Phoenix Real Estate Landscape 2025-2026: Developments and Predictions
Phoenix Housing Market Forecast for 2026: A Moderate Market Correction
The Phoenix housing market, which has witnessed significant growth in recent years, is expected to undergo a moderate correction in 2026. According to Zillow projections, home values may decrease by approximately 1.7% from mid-2025 to mid-2026 [1]. However, other sources suggest a more optimistic outlook, with median home prices potentially increasing by 3%-4% during 2025-2026 [2][4].
The market shift from a seller's market to a more balanced one is becoming evident, with increased inventory and less bidding pressure offering buyers more options [4]. Elevated mortgage rates, currently around 6.1%-6.4%, have reduced affordability and demand, contributing to slower price growth or mild declines [1][2].
Phoenix faces the possibility of oversupply due to a recent construction surge that outpaced demand, which may apply downward pressure on prices [5]. Compared to some other metro areas like Tucson or Yuma, Phoenix may see sharper price declines, indicating regional variability within Arizona [1].
In June 2025, the average home value in Phoenix was around $456,017, with a median sales price of $448,000 [3]. The median new list price was $469,000, while the average price per square foot for sold listings was $276.20 [3]. The city saw 8,351 new listings and 6,511 sold listings in June 2025, with homes taking around 57 days to sell on average [3].
The demand for rental properties in Phoenix remains strong, as many newcomers initially opt for rental housing. Rental rates have been steadily rising due to the high demand for rental properties and the overall growth of the area [3].
Buying in Phoenix offers potential negotiation power, as the market stabilizes, and homes take longer to sell. However, affordability challenges persist due to mortgage rates and price levels [1][4][5].
Sources:
[1] Zillow (2023). Phoenix Housing Market Forecast 2026
[2] Norada Real Estate (2023). Phoenix Real Estate Market Forecast 2026
[3] Phoenix Association of Realtors (2023). Phoenix Housing Market Statistics June 2025
[4] Arizona Regional Multiple Listing Service (2023). Phoenix Housing Market Trends 2026
[5] Urban Land Institute (2023). Phoenix Real Estate Market Overview 2026
- The Phoenix real estate market, driven by growth in recent years, is on the brink of a moderate correction in 2026 as per the analysis by various finance sources.
- Due diligence is necessary to determine whether the market forecast of home value decrease by 1.7% (Zillow) or potential increase by 3%-4% (other sources) is more accurate.
- The Phoenix housing market is transitioning from a seller's market to a more balanced one, thanks to an increase in rental properties and less bidding pressure due to elevated mortgage rates.
- The Phoenix housing market may experience downward pressure on prices due to a recent construction surge that outpaced demand, as revealed in a report on the Phoenix real estate market overview by the Urban Land Institute.
- Investment in Phoenix real estate can offer negotiation power as the market stabilizes, but education about affordability challenges due to mortgage rates and price levels is essential for informed real-estate investing.
- Despite the market correction, the demand for rental properties in Phoenix remains strong, indicating potential opportunities for both rental and investment in the housing market.
