The booming Phoenix metro area, which includes the cities of Mesa and Chandler, is being looked at as one of the nation’s top 10 housing markets for 2025.
In a new study published by the National Association of Realtors, the Phoenix area is highlighted for becoming a “key destination for residents migrating from California, driven by its comparatively lower cost of living and housing affordability.”
The report, Housing Hot Spots for 2025, adds that the migration to metro Phoenix is additionally enhanced by the area’s “strong job growth, which has expanded by 12% in the last five years.”
This combination of lower housing costs and a robust job market, continues the report, “has established Phoenix as a prosperous and dynamic market.”
Metro Phoenix is the only western real estate market to make the national top 10, with most of the other markets based in either the midwest or southern border states.
In an overview of where things stand nationally, the report notes: “The year ahead is poised to bring more opportunities for homebuyers as the housing market continues to stabilize.”
Calibrating the impact of the Federal Reserve continuing to ease up on interest rates, the report forecasts a 6% mortgage rate in 2025 as the “new normal.” And in so doing, says that that 6% rate will mean that “about 6.2 million households can once again be able to afford median-priced homes, compared to the current constraints with rates near 7%.”
Despite such positive trends, the report is careful to observe that “inventory levels are still expected to fall short of pre-pandemic norms, continuing to present challenges for buyers.”
According to a separate report just released by the Arizona Republic, metro Phoenix currently ranks as number three nationally in terms of population growth, adding more than 92,000 people last year.
The NAR report’s mention of California migration to Phoenix underlines the population dynamics of what are now the two largest metro areas in the West. In the 1950s, Los Angeles was already up to 2 million people, while Phoenix was at just under 100,000.
According to the latest Census figures, the population of Los Angeles in the last decade has remained static at around 3.8 million, while Phoenix is now just under 1.7 million.
December 30, 2024
By Garry Boulard
Photo courtesy of Unsplash
