Phoenix Housing Market June 2025: Home Prices Slip as Buyers Gain Power

Prices Drop, Builders Offer Big Incentives, and Buyers Take Control

The Greater Phoenix real estate market continued its steady correction in June 2025. While this isn’t a crash, there’s no denying the shift: home prices are trending down, buyer leverage is rising, and sellers are adjusting—some by stepping away from the market altogether.

With mortgage rates holding near 7% and demand sliding, builders are stepping in with aggressive incentives to keep transactions moving. Inventory is no longer rising weekly, but the pace of sales has slowed, particularly in the entry-level and condo segments.

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In this episode of The House of Ravenscroft, I break down the latest numbers, what buyers are negotiating for, and why builders are doing more than ever to close deals.

Whether you're considering buying or selling a home in Phoenix, here’s what you need to know about market trends, pricing shifts, and opportunities that may not last.

Phoenix Real Estate Prices Are Sliding – But This Isn’t 2008

The median sales price for Phoenix real estate dropped to $449,500 in June, down slightly from $451,000 the month prior. That 0.3% decline may seem small, but it reflects a broader downtrend:

• Active listing prices per square foot dropped 2.4%

• Homes under contract declined 0.2%

• Closed sales prices fell 1.7%

This slow deflation mirrors the conditions we’ve seen developing over the past several months. Sellers are still defending their home values, but buyers now have the upper hand. In fact, the Market Index has dropped to 71, indicating a market that clearly favors buyers—but still far from the distressed levels seen during the last housing crash.

Phoenix Mortgage Rates Are High, But Builders Are Helping

The average 30-year fixed mortgage rate in Phoenix now sits at 6.89%. While this is far from the ultra-low rates of 2021, it’s historically within a normal range. Buyers today aren’t likely to see 3% interest rates again anytime soon.

To offset rate pressure, home builders across Phoenix are offering competitive financing incentives—often buying down interest rates to the mid-3% range. Many are combining those offers with closing cost assistance, appliance packages, backyard landscaping, and more.

If you’re shopping for new construction homes in Phoenix, now may be one of the best times to negotiate.

Explore New Build Communities in Phoenix →

Phoenix Housing Market by Area – June 2025 Breakdown

Not all cities in the Phoenix metro are moving in lockstep. One city stands apart: Paradise Valley, where the market index surged 15% due to a sharp drop in available inventory. But that’s more a result of seasonal cancellations than a demand spike.

The rest of the Valley is trending the opposite direction:

• Buckeye saw the steepest drop at -8%

• Fountain Hills and Phoenix each fell -6%

• Cave Creek shifted from balanced to buyer’s market

• Avondale moved from seller’s market to balanced

As of June:

• 2 cities are in seller’s market territory

• 7 cities are balanced

• 9 cities are buyer’s markets

In secondary cities like Arizona City, Casa Grande, Sun City, and Gold Canyon, the market leans even further in favor of buyers.

Inventory Is Holding—but Demand Keeps Sliding

Inventory growth has stabilized, but buyer demand continues to decline. New listings are no longer increasing weekly, but they’re also not falling at a pace fast enough to rebalance the market. Combined with summer’s seasonal slowdown, this imbalance is expected to create additional price softening into Q3 2025.

Unless mortgage rates drop significantly—something unlikely in the short term—the trend will likely continue.

Condos, Townhomes, and Manufactured Homes Face Headwinds

Condos and townhomes in Phoenix are struggling the most. The listing success rate dropped to 58% in May, the lowest since 2011. Sellers in this segment are seeing longer days on market and deeper concessions.

Much of the pressure stems from rising recurring costs—HOA dues, insurance, and special assessments that have risen faster than inflation. Buyers are increasingly avoiding these properties in favor of more affordable single-family homes.

Manufactured homes are faring even worse, with June-to-date success rates below 50%.

Is Renting Now Cheaper Than Buying in Phoenix?

Yes, and that’s one reason why demand for home purchases has weakened.

The average rental rate in Greater Phoenix remains $1.37 per square foot, unchanged since August 2021. But with inflation up 17.8% over that time, renting has become roughly 15% cheaper in real terms.

That makes renting more attractive—at least short term—for buyers priced out by high interest rates.

Foreclosures Are Rising—But No Cause for Panic

Phoenix is seeing a modest uptick in foreclosure activity:

• 389 Notices of Trustee Sale were issued in May (up from 315 in May 2024)

• 73 properties went to foreclosure auction, the highest since early 2020

This doesn’t mean we’re heading for a foreclosure crisis. These numbers are still a fraction of the 4,000+ monthly foreclosures seen during the 2008 crash. But it does reflect growing friction as more sellers struggle to exit before a default.

Remodels Are the New Concessions

Today’s buyers aren’t just negotiating on price—they’re asking for full remodels.

It’s now common to see buyers request:

• Full interior repainting

• Window replacements

• A/C upgrades (even when working)

• Roof replacements

• Closet redesigns

Sellers are often agreeing—especially if the cost can be rolled into the sale price or offset by a price reduction or concession. This trend is reshaping how deals are structured and contributing to sales prices that appear higher than the underlying market value.

Should You Buy a Home in Phoenix Right Now?

This is one of the most favorable buyer markets Phoenix has seen in over a decade.

Wages are rising, prices are easing, and builders are offering the strongest incentives in years. Phoenix wage growth hit 9.3% year-over-year, while local inflation sits at just 0.3%—a rare dynamic that improves affordability without waiting for rates to drop.

Homes under $500,000—making up nearly 60% of sales—have already seen prices decline 2.2% year-over-year.

What Sellers Need to Know

Sellers who are realistic, strategic, and open to guidance are still closing deals. But those clinging to early 2022 pricing are facing long days on market and price reductions.

Here’s what we’re seeing:

• New listings are down 39% over the last 2 months

• Weekly listing cancellations are up 38%

• Expired listings surged 84% at the end of May

Some sellers are opting to rent their properties or wait until fall. Others are testing the summer market to gain insight before repositioning. In the luxury space, summer cancellations are common—but they often lead to stronger fall launches due to limited supply.

Are Foreign Buyers Returning to Phoenix?

A few are—thanks to currency shifts.

• Buyers using British Pounds are seeing a 10% discount compared to January

• Swiss Franc buyers have an 11% advantage

• Canadian buyers, Arizona’s largest international group, are seeing about 4% in currency savings

Still, foreign demand remains limited. Any meaningful rebound in activity is expected to come from domestic buyers.

📌 Phoenix Real Estate FAQ – June 2025

Is Phoenix a buyer’s or seller’s market in June 2025?
Phoenix is a buyer’s market, with prices declining and sellers offering more concessions and incentives to close deals.

Are Phoenix home prices going down?
Yes. Prices declined across active, under-contract, and closed listings in June 2025.

What mortgage rate can I expect in Phoenix right now?
The average rate is around 6.89%, but builders are offering buydowns into the 3.99%–4.99% range for qualified buyers.

Is now a good time to buy a home in Phoenix?
If you’re financially prepared, yes. Rising wages, falling prices, and strong incentives are creating excellent buying opportunities.

Final Thoughts: Phoenix Market Reset in Progress

The Phoenix housing market in June 2025 is not in crisis—it’s in correction. Prices are easing. Buyers are gaining control. Sellers are learning to adjust. And builders are keeping the market moving with aggressive offers.

This is a market driven by financial fundamentals, not fear. And the opportunities—whether you’re buying or selling—go to those who are prepared, strategic, and flexible.

Need a breakdown of your neighborhood? Curious what your home could sell for this summer—or what builders are offering nearby? Let’s connect.