Phoenix Home Price Forecast for 2025 to 2026: Modest Growth Ahead
Home prices are expected to rise gradually in the months ahead, but there are some headwinds.
In this report: An analysis of the latest home price forecast for the Phoenix metro area, which predicts slow-rising prices through 2025 and into 2026.
Here are the key points covered in this report:
Home prices in the Phoenix metro area have been through a roller coaster in recent years.
Prices shot up during the pandemic, hit an all-time high in the summer of 2022, and then declined to a metro-wide average of around $450,000.
Over the past year, home prices have been mostly flat in the Phoenix area.
Now, many home buyers, homeowners, and real estate professionals are looking forward, wondering what prices will do over the coming months.
According to one recent forecast, Phoenix-area home prices are expected to rise gradually through the rest of 2025 and into 2026.
Current Median Home Values: March 2025
The graphic below shows the current median home price for the five most populous cities in the Phoenix-Mesa metro area. It's based on data provided by Zillow in March 2025.
Most cities in the metro area have a median (or midpoint) home value somewhere between $405,000 and $530,000.
The city of Scottsdale is the obvious exception. Scottsdale has higher home prices than the rest of the metro area for the reasons stated in this article.
Market Trends Over the Past Eight Years
The graph below shows the median home value for the Phoenix-Mesa-Scottsdale metro area over the past eight years. It's based on data provided by Zillow in early 2025.
Several key trends will jump out at you, all of which are labeled:
Price growth accelerated during the pandemic, when many people moved to the Phoenix area due to the freedoms of remote work.
The median home value for the Phoenix area rose to an all-time record high of around $486,000 in the summer of 2022.
After hitting that peak, prices declined for nine months due to rising mortgage rates and other demand-reducing factors.
Following that post-pandemic downturn, home values in the Phoenix area leveled off, and that's where we are in early 2025.
Now, let's shift our attention to the future, by examining the latest home price forecast for the Phoenix area stretching into early 2026.
Phoenix Home Price Forecast Into 2026
In March, researchers from Zillow provided their latest forecast for home prices in the Phoenix metro area. The short version is that prices are expected to rise by a modest amount.
Specifically, the group predicted that the median home value for the Phoenix-Mesa-Scottsdale metropolitan area would rise by +1.4% from January 2025 to January 2026.
[Prompt: Using bullet points and short, simple sentences, list some of the factors that are currently putting upward pressure on home prices in the Phoenix metro area, and a separate list of factors that might be putting downward pressure on home prices.]
Over the past year, the median price for the metro area remained flat, with virtually no movement up or down.
So this latest forecast indicates a somewhat uneventful turning point during which Phoenix-area home prices go from "flat" to "slowly rising."
Upward and Downward Pressures
Like all real estate markets, the Phoenix area has certain factors that are putting upward pressure on home prices, and other factors that are applying downward pressure.
Which way home prices actually move, going forward, will largely depend on the interplay between these opposing forces.
Factors putting upward pressure on Phoenix home prices:
Limited home supply keeps competition high.
Population growth and migration boost demand.
Strong job markets attract new buyers.
Rising construction costs push prices upward.
Out-of-state buyers add extra demand.
Factors that make home prices more inclined to fall:
Higher mortgage rates can reduce buyer affordability.
Economic uncertainties may slow market activity.
New home construction eases the inventory shortage.
Affordability issues might limit buyer participation.
A potential slowdown in job growth can weaken demand.
Consumer Pessimism Could Weaken Prices
This second list above includes economic uncertainties, which is a growing concern in early 2025.
There's a lot of upheaval in the economy right now—trade wars, rising prices, mass layoffs and deportations—and it appears to be taking a toll.
According to a February survey from the University of Michigan:
"Consumer sentiment extended its early month decline, sliding nearly 10% from January. The decrease was unanimous across groups by age, income, and wealth."
Similarly, a January 2025 report from Freddie Mac stated:
"The percentage of respondents who say it is a good time to buy a home decreased from 23% to 22%, while the percentage who say it is a bad time to buy increased from 77% to 78%."
Another Big Variable: Inventory Growth
In addition to economic uncertainties, inventory growth is another variable that could affect Phoenix-area home prices through the rest of this year and into 2026.
The Valley has experienced a significant increase in the number of homes for sale over the last year. This additional competition could make sellers more willing to reduce their list prices.
According to a February report from Realtor.com, the number of active real estate listings across the Phoenix-Mesa-Chandler metro area rose by a whopping 45.3% over the past year.
Among the nation's largest metro areas, Phoenix had one of the biggest year-over-year increases in active real estate inventory (i.e., homes for sale).
Increased housing market inventory creates a supply surplus, shifting the balance of power from sellers to buyers. With more available homes, buyers have greater choice and negotiating leverage, leading to increased competition among sellers.
To attract buyers, sellers often lower their asking prices. This competition drives down overall market prices as comparable homes are also forced to adjust to the new, lower price points.
Conclusion, Summary, and Disclaimer
Overall, the Phoenix housing market appears to be entering a phase of modest and gradual price growth.
While limited supply and strong population growth continue to support rising home values, higher mortgage rates and an increase in available inventory could keep appreciation in check.
The latest forecast suggests that home prices will edge upward through 2025 and into 2026, but at a much slower pace than the rapid gains seen during the pandemic.
For buyers, this could mean more negotiating power and a less frenzied market. For sellers, it underscores the importance of pricing competitively in a landscape where affordability remains a key concern.
Disclaimer: This report contains forward-looking views for home prices in the Phoenix area. Such forecasts are the equivalent of an educated guess and should be viewed as such.