By Staff Reporter |
A new analysis of housing data found that less than half of households in Arizona could afford their monthly mortgage in 2025.
A new report from the Common Sense Institute (CSI) determined that only 42% of Arizona households could afford their mortgages last year.
In 2019, 66% of Arizona households could afford their monthly mortgages.
The report also found that the state faces a 56,000-unit housing shortfall, and estimated a long-term cumulative housing deficit of 110,800 units.
Based on those estimations, CSI predicted that it would take well over a century — 119 years — to close the housing gap in Arizona.
CSI found that Arizona households need to make $87,000 annually or nearly 60 hours of work per month at the average hourly wage rate ($35.10) to afford a typical home mortgage. In 2019, the hours of work per month needed to afford an average mortgage amounted to just under 40 hours.
CSI’s analysis found that housing costs remain elevated while building permits have declined.
Although home prices fell by about 3% in 2025, the average home was estimated to cost nearly $42,000 (or 11%) above the pre-pandemic pricing — nowhere close to historical trends or price-to-income ratios. Home prices peaked in 2022.
At present, the average house in Arizona costs nearly $421,000. That figure represents a 3.4% decline from summer 2024 and an 8.6% decline since summer 2022. However, that average home cost sits $142,900 higher than the average cost in 2019.
As of February, the average 30-year mortgage rate was over 6%.
Compared to the earliest data provided (2015), many things have increased greatly for Arizonans: the average home price (doubled), the average mortgage payment (nearly tripled), and the hours of work required (nearly doubled).
The average home pricing in December 2015 was just over $211,100, with a 30-year mortgage rate just under 4%, an average mortgage payment of $800, and the average wage rate of $23.23 requiring 35 hours of work per month.
Average monthly mortgage payments doubled from 2019 to 2025: about $1,000 in 2019 to $2,000 in 2025.
The state issued just under 51,000 residential building permits last year, representing a 14% decline from 2024.
Though lower, last year’s total permits fell within the range for keeping up with population growth and housing demand. CSI estimated that the state needs between 45,000 to 60,000 permits annually to keep pace with growth and demand. Maintaining that safety range doesn’t appear to be the reality shaping up for 2026, however. The state authorized about 3,000 new housing units in January, putting the state on pace to have 36,700 units by the year’s end — well below the necessary annual permit range.
This report on the state of housing was released around the same time as the latest employment report from the Senate’s Joint Economic Committee (JEC).
The JEC found that the unemployment rate remained unchanged in April (4.7%), which is higher than the national unemployment rate (4.3%). The state had an increase in about 8,100 net payroll jobs, one of 42 states to experience an increase; in March, the state had a 1,900-job increase.
Over the past year, Arizona added 13,300 payroll jobs and the unemployment rate rose by 0.5%.
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