear this in mind when making offers. But the fact 25% of listings were price-reduced shows just how much the Phoenix area has changed since the strong seller’s market of a few years ago.

Housing Market Forecast for 2025 – 2026

Recent forecasts for the Phoenix area real estate market predict that home prices will start climbing again in 2025, after remaining mostly flat over the past year.

According to Zillow, the median home value for the Phoenix-Mesa-Scottsdale metro area reached $452,778 in January of 2025. Prices changed little during 2024.

Looking forward, however, they expect home values to climb steadily.

Zillow predicted that the median home price for the Phoenix-Mesa area will rise by 3.1% from December 2024 to December 2025. This would mean that buyers who postpone their purchases until later this year could end up paying a higher price.

Here are some additional predictions for the Phoenix area real estate market, based on the current supply and demand situation:

1. More Choices for Buyers

With an increase in active listings, home buyers should have more properties to choose from during the rest of 2025. Buyers might also encounter less competition and have more time to decide on the best property.

2. Slower Pace of Sales

As the number of new listings increases, homes might take longer to sell. In a market with more inventory, sellers could see longer timeframes before their properties close a deal, shifting the market dynamic.

3. Shift Toward a Balanced Market

Recent reports show that housing market inventory has risen in Phoenix, which means the market is moving away from the seller-favored conditions seen in recent years. In 2025, a balanced market might mean that neither buyers nor sellers have a clear advantage.

4. Adjustment in Seller Strategies

With increased competition from additional property listings, sellers might need to adjust their pricing and marketing strategies in 2025. They might end up pricing their homes more competitively or offering incentives to attract buyers.

5. Potential for More Negotiations

With buyers having more options, the negotiation process could become more favorable for them. Sellers might be more willing to negotiate on terms or price, further shifting the market balance.

Population Growth a Big Factor

The Phoenix metro area’s population has swelled over the past few years, and this has had a direct and measurable effect on the housing market.

According to a May 2023 report from the U.S. Census Bureau:

“Fort Worth, Texas, had the largest numeric population gain in 2022, with an increase of 19,170 people. Phoenix, Arizona (19,053); San Antonio, Texas (18,889); Seattle, Washington (17,749); and Charlotte, North Carolina (15,217), rounded out the top five cities by numeric growth.”

That report went on to state that the Phoenix-Mesa-Chandler, AZ metro area population rose above the 5 million threshold for the first time ever. As of early 2025, Phoenix is the tenth most populous metro area in the United States.

This trend has spurred the local real estate market by bringing more home buyers into the picture. It also reinforces those 2024 – 2025 Phoenix housing market forecasts that predict a steady rise in home prices over the coming months.

Popular Destination for Bargain Hunters, Retirees

According to a separate Census Bureau report:

“Maricopa County, Arizona, remained the largest-gaining county in the nation, adding 56,831 residents in 2022, a gain of 1.3% since 2021. Domestic migration was the component of population change (i.e., births, deaths and migration), which made the largest contribution to Maricopa County’s growth.”

People relocate into the Phoenix area for a number of reasons:

• Cost of living: The cost of living in Phoenix is relatively low compared to other major cities in the United States. This is especially true for housing prices, which are significantly cheaper in Phoenix than in places like Los Angeles, San Francisco, or New York City.
• Weather: Central Arizona has a warm, sunny climate year-round. This is a major draw for people who are tired of suffering through frigid winters in other parts of the country.
• Job opportunities: The Phoenix area is home to a growing number of businesses and industries, with an unemployment rate that’s currently below the national average.
• Retirement: This metro area is a popular destination for retirees and has been for many decades. Retirees relocate there to enjoy the warm weather, relatively low cost of living, and abundance of activities and amenities.

This is partly why the local real estate market has experienced tight supply conditions over the years. It’s also one of the reasons why Phoenix housing market predictions suggest that prices will continue to rise for the foreseeable future of early 2025.

After all, those new residents need somewhere to live. Some of them will be long-term renters, while others will enter the housing market soon after relocating.

This population growth trend reduces supply, increases demand, and puts upward pressure on home values all across the Phoenix-area real estate market.

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Phoenix Housing Market FAQs

Home buyers and homeowners tend to have a lot of questions about local market conditions. We know, because we’ve been fielding those questions for over 15 years. Here are some FAQs relating to the Phoenix real estate scene in particular.

Will home prices in Phoenix rise or fall in 2025?

While no one can predict future real estate trends with complete accuracy, it seems likely that home prices in the Phoenix-Mesa-Chandler metro area will rise gradually through the rest of 2025 and into early 2026.

What we probably won’t see is steep double-digit price growth, like we saw during the pandemic years. A gradual rise is the most likely scenario for the rest of this year.

Slow and gradual price growth is actually the best-case scenario for the Phoenix real estate market and its residents. Slower growth will allow wages and incomes to catch up, improving affordability for future buyers.

How much have prices increased over the past five years?

Different sources use different methods for tracking and measuring home prices over time, so this can vary. According to Zillow, the median home value for the Phoenix-Mesa metro area inched upward by only 0.2% during 2024.

As for the past five-year trend, the median home price rose from around $293,000 in January of 2020 up to $453,000 in January of 2025. That’s an increase of 54.6%.

So the Phoenix real estate market has seen some serious growth over the past few years, despite the temporary downturn that occurred during 2022.

Is now a good time to buy a home in this market?

From an investment and timing standpoint, the rest of 2025 could be a great time to buy a home in the Phoenix area. Just make sure it fits into your long-term housing and financial goals.

The Phoenix real estate market currently has a decent supply of properties for sale, along with a slower pace compared to the pandemic home-buying frenzy. Home buyers who purchase a house over the coming months could potentially enjoy many years of equity growth.

However, affordability remains a challenge for many buyers in the Phoenix housing market, given the five-year price growth trend we talked about earlier.

Is it a good time to sell a house in the Phoenix area?

Inventory levels within the Phoenix real estate market have increased over the past couple of years. This means that sellers currently have more competition from other homeowners who are also trying to sell. But there are still plenty of buyers in the market, so with the right strategy a seller can succeed.

Is Phoenix more of a buyer’s or seller’s market in 2025?

According to a recent housing market update from Realtor.com: “Phoenix, AZ is a seller’s market in January 2025, which means that there are more people looking to buy than there are homes available.”

But it’s a “soft” seller’s market, in the sense that homeowners still need to price their homes wisely and be willing to compromise if they want to land a buyer.

The local real estate scene is expected to become more balanced during 2025.

Are homes still selling for more than the asking price?

Not as much these days. During the pandemic years (when the Phoenix real estate market was surging) more than half of homes were selling for more than the original list price.

But over the past few months, only about 15% – 16% of homes were selling about list price. This is another area where the Phoenix housing market has cooled down in early 2025.

How quickly are houses selling in 2025?

As of January 2025, homes listed for sale within the Phoenix metro area spent a median of 67 days on the market before going under contract. This indicates a somewhat sluggish real estate market, compared to a lot of other major metro areas.

Home buyers making a move in 2025 should not feel as rushed as those who purchased over the past couple of years. But even so, buyers should remember that sellers tend to have more negotiating leverage right now, due to relatively low inventory.

What’s the inventory situation like these days?

Housing market inventory in the Phoenix area has improved since the record low levels recorded during the pandemic. But there is still a relative shortage, which means there aren’t enough homes listed for sale to satisfy the demand from local buyers.

When this report was last updated, the Phoenix real estate market had about a 3.6-month supply of homes for sale, which was higher than the national average.

What will the Phoenix housing market be like in 2025?

Probably a lot like 2024, but with steeper price growth. Phoenix market forecasts issued by Zillow suggest that prices will resume a gradual rise over the coming months (in contrast to the plateau we saw during the past 12 months).

But a lot depends on future mortgage rate trends. If rates decline through the rest of 2025, homeowners will become less reluctant to sell their current homes and buy another.

This in turn could increase housing market inventory levels, alter the supply-and-demand dynamic, and possibly create more buyer-friendly market conditions.

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What to Know About Phoenix When Relocating

Here are some things you should know if you’re planning to move to and/or buy a home in the Phoenix area during 2025:

With a population of more than 1.6 million people, Phoenix is currently the fifth most populous city in the United States. The broader metro area (also known as the Valley of the Sun, or just “The Valley” to locals), ranks as the tenth most populous U.S. metro with more than 5 million people.

Major Cities

The metro area encompasses several major cities and many smaller towns. The largest cities by population include the following:

• Phoenix: The capital of Arizona and the anchor of the metro area, Phoenix is by far the largest city with a population of approximately 1.6 million.
• Mesa: The largest suburb in the metro area, with a population of over 500,000. (View our Mesa housing report)
• Chandler: A major technology hub in the region, with a population of close to 300,000.
• Gilbert: A rapidly growing suburb known for its family-friendly atmosphere, Gilbert also has a population of nearly 300,000.
• Glendale: Home of State Farm Stadium (where the Super Bowl is held periodically), Glendale has a population of over 250,000.

For home buyers, the Phoenix-area housing market offers a broad mix of property types, ranging from downtown luxury condos to single-family suburban homes to desert ranches. So there’s something for almost every type of home buyer.

Climate

Phoenix is renowned for its sunny weather, logging more than 300 days of sunshine annually. Summers are hot and dry, with temperatures often exceeding 100°F and getting warmer all the time.

Winters, on the other hand, are typically mild and pleasant with temperatures ranging from the 40s to 70s. Because of this, a lot of retirees from colder climates relocate to the Phoenix area to escape the cold, which in turn increases competition within the housing market.

The desert climate of Phoenix might make it ideal for individuals seeking warm weather and outdoor activities throughout the year. But the summer peak temperatures can be brutal at times, even for longtime residents. Home buyers be warned.

Economy and Job Market

Phoenix has a diverse economy that isn’t reliant on a single industry. Major sectors driving growth include technology, healthcare, manufacturing, tourism, and construction. This diversity creates a more resilient job market and contributes to economic stability.

Major employers in the Phoenix area include Banner Health, Wells Fargo, Intel, American Express, and Arizona State University.

Many large corporations have chosen to relocate or expand in the Phoenix-Mesa area. Intel, Taiwan Semiconductor Manufacturing Company (TSMC), GoDaddy, and many others have local operations that contribute to the economy.

As of January 2024, the Phoenix-Mesa metro area had an unemployment rate of 3.4%, which was slightly better than the national average of 3.7%.

Disclaimer: This report includes Phoenix, Arizona housing market predictions for 2024 to 2025. Those predictions were offered by third parties not affiliated with the Home Buying Institute. HBI makes no claims or assertions about future real estate conditions in Phoenix or elsewhere.