The Greater Phoenix housing market is finishing the year with impressive momentum. With the best Q4 contract activity in three years and first-time homebuyer payments down 13%–15%, both buyers and sellers are experiencing notable shifts in affordability, demand, and pricing. Here’s your SEO-optimized breakdown of what’s happening in the Phoenix real estate market right now.

BUYERS

Why First-Time Homebuyer Affordability Is Improving

Affordability has been a major concern nationwide, but the Phoenix housing market is seeing meaningful improvement. November brought renewed attention to mortgage structure after President Trump floated the possibility of a 50-year mortgage. While this would reduce monthly payments, it slows down equity growth significantly.

30-Year vs. 50-Year Mortgage Snapshot

• Loan amount: $400,000
• Rate: 6.25%
• 30-year PI: $2,463
• 50-year PI: $2,180
• Savings: $283/month (11.5%)

However, a 50-year mortgage pays down equity much slower. After 3 years:

• 30-year mortgage pays down ~$15,000
• 50-year mortgage pays down ~$3,800

For many buyers, this slow equity buildup could be a disadvantage—especially for future refinancing, HELOCs, or major repairs.

Greater Phoenix Prices Are Down

Despite mortgage debates, affordability is improving naturally in the Phoenix real estate market:

• Home prices under $400K are down 10–14% from the 2022 peak
• Prices are down 3–5% year-over-year
• Mortgage rates dropped from 7.25% to 6.25%, lowering payments 5–10%
• Combined, buyer payments are down 13–15% compared to last year
• 60–70% of sellers are offering temporary buydowns that reduce first-year payments by 20%

Strong Buyer Opportunities Under $300K

The entry-level market is seeing major movement:

• Inventory up 39%
• Prices down 5%
• October sales up 21%
• November contracts up 32%

Wages Outpacing Inflation

According to the BLS:

• Phoenix hourly earnings are up 12% in two years
• Local inflation increased only 3.3%

This means more buyers now qualify for homes without extreme mortgage terms.

SELLERS

 Q4 for Phoenix Contract Activity in 3 Years

After a slow start to 2025, buyers have come back strong—creating the best fourth quarter for contract activity since 2021.

• Contracts are up 15% year-over-year
• Strongest gains: under $300K and over $1M
• Despite government shutdown delays, October sales still rose 3.3%

Mortgage Rate Stabilization Ahead

The Federal Reserve’s October 29 meeting brought:

• A 0.25% rate cut
• An end to securities reduction starting December 1

This signals a shift toward stability, which historically supports buyer demand and seller confidence.

Luxury Market Strength in Q4

The luxury real estate market in Phoenix is seeing a notable boost tied to strong financial markets.

Recent trends:

• Contracts between $1M and $2M are up 25% in the last 5 weeks
• $2M+ contracts are up 25% in the last 9 weeks
• Year-over-year, $2M+ contracts are up 7%

Retirement communities like Sun City, Sun City West, and Sun Lakes are holding steady compared to last year.

Seasonal Price Reductions & What to Expect Next

Every year, Phoenix real estate activity dips after Thanksgiving. As a result:

• Price reductions rise right before Thanksgiving
• December sees lighter reductions
• January brings the largest wave of new listings—which often triggers another round of price adjustments

Phoenix Real Estate Outlook:  Balanced to Buyer-Friendly

Demand is improving, but inventory is still climbing. Most areas in Greater Phoenix are currently balanced or shifting toward a buyer’s market. Prices remain under pressure, and buyers are prioritizing value—especially when competing with incentives from new-build communities.

KEY TAKEAWAYS

• Q4 activity is the strongest in 3 years
• First-time buyer payments are down 13%–15%
• Prices under $400K and $300K continue to soften
• Wage growth is supporting buyer qualification
• Luxury contracts are outperforming expectations
• Seasonal pricing shifts are underway