NE Valley Times

Many believe that the real estate market is struggling, but there are positive aspects to consider. The Phoenix area housing market shows signs of stability and potential growth in 2025.

Price increases in the Phoenix metro area have stabilized after a significant rise from $35,600 in early 2021 to $502,910 in late 2022. According to the Federal Reserve Bank of St. Louis, this was due to post-pandemic home-buying exuberance followed by interest rate hikes starting in 2022.

Mortgage rates are more favorable now than last year. Mortgage News Daily reports current 30-year fixed rates at 7.03%, down from a peak of 8.03%. This change enhances buyers' purchasing power.

Interest rates are expected to remain stable as the Federal Reserve plans to gradually adjust its benchmark fed funds rate towards a target of 2% by 2026. This stability will help balance supply, demand, and pricing in the housing market.

The Phoenix economy continues to show strength with job growth outpacing national averages. As of September 2024, jobs increased by 1.8% with an unemployment rate of only 3.4%, according to the U.S. Bureau of Labor Statistics. Projections suggest Arizona will add 1.2 million jobs over the next three decades, with Phoenix contributing significantly.

Demand for homes remains strong due to population growth driven by migration from higher-cost areas like California. The population grew by 1.27% in 2024 and is expected to nearly double by 2055, reaching approximately 7.6 million residents according to NCH Stats.

In summary, owning a home in Phoenix remains a promising investment due to job market strength and favorable economic conditions supporting homebuyers' financial capabilities.