The Greater Phoenix housing market has officially shifted. Prices are softening, inventory remains elevated, and buyers have taken back the advantage as we head into summer 2025.

While every week seems to bring new headlines predicting either a crash or a rebound, the reality on the ground looks very different. This isn’t a crisis. This isn’t 2008. This is a steady, controlled correction — and for many, it’s opening the door to opportunity.

Prices Are Cooling — But Not Crashing

For the second month in a row, Phoenix home prices are pulling back. The Market Index dropped another 3.5% in June after a 4.1% decline last month, firmly planting us in buyer market territory.

But unlike the headlines you may have seen, prices aren’t free-falling. What’s happening is far more measured.

• Luxury sales have held up better due to recent strength in the stock and crypto markets, keeping median price numbers somewhat elevated.

• Beneath that, most entry-level and mid-tier homes are seeing modest price declines or flat pricing.

• Well-prepared, move-in-ready homes are still attracting interest — but aggressive overpricing simply isn’t working anymore.

This is a market balancing itself after several years of unsustainable growth.

Buyer Leverage Continues to Grow

Across much of Greater Phoenix, the leverage has shifted fully into buyers’ hands.

• Inventory has stabilized but remains higher than current demand can absorb.

• Supply sits around 109 on the index while demand lags behind at 79.

• Negotiations have become more favorable for buyers — both on price and seller concessions.

Builders are doing much of the heavy lifting to keep sales active, offering aggressive incentives:
✅ Rate buydowns into the 4% range
✅ Closing cost credits
✅ Appliance packages
✅ Backyard landscaping and upgrades

As summer continues, many builders are expected to sweeten these offers further to compete for buyers' attention.

The Mortgage Rate Reality

Let’s address the conversation that seems to dominate every real estate decision right now: mortgage rates.

After briefly dipping below 7% earlier this year, 30-year fixed rates are now sitting around 7.08% — the highest we've seen in recent months.

Here’s what many buyers don’t fully grasp:

• The 3% mortgage rates of 2020-2021 were never normal. They were the direct result of unprecedented pandemic stimulus that allowed lenders to borrow at close to 0%.

• Prior to that period, the lowest 30-year mortgage rate in U.S. history was about 4% — back after WWII.

• The long-term average for mortgage rates is much higher — around 7.75%.

Simply put: we are not returning to 3% or 4% rates anytime soon. This is likely the new range buyers will need to work with for the foreseeable future.

This Is Not 2008

It’s easy to hear “price declines” and immediately think back to the housing crash of 2008. But this market looks nothing like that.

• There’s no wave of foreclosures.

• Lending standards remain strong.

• Homeowner equity remains historically high.

What we’re experiencing is a typical market correction after several years of extreme appreciation. Historically, Phoenix has seen price adjustments between 3% and 11% during buyer markets. That’s exactly where we are now — not 20% or 30% declines.

What to Watch for as We Head Into Summer

Heading into the second half of 2025, here are a few key trends to watch:

• Inventory levels may hold steady but will likely vary by price point.

• Buyer behavior continues to shift toward more negotiation and patience.

• Builders will likely remain aggressive with incentives.

• Mortgage rates will remain the biggest wildcard shaping affordability and momentum.

The good news? For both buyers and sellers, this remains a highly active market — as long as you approach it with a strategy built for today’s conditions, not yesterday’s pricing.

Bottom Line

We are no longer waiting for the market to shift — the shift has fully arrived. The Phoenix market is rebalancing, but not collapsing.

✅ For buyers: this is the best leverage you’ve had in years.
✅ For sellers: success is still possible — but requires smart pricing and strong preparation.

Every client’s situation is unique, and that’s exactly where strategy matters most.

👉 If you’re considering a move, buying, selling, or simply want to run the numbers based on your personal situation, feel free to schedule a time to chat. We’ll break down your options and create a plan that fits today’s market — not last year’s headlines.