Is metro Phoenix's housing market poised for a crash?

Is Metro Phoenix's Housing Market Poised For A Crash?

By: Catherin Reagor

Speculation the housing market is heading for a crash is swirling around as interest rates stay higher and sales flatten.

But buyers looking for deals on houses will be disappointed to know metro Phoenix’s housing market isn’t heading for another bust.

Home sales and prices have been down a bit or flat for the past few months, but that’s typical for the holidays, say housing analysts.

The Valley’s strong population, job and income growth are driving its economy and making economists and market watchers optimistic about its housing market.

Metro Phoenix is known for its booms and busts, but that’s not what we are seeing now, said Ali Wolf, chief economist at home construction data company Zonda.

She said the “reasons we love Phoenix in 2025 and beyond” include low taxes, a diversifying and growing economy, weather, lifestyle, a high share of younger residents and population growth.

Still, 38% of people polled by LendingTree, an online marketplace for mortgages and other loans, think the U.S. housing market is at risk of crashing next year.

Why Phoenix metro isn’t heading for a bust

Metro Phoenix ranked No. 3 for population growth in 2023, adding more than 92,000 people. For 2024, it’s on track to add almost 80,000 new residents, according to the U.S. Census Bureau.

Due to corporate expansions, including Taiwanese Semiconductor’s move to the Phoenix area, 55,000 jobs were created during the 12 months that ended in October 2024. That is on the heels of 70,000 new jobs in 2023, according to the Arizona Office of Economic Opportunity.

The Valley’s median household income climbed to $88,900 in 2024, reports the Census Bureau. That’s up from $60,000 in 2017.

The Phoenix area ranks No. 2 for high-income job growth, according to the Bureau of Labor Statistics and Zonda.

Metro Phoenix’s median home price has shot up 89% in the past five years, creating $300 billion in equity for homeowners, according to the National Association of Realtors.

The Valley ranks third in the U.S. for the most new homes and apartments planned or under construction. Permits to construct 28,000 Valley houses and 17,000 apartments were issued during the 12 months ending in September, according to the Census Bureau and builders.

Where the Phoenix-area housing market is headed

The National Association of Realtors is calling for metro Phoenix to be one of the top 10 housing markets in the U.S. in 2025, based on economic and demographic data.

The Valley’s median home price climbed $8,000 from September to $448,000 in October, according to the Arizona Regional Multiple Listing Service.

Home sales were about flat at 5,708 in October.

“The market is in a period of shift and change now,” said Tina Tamboer. “We will get through it and stabilize.”

Foreclosures are low, with only 67 homeowners losing a Phoenix-area house in October, according to The Information Market.

“While interest rates aren’t expected to drop dramatically, we are hopeful for slight adjustments,” said Sindy Ready, a Scottsdale RE/MAX Excalibur agent and president of the Arizona Association of Realtors. “As they stabilize, this is encouraging buyers and sellers to re-engage with the market heading into 2025.”

Final Thoughts

For anyone considering a move to metro Phoenix, the housing market may not be the buyer’s paradise of a crash, but it’s also far from a bubble ready to pop. With strong economic fundamentals, steady population growth, and ongoing development, the Valley remains a vibrant and resilient market. Moving here means more than just buying a home—it’s an investment in a thriving community with unmatched lifestyle perks like sunny weather, diverse opportunities, and an economy that’s only getting stronger.

Whether you’re seeking a fresh start, career growth, or simply a change of scenery, metro Phoenix offers the perfect balance of affordability and opportunity. 2025 looks bright—don’t miss out!