The Greater Phoenix housing market is shifting once again. September 2025 is bringing a mix of optimism and caution: lower mortgage rates, selective buyers, changing builder incentives, and economic signals that could shape demand in the months ahead.

If you’re buying, selling, or just watching Arizona real estate, here’s the full breakdown of what’s happening in Phoenix and what it means for you.

The Market Isn’t Moving in Just One Direction

One of the biggest misconceptions is that the market moves the same way everywhere. The reality? It’s shifting dramatically depending on the type of home and the specific neighborhood.

The clearest pattern in 2025 has been this: buyers want move-in ready, updated homes — and they’re willing to pay for them, if the price is right.

Every fully updated listing I’ve had in the past two weeks has gone under contract or is pending. Dated homes, even when priced attractively, are being skipped over. Buyers today are choosy, patient, and unwilling to take on big projects. “Good bones” just don’t cut it anymore.

The Hard Truth: Data Over Feelings

Here’s the reality I tell every client: I study this market daily, and my job isn’t to sugarcoat things. Too many sellers (and even agents) ignore the data and hope for outdated pricing to stick. The market doesn’t care.

I’ve lost business and even turned down opportunities because some didn’t want to hear the truth about their home’s value. But the facts are clear: if your home is dated and overpriced, it will sit. If it’s updated and priced in line with the market, it will sell.

If you’re a seller and don’t like today’s values, don’t sell unless you need to. But also ask yourself: would you rather be a buyer in a buyer’s market, or in a seller’s market fighting through bidding wars? Whatever you don’t make up on the sell side, you usually gain on the buy side — the net result is the same.

Supply and Demand: Leaner Inventory, More Confidence

• Active listings fell another 2.2% in August, a slower pace than July’s 6.2% decline.

• Cancellations jumped to 4,700 over the past two months, compared to just over 3,500 a year ago.

• Contracts in escrow rose 9% year-over-year in August, compared to only 1% growth in July.

• Daily sales volume adjusted for fewer working days is up 8% compared to last August.

This isn’t a surge in demand — it’s confidence returning, thanks to falling mortgage rates and improved affordability.

Phoenix Mortgage Rates – September 2025

Buyers finally caught a break this month. Mortgage rates earlier this week:

• FHA: 5.50%

• VA: 5.50%

• USDA: 5.50%

• Conventional: 6.125%

• Investment Property: 6.50%

Affordability has improved more than 5% year-over-year when factoring in both softer home prices and lower borrowing costs.

For context: the long-term U.S. average since 1971 is 7.3%. For nearly 20 years, rates rarely fell below 9%. By that measure, today’s numbers are historically favorable — even if they feel high compared to the 3% era.

Builder Incentives: Mixed and Competitive

The dip in mortgage rates has prompted builders to adjust strategies:

• Some are pulling back incentives, betting that lower rates will do the work.

• Others are still offering aggressive rate buydowns into the 3% range, plus closing cost credits and extras like backyard landscaping or appliance packages.

For buyers, this creates opportunities. With the right builder, you can combine lower market rates with incentives to secure financing well below resale options.

For sellers, the message is clear: you’re still competing with new construction that looks turnkey and offers financing perks resale homes can’t match.

Move-In Ready Homes Are Winning

Across Greater Phoenix, updated homes are the clear winners. They’re moving quickly, often with multiple showings and strong offers. Dated homes are dragging on the market, even when discounted.

If you’re a seller, presentation matters now more than ever. Fresh paint, flooring, updated kitchens, and modern fixtures can cut weeks off your days on market. Without them, even a “good deal” gets overlooked.

City-by-City Phoenix Housing Trends

Of the Valley’s 17 largest cities:

• 13 improved for sellers — including Fountain Hills, Scottsdale, Avondale, Gilbert, Cave Creek, Surprise, and Peoria.

• 4 improved for buyers — including Maricopa, Tempe, Glendale, and Paradise Valley.

Overall, Phoenix sits at 6 seller’s markets, 4 balanced markets, and 7 buyer’s markets. This underscores the hyper-local nature of today’s housing market.

Economic Crosscurrents: Layoffs and the Stock Market

Beyond housing data, the economy is sending mixed signals:

• U.S. companies announced 86,000 job cuts in August, the highest for that month since the pandemic. That’s a 39% increase from July.

• Job creation slowed to 22,000 in August, with unemployment ticking up to 4.3%.

• The Labor Department revised job data downward by 911,000 jobs — the largest adjustment in its history.

Arizona has fared better than states like California, but national layoffs can still ripple into the Phoenix market, especially in tech, finance, and professional services.

At the same time, the stock market is hitting record highs. That surge in wealth is fueling demand in the luxury housing market, where buyers with strong portfolios are confident and active.

But this balance is fragile. If layoffs increase and the market corrects, both the luxury segment and general housing demand could cool quickly.

Phoenix Home Prices and Concessions

• Average price per square foot fell 2.7% year-over-year in August.

• Median prices have been steadier, but still softening.

• Seller concessions hit a record high — 58% of sales in August included closing cost assistance or rate buydowns.

Sellers are still under pressure to negotiate. Buyers are calling the shots on terms — at least for now.

New Listings: Stabilizing Supply

Early September is showing improvement:

• About 2,200 new listings per week, up 6.4% from last year.

• Nearly 30% higher than September 2023.

It’s not the spring flood of 2,600–2,800 weekly listings, but it’s enough to stop supply from collapsing further.

National Housing Context

Phoenix isn’t alone. Most of the South and West — including Texas, Florida, Arizona, and California — are seeing year-over-year price declines.

The Midwest and Northeast remain more stable, with some areas posting gains. Locally, Paradise Valley remains a standout thanks to its luxury appeal.

Final Thoughts: A Market That Rewards Adaptation

This market is still rebalancing, but September feels like a turning point. Lower rates are fueling buyer optimism, builder incentives are creating real opportunities, and supply is no longer collapsing the way it was midsummer.

But the economy is flashing mixed signals. Layoffs are climbing, while the stock market is fueling luxury purchases. If either shifts, so will our housing market.

One thing, however, has been consistent: move-in ready homes at the right price are selling fast. Dated homes are struggling. Buyers want turnkey — convenience, style, and function.

The hard truth: my job isn’t to tell people what they want to hear. It’s to tell them what the market is really saying. If you don’t like today’s values, don’t sell unless you have to. But also remember: whatever you don’t gain on the sell side, you make up on the buy side. The net result is the same.

👉 Buyers: If the numbers work and you’re comfortable, now is the time to act.
👉 Sellers: Don’t expect miracles, but expect a market leaning back toward balance — especially if your home is updated and move-in ready.

📅 Want to talk through your specific situation or go deeper into this market update? Schedule a time to chat — I’d be glad to walk you through the numbers and help you make the best decision for your goals.