» Easing Shelter Costs, Steady Jobs—Why 2025 Is a Buyer’s Market With Staying Power in the Valley

1. Consumer Price Index (CPI) – Phoenix Metro Area

As of June 2025, the CPI for Phoenix–Mesa–Scottsdale rose 0.2% year‑over‑year, with core CPI (excluding food & energy) up just 0.1% annually.
Notably, shelter costs declined by 0.7%, signaling easing pressure in one of the most critical components for housing affordability.

Implication for real estate:

The modest inflation and decline in shelter costs help ease affordability—meaning mortgage payments and housing-related expenses aren’t ballooning rapidly, which reduces urgency to raise asking prices.
This, combined with a plateauing of CPI, has contributed to a market where price growth is slowing—favoring buyers and balancing previously overheated conditions.

2. Employment & Unemployment Trends

Unemployment Rates

In June 2025, Phoenix’s unemployment rate stood at approximately 3.9% (non-seasonally adjusted)—rising slightly from 3.6% a month earlier, yet still well below the long-term average of 5.34%.
Smoothed data from the same period shows a similar 3.6% rate, reinforcing the picture of a tight labor market.

Job Market Momentum

Arizona’s job growth is decelerating: from about 1.2% in 2024 to an expected 1.0% in 2025, before picking up again in 2026–2027.
Metro Phoenix experienced a net loss of 7,500 jobs over the prior 12 months, but experts view this as “statistically insignificant”, with the strong job ecosystem quickly absorbing displaced workers.
Population growth remains robust, continuing to support long-term housing demand and the inflow of new residents.

Implication for real estate:

Low unemployment and steady jobs maintain housing demand and confidence in purchases.
While growth is slowing slightly, job and population fundamentals remain healthy, helping avoid sharp demand slumps.
Builders and investors remain active, especially with large-scale developments and relocation projects fueling long-term housing needs.

3. How These Factors Intersect in the Phoenix Real Estate Market

Here’s how CPI and employment trends are playing out on the ground:

Market Cooling & Buyer Leverage:
- Declining shelter CPI and rising wage pressure (job growth slowing) are reducing urgency for sellers to push prices—and dampening inflation-driven housing costs.
- This shift manifests in price corrections, longer days on the market, and growing inventory.
Affordability Improvements:
- With shelter costs down and inflation more manageable, financially prepared buyers get better entry points into the market.
- Wage growth, including a noted 9.3% YoY rise, is outpacing inflation, creating affordability gains for specific segments.
Job Market Resilience:
- A tight labor market with 3.9–3.6% unemployment, combined with corporate investments (e.g., TSMC “city within a city”) and population growth, sustains housing demand.
Balanced Market Outlook:
- With inflation under control and employment stable, the possibility of a crash is low. Instead, Phoenix is settling into a balanced correction mode—prices are easing, but the market fundamentals remain secure.

Summary Snapshot

Final Takeaway

In 2025, Phoenix real estate is navigating a prudent rebalancing rather than a freefall. The moderate CPI increases and easing shelter costs are boosting affordability, while low unemployment and foundational economic strength maintain demand.

This dynamic presents a window of opportunity for buyers, particularly savvy, well-positioned ones. Sellers—especially at the upper end—may need to adjust expectations. And investors can find potential in long-term product demand, especially in rental and built-to-rent sectors, driven by continued population and job growth.

Grant Van Dyke