Arizona has long been a magnet region for many of the top builders. The state is home to two of the largest new-home markets in the nation, Phoenix (No. 3 on the 2025 Local Leaders list) and Tucson (No. 37), and benefits from strength across a variety of job sectors
The Zonda Dealmakers event in Arizona will uncover the dynamics impacting the new-home sector in the state. Strength in several industries, including manufacturing and health care, is supporting income and population growth in the state, both positives for the housing sector.
While new-home sales decreased on an annual basis in Phoenix and Tucson in the final months of 2025, forecasts support employment growth and improving income profiles are lifting local purchasing power in the major Arizona markets.
“As the two major Arizona markets enter 2026, their housing markets are likely to improve, with closed sales rising, moderate price growth, and inventory gradually shifting toward more balanced conditions after years of tight supply and intense competition,” says Peter Dennehy, principal of home building for Zonda Advisory. “Even modest rate declines are translating into real monthly cost savings, which can stimulate purchase activity, bolster demand, and support a gradual uptick in closed sales.”
At the Arizona Dealmakers event, Zonda advisory experts, including Dennehy, Ali Wolf, Nicollette Chapman, Kimberly Byrum, and Tim Sullivan will detail the national and regional housing landscape. Representatives from Risewell Homes, Howard Hughes Communities, and Lennar will share insights from on the ground while leaders from the Arizona Cardinals and the Phoenix Suns will discuss what role sports development is having on the future of the real estate market in Arizona.
Below are snapshots of the Phoenix and Tucson markets ahead of the event.
Phoenix
The Phoenix-Mesa-Chandler metro has emerged as a hub for manufacturing and semiconductor investment, with $113.9 billion in announced industry investment supported by an expanding supply chain and workforce development efforts. This investment, coupled with the strength of the health care sector, have supported income gains across Phoenix.
“Phoenix’s broader economic story is one of transformation, as semiconductor, advanced manufacturing, technology, and healthcare sectors drive high-wage job creation and deeper investment,” says Dennehy.
The median income has risen more than 30% since 2019, an important factor for housing demand in the higher rate environment. High income employment is outpacing overall growth and the improving income profile of Phoenix residents is supporting greater purchasing power across the region.
In the new-home market, starts and sales declined on an annual basis in 2025. The moderate median price of both new and existing homes ($499,990 and $449,900, respectively) has remained steady while job growth and population growth are projected to remain positive in the next two years.
Tucson
The New Home Pending Sales Index in the market is down on an annual basis and significantly lower than the levels measured in 2023. Annualized closings ticked down in the third quarter of 2025 but were up on year-over-year basis. While observed new home closings were strong over 2025 than in previous years, total housing inventory in the market has been more conservative and is at its lowest level since 2019.
New home closings were most numerous in the $350,000 to $400,000 price range, as were starts and deliveries, suggesting a balanced market with well-positioned inventory.
The forecast for household growth is strongest in Tucson in the $100,000 to $200,000+ median income range, with the overall market’s median income projected to average 3.7% growth in 2026 and 2027. This growth supports future conditions for new-home demand and sales. However, two of the three high-income job sectors in Tucson saw year-over-year job losses, according to September 2025 data. Another potential weakness in the market is permit activity that was nearly 10% lower in 2025 than the previous year.
The Arizona Dealmakers event takes place Jan. 30 at the Westin Kierland Resort & Spa. Register here.
