by Matthew Holloway | May 14, 2026 | Economy, News
By Matthew Holloway |
Arizona’s housing market continues to face significant affordability challenges despite slowing home prices and rising inventory levels, according to an update released this week by the Common Sense Institute (CSI) Arizona.
The report estimates Arizona faced an immediate housing shortfall of 55,992 units in 2025, while the state’s cumulative long-term housing deficit has reached approximately 110,837 units. According to CSI, current residential permitting trends suggest it could take more than a century to eliminate the existing housing gap.
CSI reported Arizona issued 50,983 residential permits in 2025, representing a 14 percent decline from 2024 and the slowest pace of permitting activity since 2019. The organization concluded that slowing construction activity continues to constrain the state’s housing supply, despite weakening demand in some markets.
“Arizona’s housing market is no longer experiencing the rapid price growth seen during the pandemic-era boom, but affordability challenges remain deeply embedded in the market,” said Glenn Farley, Director of Policy and Research at Common Sense Institute Arizona. “The state continues to face significant supply constraints, and while softer demand has created some short-term relief for buyers, long-term progress will ultimately depend on a sustained increase in housing production and permitting activity.”
According to the report, Arizona’s housing market has become more favorable for buyers in the short term as inventory levels rise and price growth slows. However, CSI stated the shift reflects softer buyer demand rather than substantial improvements in housing availability.
Average home prices in Arizona declined approximately 2.9 percent in 2025, though CSI noted prices remain roughly 11.1 percent above pre-pandemic trends. The report estimated the average home price statewide at approximately $420,900.
Mortgage affordability also remains under pressure. CSI estimated that a household would need an annual income of approximately $87,000 to afford the average-priced home in Arizona under conventional underwriting standards.
The organization found Arizona households now require roughly 58 hours of work per month at the average wage to service a standard mortgage payment, compared to approximately 38 hours per month in 2019. CSI estimated only 42 percent of Arizona households can currently afford the monthly mortgage payment on an average-priced home without exceeding standard debt-to-income guidelines. In 2019, approximately 66 percent of households met that threshold.
CSI also reported that Arizona home prices have declined approximately 3.4 percent statewide since June 2024, representing the third-fastest rate of decline nationally during that period.
It assigned Arizona a preliminary “C-” Housing Report Card grade for 2025, down from a “C+” at the end of 2024. The report follows CSI’s earlier affordability rankings that identified Arizona among the least affordable states in the country based on housing costs relative to household income.
Farley and CSI Arizona Senior Economist & Research Analyst Zachary Milne, who co-authored the report, concluded, “Arizona’s market is healthier than it was but remains paralyzed by inefficiencies. Prices have stopped rising but also haven’t come down much off their all-time highs. Combined with high interest rates, entering the housing market remains a daunting task for any prospective new buyer. Home permitting is slowing, migration and household formation are down, and the state is losing its luster as an affordable place to move to and create a life.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Ethan Faverino | Sep 15, 2025 | Economy, News
By Ethan Faverino |
Arizona homeowners and prospective buyers are experiencing a cooling housing market, with the state ranking third lowest in the nation for house price growth in the first half of 2025, according to a new study by Portland Real Estate.
Median home prices in Arizona rose by just 3% from $481,388 in January to $497,500 in June, placing the state’s housing costs just 9% above the national average of $457,183.
The study, which analyzed home sale data from Realtor.com across all 50 U.S. states, highlighted a significant shift in the national housing landscape.
While states like Michigan (22% increase) and Ohio (18% increase) led the nation in price growth, Arizona’s modest 3% rise ties with Utah, Delaware, and Mississippi for the third-lowest growth.
Only Florida (1%) and Hawaii (-5%) saw smaller changes in home values.
“This represents a significant shift from the pandemic and post-pandemic years, when states like Florida, Arizona, and Utah dominated price growth charts,” said a Portland Real Estate spokesperson. “What we’re seeing now is likely the result of affordability concerns driving buyers to previously overlooked markets where housing remains relatively affordable despite recent increases.”
Nationally, the study reveals Michigan, Ohio, Rhode Island, Connecticut, and Virginia are the top-ranked states, accounting for over 40% of all prices increases nationwide.
For Arizona residents, this slower growth could signal a more stable market, offering relief to first-time home buyers and those looking to upgrade. Despite the modest increase, Arizona’s median home price remains above the national average, but the cooling trend could mean potential stabilization after years of rapid appreciation.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by AZ Free News | Jun 3, 2021 | News
A leading property information provider, today released its home price forecast for April 2021, and the numbers show that baby boomers are keeping prices high. It turns out that in response to rising home prices, baby boomers — who own 54% of the nation’s homes — may wait to sell their homes, creating further inventory pressures for older millennials seeking move up-purchases.
At the state level, Idaho and Arizona continued to have the strongest price growth at 27.2% and 20.4%, respectively. South Dakota also had a 19.3% year-over-year increase as new home buyers seek out more affordable options, space and low property taxes.
Sparse inventory and high demand continues to place upward pressure on home prices, creating challenges across generations as buyer preferences shift, according to the CoreLogic Home Price Index.
Younger millennials continue to enter the market in droves while older millennials look to upgrade and upsize their homes. In a recent CoreLogic consumer survey, the need for more space was noted as the top driver (64%) for demand among these cohorts.
The increased competition among buyers may cause a ripple effect and create affordability challenges for baby boomers interested in downsizing or relocating. Notably, 72% of this cohort list the desire for a new location as the main reason for wanting to purchase a new home.
“As older homeowners become more comfortable with listing their homes, they are faced with the reality that if they sell, they may get a smaller home for the same price as what they already have,” said Frank Martell, president and CEO of CoreLogic. “Rather than decreasing their financial burden and cashing out equity to support their retirement, baby boomers may choose to stay put — which could exacerbate inventory challenges.”
What we know:
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- Nationally, home prices increased 13% in April 2021, compared with April 2020. On a month-over-month basis, home prices increased by 2.1% compared to March 2021.
- Appreciation of detached properties (14.7%) was more than double that of attached properties (7.2%) in April as prospective buyers continue to seek out more space.
- Home prices are projected to increase 2.8% by April 2022, as affordability and supply challenges drive potential buyers out of the market, causing a slowdown in home price growth.
- In April, home prices rose sharply in the west with Coeur d’Alene, Idaho, experiencing the highest year-over-year increase at 31.4%. Boise City, Idaho, ranked second with a year-over-year increase of 28.6%.
“Baby boomers are staying in their homes longer, slowing the pace with which existing homes come on the for-sale market,” said Dr. Frank Nothaft, chief economist at CoreLogic. “Owner occupants today have been in their homes for a median of 13 years, about 50% longer than the previous generation.”
