Phoenix Housing Market Update: Key Trends to Watch in May 2025

By Arizona Home Group

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If you’ve been sitting on the sidelines watching the real estate market shift over the past year, here’s your sign: Phoenix is officially in a buyer’s market, and it’s one of the strongest we’ve seen in over a decade.

As of May 2025, there are over 27,000 homes for sale in Phoenix. That’s up 43% from last year, the highest number since 2014. Yeah, you read that right. The numbers are bonkers.

What does that mean for you? It means more home choices, less competition, and more negotiating room. Sellers are staying on the market longer, offering concessions, and adjusting prices down to attract attention. If you’re looking to buy, this is your moment.

Some areas are experiencing significant spikes in inventory. For instance, Chandler’s listings have surged by 82% year-over-year. This is due to high mortgage rates slowing down demand, particularly among first-time buyers and those in the lower price ranges.

Another trend we saw revolves around entry-level homes. You might think that buying should be easy with all these homes hitting the market. But here’s the catch: while over 50% of available homes are priced at $500,000 or below, many buyers still struggle to make that monthly payment work.

This is because mortgage rates are still hovering around 6% to 6.75%. And for someone putting together every penny for a down payment, that rate can make a big difference in affordability. We’re calling these buyers “payment-conscious.” They’re eager to buy, but only if the numbers add up, and sometimes, they just don’t.

This is truly an unusual time. A couple of years ago, finding anything under $400,000 was nearly impossible. Now, half of the 27,000+ listings are under $500,000, and that’s a lot of options for homebuyers.

Moreover, sellers are offering closing cost assistance, price reductions, and other incentives to attract offers. Terms that have been absent for years are now making a comeback. So, if you can make the numbers work, even with today’s rates, you have a unique advantage.

What should you do? If you’ve been waiting for the right time to start house hunting, this could be it, especially if you’re in that entry-level bracket, where inventory is high and sellers are motivated.

Here’s what I’d suggest:

• Talk to a lender early. Get pre-approved so you know exactly what you can afford.

• Work with an experienced agent. Find someone who knows how to negotiate on price and terms like closing costs and repairs.

• Be patient but decisive. With more homes available, it might take time to find the right one, but when you do, be ready to act quickly.

This market feels unreal compared to a few years ago, with more homes, lower prices, and sellers are offering more incentives than before. But don’t forget: rates are still high, and that’s keeping a lot of people on the fence.

If you’re stuck between wanting to buy and worrying about your monthly payment, contact us at (602) 571-3730 or AHGadmin@gmail.com. We can offer strategies and tools to help you through this situation.