Phoenix among hottest US new-build home markets despite resale market warning signs

By Leah Mesquita

Despite increasing warning signs that the Arizona housing resale market is facing a reckoning, Phoenix is still showing strength when it comes to new builds.

The Valley ranks No. 3 among the 50 hottest home markets for 2025, according to Zonda’s Builder Magazine. 

The latest rankings comes as more buyers are choosing newly built homes, specifically within the Sun Belt region, as opposed to resale properties. The study from Zonda, a national housing market data firm, relies on building permit activity across the past 12 months.

While Texas cities took up four of the top 10 spots on the list, cities such as Las Vegas, Tampa and Atlanta ranked below Phoenix. The study tracks with Census data released in May, which shows Maricopa County led the nation with 38,310 new units built in 2024, according to the Arizona Republic.

“[Arizona] has always been very favorable for lifestyle and taxation opportunities, so that's why people are continuously moving here,” said Rod Cullum, founder of luxury custom home builder Cullum Homes. 

“We used to be ‘the retirement state,’ [but] we still have a lot of people that move here to enjoy the later phase of their life. People are moving to Arizona for lifestyle opportunities.” 

According to Builder Magazine, Texas-based D.R. Horton leads the way in the Phoenix metro so far in 2025 with 2,680 new home closings, followed by Miami's Lennar Corp. at 2,627 and Scottsdale's Taylor Morrison Homes Corp. with 2,099.

Tucson also cracked the top 50 hottest home markets in the Builder Magazine rankings, coming in at No. 37, squeezed between Port. St. Lucie, Florida at No. 36 and the New York City-New Jersey metro at No. 37.

Valley still undersupplied with new homes

Charley Freericks, president of the Phoenix region for Texas-based Howard Hughes Holdings Inc. (NYSE: HHH) told the Business Journal recently that despite several issues faced by builders, from interest rates to lingering supply chain issues and a skilled labor shortage amid threats of deportations, there is still a huge demand for new homes.

“Phoenix remains undersupplied in virtually all residential product types, particularly when you look at specific submarket,” Freericks said.

Adding to the supply will be Howard Hughes’ 37,000-acre Teravalis master-planned community in Buckeye. A grand opening is scheduled for the first village in the community this fall, with model homes opening in the summer, Freericks said.

Scottsdale-based El Dorado Holdings Inc. also has several master-planned communities under development and in the pipeline, spanning thousands of acres in metro Phoenix that will add more inventory to the market.

Although the new home market is booming, average year-over-year national home price growth slowed to 2.7% in April 2025, according to recent data from the S&P CoreLogic Case-Shiller Index. This is the lowest annual average recorded since 2023. 

April was the third consecutive month in 2025 that average Phoenix home prices have dropped, starting at $336,030 in January and falling to $330,700 through April, per the Case-Shiller Index. 

According to Greg Hague, the chief executive office of 72Sold, these statistics are a cautionary tale for a much larger issue, suggesting that it is time for the Federal Reserve to act decisively to lower interest rates. 

"If the Fed persists with these high interest rates while we're dealing with tariff wars and Middle East conflicts, we could be headed for a housing disaster," Hague said in a statement to the Business Journal. "Nobody, and I mean nobody, wants to buy an asset worth hundreds of thousands of dollars that is likely to drop in value. Once buyers believe home prices will fall for any sustained period, they'll pull back even harder, creating a vicious downward cycle."

"The powers in Washington better wake up or they'll create another 2008-2009 crisis entirely of their own making," Hague added. "The warning signs are clearly flashing red. It's time to act before we slide into a housing catastrophe that reverberates through every aspect of the economy." 

Final Thoughts

Phoenix continues to defy the national housing market slowdown with a red-hot new-build home sector. While resale activity signals cooling, the surge in new construction — led by top builders and sprawling master-planned communities — proves that the Valley remains a magnet for lifestyle seekers, retirees, and remote professionals alike.

Out-of-state buyers should take note: Phoenix is no longer just a retirement destination — it’s a booming hub of innovation, infrastructure, and opportunity. If you're considering a move, now is the time to explore new-home communities that offer modern design, energy efficiency, and flexibility that resale homes can’t match.

As builders race to meet demand and interest rates continue to influence market behavior, today's choices can shape tomorrow’s equity. The next chapter of Arizona’s growth is being built right now — and your next home might already be under construction.