News Summary
Recent research from the University of Arizona indicates a significant recalibration of the housing market in Arizona, highlighting a trend towards price moderation. Key findings reveal that Phoenix experienced a year-over-year decline in housing prices, along with a shift towards improved affordability and increased inventory. The Eller College of Management continues to play a crucial role in providing data-driven insights that support buyers and policymakers in navigating these changes, ensuring informed decision-making in a transitioning economic landscape.
Phoenix, AZ — The dynamic landscape of Arizona’s housing market is undergoing a notable recalibration, as recent research from the University of Arizona reveals a shift towards price moderation and a more balanced environment for buyers. These insights, stemming from rigorous academic inquiry, underscore the critical role of institutions like the University of Arizona’s Eller College of Management in providing data-driven understanding of the region’s economic pulse.
The latest findings illuminate a complex interplay of factors, from inflation and mortgage rate adjustments to evolving buyer behaviors and inventory levels. This period of adjustment, while presenting new challenges, also emphasizes the resilience of the Phoenix metropolitan area and the broader Arizona economy, fostering an environment where discipline in financial planning and informed decision-making are paramount for both individuals and the community at large.
Academic Insight into Market Dynamics
The University of Arizona’s Eller College of Management, through its Economic and Business Research Center (EBRC), serves as a vital resource, offering award-winning economic forecasts and applied research for Arizona’s citizens and business leaders since 1949. The EBRC’s fourth-quarter 2025 baseline scenario forecast, produced in November 2025, highlights that Arizona’s economy is currently progressing at a slower pace than usual, with gradual job growth and a modest increase in layoffs.
This comprehensive research indicates that while home price increases have moderated, the burden of housing costs remains elevated, and residential building permit activity has decreased throughout 2025. The stabilization of house prices, however, has contributed to a reduction in consumer price inflation within the Phoenix metropolitan area.
Phoenix and Statewide Price Adjustments
Recent data from September 2025 indicates that Phoenix housing prices experienced a 2.0% year-over-year decline, according to S&P Case-Shiller indices. This trend was not isolated to Phoenix, as 11 of the 20 cities tracked by these indices registered a drop in house prices over the year. On a statewide level, Arizona was among six states to report a decline in annual housing price changes for the third quarter of 2025, with a one-year change of -0.3%. This marks a reversal from previous years when states like Arizona were known for significant price gains.
Despite these recent adjustments, the average house in Arizona in Q1 2025 remained approximately $70,000, or 20%, more expensive than it would have been if pre-pandemic price trends had continued. In the Phoenix area, 86.9% of homes saw a decrease in value from November 2024 to October 2025, placing Phoenix as the fourth most affected major metro area in the country in this regard. Nationally, 53% of homes experienced a loss in value during the same period.
Affordability and Mortgage Rate Trends
Housing affordability in Arizona has seen modest improvement over the past year, aligning with national trends. As of September 2025, housing costs as a share of median household income in Phoenix decreased to 43.9% from 44.2% a year prior. Nevertheless, affordability remains significantly challenged when compared to pre-pandemic levels.
Current mortgage rates play a substantial role in the market’s accessibility. As of December 14-15, 2025, 30-year fixed mortgage rates in Arizona ranged around 6.125% to 6.27% APR. This compares to an average 30-year fixed mortgage rate of 6.35% nationally on December 14, 2025. Experts anticipate that rates will largely remain between 6% and 7% throughout 2025. A recent dip in mortgage rates in early December 2025 contributed to housing affordability reaching a three-year high.
Inventory Growth and Market Balance
The Phoenix housing market is demonstrating a movement towards equilibrium, often referred to as a “balanced market” in September 2025. Active listings in the Phoenix area increased by 12.6% year-over-year in November 2025, marking the 25th consecutive month of growth. The overall inventory across the metropolitan area climbed by 19.2%, resulting in a 4.4-month supply. This contrasts with the national trend, where active housing inventory at the end of November 2025 was still 6% below November 2019 levels.
The median time homes spent on the market in Phoenix also increased, reaching 84 days in November 2025, a 17% rise year-over-year. This extended period on market, combined with more than 30% of active listings having seen price reductions in the month leading up to September 2025, suggests a market where buyers are gaining more leverage.
Looking Ahead: Growth and Opportunity
Despite the recent price adjustments, the University of Arizona’s forecast suggests that Arizona’s economic growth is expected to accelerate in 2026. Phoenix is also attracting significant attention as a market to watch for 2026, with some analyses placing it among the top US markets for the coming year, while other national forecasts suggest the strongest growth in 2026 will be concentrated in different regions, specifically the Northeast and Midwest.
The city’s appeal remains strong, with approximately 173 Californians relocating to Phoenix daily. This continued demographic growth, coupled with an increase in new construction, provides a foundation for the market’s evolution. While the market for homes under $500,000 has seen a dip in transactions, the luxury segment of the Phoenix market is experiencing increased sales, indicating a bifurcated market with opportunities across different price points.
Summary of Key Phoenix Housing Market Data (Q3-Q4 2025)
| Metric | Value / Trend | Source Date |
|---|---|---|
| Phoenix Year-over-year Price Change | -2.0% (S&P Case-Shiller) | September 2025 |
| Arizona Statewide Year-over-year Price Change | -0.3% (FHFA House Price Index) | Q3 2025 |
| Median Listing Home Price (Phoenix) | $485,000 (trending down -3% YoY) | September 2025 |
| Median Sold Home Price (Phoenix) | $465,000 | September 2025 |
| Active Listings (Phoenix) | 24,394 (up 14% YoY) | November 2025 |
| Months of Supply (Phoenix Metro) | 4.4 months | October 2025 |
| Average Days on Market (Phoenix) | 84 days (up 17% YoY) | November 2025 |
| 30-Year Fixed Mortgage Rate (Arizona) | ~6.125% – 6.27% APR | December 14-15, 2025 |
| Homes Losing Value (Phoenix Area) | 86.9% | November 2024 to October 2025 |
Conclusion
The University of Arizona’s research provides valuable clarity amidst shifting market currents. The Phoenix housing market, while experiencing price adjustments and increased inventory, remains a robust area with underlying strengths in population growth and economic development. This period highlights the importance of informed academic research in guiding community members and policymakers through complex economic shifts, encouraging a disciplined and responsible approach to real estate decisions. As Phoenix moves towards a potentially accelerating economic growth in 2026, understanding these trends is key to fostering continued leadership and community impact within Arizona’s higher education and economic ecosystems.
For more detailed information on Arizona’s economic outlook and housing market trends, explore the research initiatives conducted by the University of Arizona’s Eller College of Management. Stay updated on Phoenix AZ college news and Arizona AZ higher education developments by regularly visiting HEREhouston.com, your source for local university and college news.
Frequently Asked Questions (FAQ)
What does University of Arizona research indicate about the Arizona housing market?
University of Arizona research indicates a reversal in the Arizona housing market, with price drops observed.
How much did Phoenix housing prices drop year-over-year in September 2025?
Phoenix housing prices dropped by 2.0% over the year in September 2025 based on the S&P Case-Shiller indices.
What was the statewide change in Arizona housing prices for Q3 2025?
Arizona reported a one-year change in prices of -0.3% for the third quarter of 2025.
Has housing affordability improved in Phoenix?
Housing affordability improved modestly in the past year, with housing costs as a share of median household income falling to 43.9% in Phoenix in September 2025.
What are the current 30-year fixed mortgage rates in Arizona?
As of December 14-15, 2025, current 30-year fixed mortgage rates in Arizona are around 6.125% to 6.27% APR.
What is the current inventory level in the Phoenix housing market?
Active listings in the Phoenix area climbed 12.6% year-over-year in November 2025. The metropolitan area has a 4.4-month supply of inventory.
Is Phoenix considered a top housing market for 2026?
Phoenix is receiving significant attention as a market to watch in 2026, with some analyses placing it among the top US markets for the coming year.
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Author: STAFF HERE PHOENIX WRITER
The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.
