As we move into the coming year, the real estate market looks less like a rerun of recent volatility and more like a gradual return to balance. Several national forces — easing mortgage rates, improving affordability, and greater inventory — will shape activity, but regional dynamics, especially in hot Sun Belt states like Arizona, will add important local flavor. Here are the top trends to watch and what they mean for buyers, sellers, and agents across Arizona.
1. Mortgage rates slowly ease (but stay above pre-pandemic lows).
After a year of elevated borrowing costs, mortgage rates have begun to retreat from their peaks. That decline is already improving buying power for many households and is expected to continue modestly through the next year, encouraging more buyers off the sidelines without sparking a price surge. This will make refinancing and new purchases marginally more attractive while keeping the market measured. AP News
2. Affordability improves, but challenges remain.
Analysts forecast a modest improvement in affordability as wages climb faster than home price growth in many areas. National forecasts point to only slight increases in median home prices next year, meaning buyers could regain some ground if incomes continue to outpace inflation. Still, limited supply in entry-level segments and high local demand mean first-time buyers will continue to face hurdles in many markets.
3. Inventory recovery creates more balanced markets — especially in Phoenix.
After the extreme seller’s market of the pandemic era, inventory has begun to normalize. More new listings and a healthier resale pipeline mean buyers will find choices without the frantic bidding wars of recent memory. In Arizona — and particularly the Phoenix area — new listings and pending sales have shown resilience compared with national averages, creating pockets of competitive activity while still offering opportunities for negotiation.
4. Sun Belt demand and migration patterns persist.
Arizona’s appeal—affordable land relative to coastal metros, job growth, and lifestyle amenities—continues to draw relocators. That inward migration supports long-term housing demand across Phoenix, Scottsdale, and several suburban corridors, keeping pressure on well-priced homes and fueling growth in new-build communities. Expect builders to shift incentives as the market balances, which will affect where and how quickly new inventory is absorbed.
5. Technology and changing buyer preferences reshape the search.
AI tools, virtual tours, and enhanced listing platforms make it easier for buyers to narrow choices before seeing homes in person. For Arizona agents, embracing high-quality photography, interactive tours, and data-driven neighborhood intel will be essential to stand out. Buyers will continue to prioritize outdoor space, home offices, and energy efficiency — features that align with Arizona’s climate and lifestyle.
6. Local policy and affordability initiatives will matter.
State and municipal decisions about zoning, infrastructure, and incentives for affordable housing will influence how quickly Arizona’s supply problems ease. Stakeholders should watch local initiatives targeting missing-middle housing and infill development; these measures can reshape inventory availability in the next several years.
Bottom line: The coming year should feel steadier, not sensational. National trends toward modest price growth, easing rates, and greater inventory will set the stage — and Arizona’s unique migration patterns and market resilience mean the state will likely experience both ongoing demand and meaningful opportunities for buyers who prepare well. Whether you’re buying, selling, or advising clients, the smartest move will be to monitor interest rates, know local inventory dynamics, and lean into technology and targeted marketing to capture the market’s quieter momentum. Let’s connect!
