2025 Annual Metro Phoenix Real Estate Market Update & Summary

Year-End Housing Review for Metro Phoenix

Home sales over the last 3-years have been at their lowest levels since 2008. In 2025, inventory has continued to climb to higher levels, mortgage rates dropped only slightly, and the disparity between asking and sales prices was -$16,059. These are the major factors that kept Metro Phoenix in a buyer's market during 2025. Yet, and despite these factors, prices have rebounded and continued an upward trend.

Sales Volume and Price

Here are some notable facts about sales volume and price in this 2025 vs. 2024 Metro Phoenix Real Estate Market Update:

• Total sales rose to 69,356 in 2025, or an increase of 3.5% from 66,998 sales in 2024.

• Since the year 2000 there have been 18 other years with higher sales volume than 2025 (a result of higher interest rates).

• The $42.1 billion in total sales in 2025 ranks 3rd. Only 2021 and 2022 were higher at $52.4 and $46 billion respectively.

• The 2025  price per-square foot (PPSF) of $297.57 was $2.55 higher than 2024 (a +0.9% increase, which is a small increase for appreciation).  $297.57 is also the highest annual PPSF ever recorded in the Metro Phoenix Real Estate Market.

• Although prices fluctuated over a $37 PPSF range, 2025 also produced the highest monthly PPSF average in the history of the Phoenix Area at $316.66 (most likely caused by a large increase in the number of 5+ million dollar home sales that month).

  
  

Price per-square foot is a better indicator than median price because it takes into consideration the average size of sold homes, not just the price. My Metro Phoenix real estate market update focuses on PPSF.

Year-Over-Year Comparisons

Year	# Sales	$$ Sales	Avg. Price	Avg. Size	PPSF	Median Price
2025	69,356	$42.1 Billion	$607,034	2,040	$297.57	$451,222
2024	66,998	$39.6 Billion	$590,345	2,001	$295.02	$450,000
2023	67,920	$38.1 Billion	$560,881	1,980	$283.27	$430,500

(Source: Arizona Regional Multiple Listing Service)

Click here for more history on PPSF

Click here for more history on sales volume

Click here for more history on year-over-year sales volume

Note: It is important to recognize that property values are based on local neighborhoods, so please do not apply the overall PPSF average to your specific area/home. Call us at 602-300-0374 for a personal home valuation.

Housing Inventory

Mortgage rates have restricted the number of buyers in the market causing inventory to soar. Average monthly listings are at their highest levels since 2017 and days on market have increased.

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Average Inventory by Year

Year	Average Monthly Inventory	Range
2025	21,632	18,157 - 23,703
2024	16,119	13,034 - 19,360
2023	12,196	9,595 - 15,070

(Source: Arizona Regional Multiple Listing Service)

Click here for more history on housing inventory

Price Reductions

This is an interesting category you might not find any other place. It's a really good indicator of market conditions. In a seller's market, homes will sell for more than list/asking price. Conversely, homes will sell for less than list price in a buyer's market.

As a point of reference, homes sold for an average of +$6,223 more than list price in Jan-Apr of 2022 and peaked at $10,100 in April. Homes have sold for less than list price ever since.

Average Difference Between List and Selling Prices

Year	+/- Asking to Sales Price
2025	-$16,059
2024	-$12,726
2023	-$13,604
2022 after effects of higher rates	-$9,986
2022 before effects of higher rates	+$6,223
2021	+$2,274

(Source: Arizona Regional Multiple Listing Service)

FOMC Interest Rate Changes

There was dramatic change from a seller's market in 2022 to a buyer's market that's continued through 2025. It all began when the Federal Open Market Committee (FOMC), a division of the Federal Reserve that sets monetary policy, increased the federal funds lending rate to combat inflation.

As of this real estate market update, there have been 11 rate increases totaling 5.25% and 3 decreases totaling 1.75%. The net affect is a 3.5% increase over a 46-month time span ending in December 2025. These increases caused sales to slow, inventory to increase, and prices to drop. The rate as of January 1st, 2026 was 6.15%.

Average Mortgage Rates by Year

Year	Average Rate	Range
2025	6.63%	6.17% - 7.04%
2024	6.74%	6.12% - 7.22%
2023	6.81%	6.09% - 7.76%
2022	5.17%	3.11% - 6.95%
2021	2.96%	2.67% - 3.18%
2020	3.15%	2.71% - 3.72%

(Source: St. Louis Federal Reserve)

Although there is a correlation, mortgage rates aren't directly tied to the Fed rate. The economy and yields on 10-year Treasury Bonds affect mortgage rates. Further decreasing mortgage rates will stimulate the housing market. I personally feel anything a range of 5.0 - 5.5 % in 2026 would be a win for consumers.

Days on Market

Days on Market (DOM) is another way to gauge activity in the housing market. The average time-to-sale in 2025 was 77 days compared to 66 days in 2024, or a 16.7% increase. Note that DOM averaged 32-days in 2021, the year leading up to the rate increases.

Year	Days on Market
2025	77
2024	66
2023	64
2022	40
2021	32

(Source: Arizona Regional Multiple Listing Service)

As of this Metro Phoenix real estate market update, "active listings" (still waiting for an offer) have been on the market for an average of 100 days.

Click here for more history on DOM.

Distressed Sales

Distressed sales (bank owned properties, short sales, and auctions) totaled 416 sales, which is 146% of the 2024 total of 278. They are still at multi-year lows. The lowest year on record was 2006 with 130 total distressed sales.

(Source: Arizona Regional Multiple Listing Service)

It would take a substantial increase in distressed properties to have any effect on home prices. There is no better illustration than our own local market in 2009-2011 when foreclosure-type properties made up 60-70% of all homes for sale. 2011 was the bottom of the market when the annual, average price of homes was $82 per-square foot. Right now, 14 years later, we're at $297.57.

Wishing a happy and prosperous year to all in 2026! Call or text at 602-300-0374 for the best professional help selling or buying a home or for any questions about this real estate market update .

Ron Wilczek has been tracking and writing about the Greater Phoenix Real Estate Market since 2008. He's been a Realtor since 1999 and the broker of Metro Phoenix Homes since 2009.

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