2025 Phoenix Real Estate: What Buyers and Sellers Need to Know

2025 continues to be a bit of a head-scratcher. Many expected prices to soften this year, and while they have in select areas, the overall Metro Phoenix market has remained surprisingly stable—despite the continued pressure of higher interest rates.

A big reason is supply and demand. Phoenix is still growing by roughly 85,000 new residents each year, and many current homeowners are reluctant to give up their 3% mortgages. That hesitation has reduced the number of homes hitting the market and created a wave of “accidental landlords”—owners who decided to hold on to their properties rather than trade up and lose that low rate. Until supply dramatically outweighs demand, or rates drop significantly, we’re likely to stay in a holding pattern.

Recently, some of our clients decided to wait on making a move until after the Federal Reserve’s latest meeting. As we’ve discussed before, the Fed funds rate does not directly impact mortgage rates. In fact, the last time the Fed lowered rates, mortgage rates actually rose slightly. As of this writing—just one day after the Fed cut rates by 0.25%—mortgage rates are once again following the 10-year Treasury yield higher.

For sellers, there is still a bright spot. Rates are well below their peak, and just before the Fed meeting we saw them dip, sparking a noticeable increase in buyer activity and mortgage applications.

For buyers, the news is encouraging too. Rates have improved compared to last year, and there are still motivated sellers willing to negotiate. In our recent deals, sellers have reduced list prices or offered concessions to get transactions across the finish line—or to keep them from falling apart.

Overall, we’re seeing a balanced market where condition and pricing drive sales. Buyers are sometimes caught off guard by this. The narrative often suggests the market is weak, but a well-priced, upgraded home will still sell quickly—sometimes before a buyer who tries to “play hardball” can act. On the other hand, sellers with homes that need work or have inherent flaws may find today’s buyers are choosier than in the past few years. Pricing properly is critical.

Finally, it’s worth remembering: all real estate is local, and in most cases hyper-local. National headlines are helpful for context, but your best decisions will always come from understanding what’s happening in your specific neighborhood, at your specific price point, and in the context of your goals.