Latest U.S. & Local Market Update

The first few weeks of 2025 have seen an increase in homes hitting the market. But does that mean buyers are ready to make offers? Not necessarily. While listings are climbing, sales are lagging, and affordability is still a challenge. With mortgage rates hovering around 7% and home prices remaining high, many potential buyers are staying on the sidelines. The big question: Will sellers adjust expectations, or will the market stall?

Inventory Grows, But Sales Lag Behind

More homes are hitting the market, but that hasn’t translated into more sales. Many sellers may be holding onto high price expectations that buyers aren’t willing to meet.

• New listings rose 7.9% in January compared to a year ago
• Pending home sales dropped 8.1% year over year
• The median price of new listings is up 5.7%
• Homes are spending more time on the market
• Buyers expect discounts, with typical homes selling 2% below list price

Sellers may need to lower asking prices or accept below-asking offers to move properties. With inventory piling up, this could signal a shift in pricing trends.

Also Read: Why Baby Boomers Are Holding Onto Homes Like Never Before

Foreclosures on the Rise, But Still Below Historic Levels

Foreclosure activity is creeping up, but it’s far from alarming. While there has been an increase, numbers are still well below long-term averages.

• 422 notices of trustee sales were filed in January
• Long-term average for foreclosures is 1,846 per month
• 2,973 residential properties completed foreclosure in January nationwide
• Highest foreclosure count since February 2020

This rise is worth watching, but it doesn’t signal a market crash. Most homeowners remain in strong financial positions, making widespread distress sales unlikely.

New Construction Gains Momentum

More new homes are hitting the market, which could help balance supply and demand. While national trends point to increased building, local shifts vary.

• 2024 saw the highest pace of new home sales since 2021
• Builders are expected to continue adding inventory in 2025
• New construction incentives, like rate buy-downs, attract buyers
• Resale sellers less willing to negotiate, making new homes more appealing

Greater Phoenix, however, has seen a slowdown in new building permits. While nationally more homes are coming, local markets may not see the same impact.

Also Read: Housing Market Faces Challenges As Sellers Stay Put For Good

Mortgage Rates & Affordability Still Holding Buyers Back

Affordability remains a major hurdle, with mortgage rates near 7% keeping many potential buyers out of the market.

• Median monthly mortgage payment: $2,784
• Only $21 shy of the all-time high
• A 0.5% drop in rates could bring more buyers back

Fannie Mae surveys suggest that more buyers are accepting high rates as the new normal. But whether they act on that belief remains to be seen.

Greater Phoenix Market Update: A Buyer’s Market?

Greater Phoenix is seeing a rise in inventory, with demand not keeping up. The area remains in a buyer’s market, though some pockets are holding strong.

• 4.7 months of supply in Greater Phoenix, close to the national average of 5 months
• Active listings are increasing but not surging
• Southeast Valley cities like Queen Creek, Mesa, and Gilbert remain stronger
• Some areas, like Scottsdale and Tempe, still lean toward sellers but are weakening

Historically, home sales pick up after the Super Bowl. If demand doesn’t strengthen soon, expect continued price adjustments in the coming months.

Also Read: Greater Phoenix Housing Market 2025 Sees More Home Listings

What’s Next for the Housing Market?

The next few months will be crucial. If rates drop, demand could spike. If sellers lower expectations, more homes could move. But if affordability remains tight and buyers hold off, inventory will continue to climb.

Whether you’re buying, selling, or just watching the market, the landscape is shifting. Stay tuned to our Greater Phoenix real estate blog. 2025 is shaping up to be a pivotal year for real estate.