Phoenix Home Prices Will Rise in 2025, But Probably Not by Much

Realtor.com and Zillow have very different projections for Phoenix-area home values in 2025. But they both agree on one thing. Prices in this metro area are expected to rise during 2025.

Based on this outlook, home buyers who are planning to make a purchase in the Phoenix area might want to consider doing it sooner rather than later, to avoid higher costs.

In this guide: An assessment of current home price trends in the Phoenix-Mesa-Scottsdale metro area with a pair of predictions for 2025.

A Snapshot of Home Prices at the End of 2024

Here’s a summary of median home prices at the end of 2024, for the largest cities in the Phoenix metropolitan area (in descending order by population). These median values were reported by Zillow in December of 2024.

City	Home Price Dec. 2024	2024 Change
Phoenix	$414,977	+0.5%
Mesa	$438,978	+0.9%
Chandler	$529,748	+1.2%
Gilbert	$576,388	+1.8%
Glendale	$411,100	+0.9%
Scottsdale	$827,351	+1.2%
Peoria	$490,846	+0.3%
Tempe	$480,318	+0.8%

Here are some key insights and trends to take away from this table:

• Going into 2025, most cities in the region had a median home value somewhere between $410,000 and $580,000.
• The city of Scottsdale is the obvious exception, with a median home value nearly double most other cities in the Phoenix metro area.
• Scottsdale is more expensive due to its status as a luxury market, with larger high-end properties that drive up the median value.
• All of these markets experienced small price gains during 2024, ranging from 0.3% to 1.8%, based on the data provided.
• The modest gains of the past year provide some insight for 2025. The most likely scenario is that prices will continue rising at a gradual pace.

Graph: Key Trends Over the Past Few Years

The graph below shows the median home value for the Phoenix-Mesa metropolitan area going back several years. It’s based on data provided by Zillow at the end of 2024.

This annotated graph helps us visualize the home price trends of the last few years and what they might look like going forward.

We expect the flat line to continue into the first quarter of 2025, after which prices will begin to inch upward again. That seems to be the most likely scenario based on current supply and demand conditions across the Phoenix area (more on that in a moment).

Realtor.com: Phoenix Home Prices Will Rise During 2025

Let’s get back to what everyone really wants to know.

Multiple sources predicted that house values in the Valley of the Sun will rise during 2025. But they differ significantly when it comes to the size of those gains.

Let’s start with Realtor.com.

In a report published in December, Realtor.com made the following forecasts for the Phoenix-Mesa metropolitan area in 2025:

• Home price growth: 13.2% (year over year)
• Home sales growth: 12.2% (year over year)

But this projection seems a bit bullish, based on the trends we’ve seen over the past two years.

The median value for this metro area only rose by around 1% over the past year, according to Zillow. So it’s hard to imagine home prices rocketing up by 13% during 2025.

Historically speaking, double-digit annual price gains only occur during anomalies, like the pandemic-driven home buying surge of 2020 to 2022. (See chart above.)

We too expect Phoenix-area home prices to climb throughout 2025, but at a more moderate pace than the above projection.

Related: Phoenix housing predictions for 2025

Modest Gains Are the More Likely Scenario

Zillow offered a more modest price forecast for the Phoenix-Mesa-Scottsdale metro area. They predicted that the median home value would increase by 1.7% during the 12-month period ending in November 2025.

This seems like a more realistic projection, compared to the double-digit price forecast offered by Realtor.com’s analysts.

Ultimately, we have to take these figures for what they are: an informed guess. But the general consensus is that home values in the Phoenix area will probably keep climbing in 2025. That’s the big takeaway here.

Phoenix Named a ‘Top Housing Market’ for 2025

We talked about Realtor.com’s bold outlook for the Phoenix house prices, suggesting that double-digit gains might be possible next year.

A few days after issuing that forecast, the company published another report that identified the “Top Housing Markets for 2025.” And Phoenix made an appearance here as well.

Specifically, Realtor.com predicted that the Phoenix-Mesa-Chandler metro area would be one of the hottest real estate markets of 2025, in terms of price and sales growth.

To create their top-10 list, the company’s analysts used the combined forecasted growth for both home prices and sales, for the nation’s 100 largest metro areas.

In rank order, the (forecasted) top housing markets of 2025 are:

1. Colorado Springs, Colo.
2. Miami-Fort Lauderdale-Pompano Beach, Fla.
3. Virginia Beach-Norfolk-Newport News, Va.-N.C.
4. El Paso, Texas
5. Richmond, Va.
6. Orlando-Kissimmee-Sanford, Fla.
7. McAllen-Edinburg-Mission, Texas
8. Phoenix-Mesa-Chandler, Ariz.
9. Atlanta-Sandy Springs-Alpharetta, Ga.
10. Greensboro-High Point, N.C.

According to their accompanying press release:

“This year’s list highlights markets characterized by moderately affordable homes, abundant inventory – mainly boosted by new construction – and a sizable base of younger families, many with military and international connections.”

Three Factors That Could Limit Price Growth

As mentioned above, we side with the more modest home-price outlook for the Phoenix area and believe that double-digit gains (predicted by Realtor.com) are less realistic.

Here are three factors that could limit price growth in 2025:

1. There are more homes for sale, going into 2025.

Local housing market inventory has increased over the past few years.

In October 2024, Realtor.com reported that the total number of active real estate listings in the Phoenix-Mesa-Chandler metro area had increased by nearly 42%, year over year. That was significantly higher than the national growth rate of 29% during that same 12-month period.

As a result, sellers today are more likely to reduce their asking prices after being on the market for a while without success. Home buyers, meanwhile, don’t have to compete as fiercely with one another, which means fewer bidding wars to drive up the sale price.

Additionally, the city’s ambitious Housing Phoenix plan aims to “create or preserve 50,000 homes by 2030, and increase overall supply of market.” So the number of properties available to buyers could increase even further from 2025 to 2030.

All of these interconnected trends reduce the upward pressure on home values, leading to slower price growth. With all other things being equal, steady inventory growth typically leads to price stabilization or even declines within a real estate market.

2. Phoenix has become less affordable.

From a housing standpoint, the Phoenix area has become less affordable over the past five years or so. Skyrocketing home prices during the pandemic had a lot to do with this.

During the pandemic years from early 2020 to 2022, the median home value for this metro area rose from $293,000 to $489,000, an unprecedented growth rate.

Prices have declined a bit from the all-time high reached in summer 2022 and currently hover around $450,000. But that’s still significantly higher than pre-pandemic levels.

The bottom line is that the Phoenix real estate market is no longer the beacon of affordability it used to be. It currently has a median home value about $100,000 higher than the national median. So there are fewer people who can afford to buy a home in this market.

Weaker demand stemming from affordability issues could limit home-price growth in the Phoenix area, resulting in modest gains through 2025 and into 2026.

3. Many home buyers remain hesitant.

The United States is currently emerging from a period of high inflation. And while inflation has eased in recent months, economic uncertainties linger on, with many people struggling to make ends meet.

As a result, there’s a high degree of skepticism among would-be home buyers, both in the Phoenix area and elsewhere across the country.

According to a 2024 Gallup survey:

“Currently, 21% of Americans say it is a good time and 76% believe it is a bad time to buy a house. Those figures are essentially unchanged from last year—21% and 78%, respectively—the worst in Gallup’s trend.”

Consumer sentiment has improved a bit since that survey was conducted. But many people are still taking a wait-and-see approach regarding the housing market right now, fearful of additional price declines.

The bottom line to all of this is that there’s more supply and less demand within the Phoenix area real estate market, and that could limit home-price growth in 2025.

Disclaimer: This report contains predictions relating to home values and other real estate trends, curated from multiple sources. They are the equivalent of an educated guess and should be treated as such. The Home Buying Institute makes no claims or guarantees about future market trends or conditions.