Phoenix Market Update: Active Supply Declines, Luxury Bounces, and Affordability Is Finally Improving.

As we move deeper into summer, the Phoenix housing market continues to shift in ways that are worth paying attention to — whether you’re actively planning a move or simply keeping an eye on the bigger picture. Market conditions today are creating new opportunities for both buyers and sellers, and understanding where things stand can help you make more informed decisions in the months ahead.

This update takes a closer look at what’s driving affordability, what’s happening with active supply, and why luxury activity has surprised many this season. If you’ve been waiting for the right time to act, or are wondering what’s next for the Phoenix real estate market, here’s what you need to know right now.

For Buyers: Affordability is (finally) headed in the right direction.

Housing affordability depends on three key factors: mortgage rates, home values, and income. In the past, when home prices rose faster than incomes, mortgage rates often dropped and helped balance things out. But this time around, mortgage rates have been unreliable and volatile — leaving many buyers waiting on the sidelines for relief.

Now, after nearly three years of waiting, we’re starting to see progress from a different angle. Recent data from the Federal Reserve of Atlanta shows that wage growth nationally is outpacing inflation. Here in Phoenix, it’s an even better story: wages rose 9.3% from 2024 to 2025, while our local inflation rate sits at just 0.3%. This means more purchasing power for buyers.

At the same time, Phoenix has remained in a buyer’s market for eight consecutive months. Home price appreciation is flat compared to last year — well below the 2.4% national inflation rate — and homes priced under $500,000 (which made up 58% of all sales last month) are now down 2.2% year-over-year.

This combination — stronger wages, very low local inflation, and easing prices — is making housing more attainable even without a dramatic drop in mortgage rates. And if rates do moderate over the summer, we could see demand pick up quickly.

For Sellers: A market adjusting and creating new openings.

Sales in May were down compared to last year, but that was largely the result of short-term volatility in April. The surprise tariff announcements that month rattled financial markets and mortgage rates, which temporarily slowed contract activity. But consumer confidence improved in May, and with that came an increase in mortgage applications — up 18% over last year and at their highest level in two years.

Luxury sellers saw unexpected good news in May. Despite the season, high-end contract activity rose as crypto, stocks, and corporate profits rebounded. Weekly accepted contracts over $1 million jumped 30% over four weeks — a rare trend for this time of year in Phoenix.

On the supply side, active listings have been slowly declining after peaking earlier in the year. New listings added to the MLS are down 39% over the past two months, and cancellations and expirations are up significantly as some sellers choose to rent or simply take a break from the market. Particularly in the luxury segment, many owners traditionally pause listings during the summer heat and resist in the fall.

But with fewer listings on the market right now, sellers who choose to stay active — especially at the higher price points — may face less competition than usual.

What this means for YOU.

Phoenix continues to present a mix of challenges and opportunities. For buyers, affordability is improving in meaningful ways, thanks to rising wages, low inflation, and some softening in home prices — even as mortgage rates remain stubbornly high. If rates ease, conditions could become even more favorable.

For sellers, market conditions are prompting many to reconsider timing. With fewer active listings and improving buyer sentiment, this summer may offer a window to stand out — particularly for those in the luxury market, where serious buyers remain active despite the heat.

Every situation is unique, and it’s more important than ever to have a thoughtful strategy. If you’re thinking about buying, selling, or simply want to better understand your options in today’s Phoenix market, let’s have a conversation. I’m always here to provide insight and help you make the best move for your goals.