Phoenix Metro Update - February 2025

Debunking Housing Market Myths: What You Need to Know in 2025

The real estate market is constantly evolving, yet certain outdated narratives persist, causing confusion for buyers and sellers alike. Whether it's speculation about home values, mortgage rates, or buying opportunities, misinformation can lead to missed opportunities. Let’s break down the seven most common housing myths and what’s actually happening in today’s market.

Myth #1: Buyer Demand Is Declining

This may have been true in 2022 and 2023, but not anymore. Despite mortgage rate fluctuations, buyer demand has remained stable and is following last year’s trend. Many buyers have adjusted to the new market conditions and are still actively purchasing homes.

Myth #2: There’s Nothing to Buy Under $300K

A few years ago, affordable homes seemed nearly impossible to find. However, inventory levels have changed. In Maricopa and Pinal Counties, there are currently 534 single-family homes available under $300K, compared to just 90 in early 2022. Condo and townhome options are even more abundant, with over 1,200 active listings in Maricopa County alone.

Myth #3: My Income Is Too High for Homebuyer Assistance

Many assume they don’t qualify for assistance programs due to their income, but that’s not necessarily the case. Some programs are area-based rather than income-based, and others have income limits as high as $150,000 per year. In fact, some have no income limits at all. Doing your research or consulting a qualified loan officer can reveal financial assistance options you might not have considered.

Myth #4: You Must Be a First-Time Homebuyer to Qualify for Assistance

While some programs use the term “first-time homebuyer,” the definition is broader than most realize. According to HUD, you are considered a first-time buyer if you haven’t owned a home in three years. Additionally, divorced individuals who previously owned a home with a spouse, single parents, and those who’ve only owned a mobile home may also qualify.

Myth #5: Mortgage Rates Are Too High, and There’s Nothing I Can Do

Higher mortgage rates may pose challenges, but buyers have options. In January, 57% of sales between $200K–$600K included seller-paid incentives, often used for temporary or permanent mortgage rate buydowns. Additionally, some FHA and VA loans are assumable, offering rates below 5%. Exploring available programs and seller incentives can significantly improve affordability.

Myth #6: Housing Prices Are About to Crash

While the market experienced a correction in 2022, leading to a 12.3% drop in prices between May and December of that year, home values have since stabilized. Currently, price appreciation is modest, averaging less than 2% annually—lower than the rate of inflation. Negotiations may lead to minor price reductions, but a large-scale crash isn’t supported by current supply and demand indicators.

Myth #7: Selling “As-Is” at a Low Price with Incentives Will Guarantee a Sale

In a buyer’s market, selling “as-is” only works if the home is in excellent condition. The most successful sellers prioritize both pricing and condition. When buyers have more choices, well-maintained homes stand out, while those in poor condition struggle to compete, even with incentives.

Final Thoughts: Stay Informed to Make Smart Real Estate Moves

The Greater Phoenix housing market continues to shift, and staying informed is key to making the right buying or selling decisions. If you have questions or need guidance, I’m here to help.

For more insights, contact me, Bret Johnson, at 480-775-7700 or email me at bret@renetgroup.com. Let’s navigate this market together!

Reference:
This summary is based on insights from Tina Tamboer, Senior Housing Analyst with The Cromford Report.
©2025 Cromford Associates LLC and Tamboer Consulting LLC