Arizona Real Estate Market Trends and Predictions for 2025-2026
Arizona Housing Market Shows Signs of Balance in Mid-2025
The Arizona housing market is experiencing a shift in mid-2025, moving towards a more balanced equilibrium. After a period of rapid growth, home prices are stabilising, sales volumes are slowing, and inventory is gradually increasing.
According to the latest data, 8,787 homes were sold in Arizona in June 2025, marking a 4.3% increase compared to the same time last year. However, other reports indicate a 9.3% decline in homes sold year-over-year statewide. This mixed picture suggests a market that is cooling but still active.
The statewide median sale price is around $442,800 to $444,500 in mid-2025, reflecting a 3-5.3% year-over-year increase. Phoenix, in particular, has seen a median sale price of approximately $448,000.
Inventory levels are another key factor. Despite high mortgage rates discouraging sellers, the number of newly listed homes is slightly down by 2.0% year-over-year, with only 9,850 newly listed homes. However, this has resulted in a 24.7% increase in homes for sale compared to last year, with 48,344 homes for sale in Arizona in June 2025. This rising inventory is a positive sign for buyers, who are now having more choices and a little more negotiating power.
The average 30-year fixed mortgage rate in the U.S. as of 07/31/2025 is around 6.72%, and the 15-Yr FRM is about 5.85%, according to Primary Mortgage Market Survey® by Freddie Mac. These elevated rates are impacting affordability, resulting in serious but slower buyer activity and some sellers offering incentives to close deals.
Looking ahead, experts predict home prices to grow modestly by 2-5% annually. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), predicts a 3% increase in median home prices in 2025 and a 4% increase in 2026. Despite these increases, affordability challenges and mortgage rate volatility remain important considerations.
In terms of sales, Lawrence Yun also predicts a 10% increase in new home sales in 2025 and a 5% increase in 2026. Existing home sales are expected to increase slightly, with a forecast of 2-5% growth.
The market outlook for 2025-2026 suggests a market transitioning from extremely fast growth to a more balanced equilibrium, with rising prices but slower sales and slightly higher inventory in key metros. Buyers remain active but cautious, while sellers are selective due to high rates.
In summary, the Arizona housing market is showing signs of a transition towards a more balanced market. While home prices are stabilising, sales volumes are slowing, and inventory is gradually increasing. Buyers and sellers alike are adapting to the changing market conditions, with buyers having more choices and a little more negotiating power, but demand is still there.
- With the Arizona housing market transitioning towards a more balanced equilibrium, potential investors might find attractive opportunities for investing in real estate in various locations.
- The slowing sales volumes and increasing inventory could provide better opportunities for buyers who are interested in mortgage financing, considering the current status of the housing market.
- As home prices in Arizona continue to grow modestly by 2-5% annually, real-estate market participants would need to carefully assess variables related to finance, such as mortgage rates, to make informed investment decisions.
- Despite the gradual decline in home sales year-over-year, buyers should remain cautious and savvy as they navigate the new housing market with a more balanced equilibrium.
- Overall, Arizona's real-estate market anticipates a 3-5% increase in median home prices in 2025, making it an intriguing landscape for both potential buyers and investors in the finance and housing sectors.
