Priced Out? Why Phoenix Buyers Need a $22,500 Raise—and What Arizona Realtors Can Do About It

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It’s no secret that affordability has become the defining challenge in the Arizona housing market—but new data from Zillow shows just how steep that climb has gotten. In Phoenix, buyers now need a $22,500 raise just to afford a typical home, and that’s assuming they’ve already saved tens of thousands for a down payment. This blog breaks down the numbers behind Arizona’s affordability crisis and explores what realtors can do to help buyers stay in the game—and win.

The New Math of Homeownership in Phoenix

Five years ago, a household earning the median income could comfortably afford a typical U.S. home. Today? That same family is about $17,000 short, and in Phoenix, that gap grows to $22,500. Even buyers with a healthy $73,000 saved for a 20% down payment are falling short under current conditions.

According to Zillow’s latest affordability report:

  • The typical U.S. home now costs $367,969.

  • A buyer needs to earn nearly $100,000/year to afford it.

  • That’s up dramatically due to years of rapid home appreciation and elevated mortgage rates.

  • In Phoenix, where home prices have surged over 45% in five years, the affordability gap is one of the widest in the country.

What's Causing the Affordability Crunch?

Even as inventory rises and sellers are slashing list prices (a welcome change from the post-pandemic frenzy), the cost to finance a home has reset the playing field.

Three key drivers are making homeownership harder:

  1. Skyrocketing Home Values:
    Phoenix home values have grown well above the national average over the past five years, especially in desirable areas like Gilbert, Queen Creek, and North Scottsdale.

  2. Higher Mortgage Rates:
    As of mid-2025, mortgage rates are hovering in the 6.5%–7.0% range—nearly double what buyers enjoyed in 2021.

  3. Lagging Wages:
    Incomes simply haven’t kept pace with rising housing costs. In Phoenix, the median household income is around $76,000, far below the nearly $100,000 needed to comfortably buy a median-priced home.

Source: Zillow Housing Market Report 2025

What This Means for Arizona Realtors

This shift presents both a challenge and an opportunity for savvy agents.

✅ Challenge:

Fewer buyers qualify. Deals are falling through more frequently due to tighter financing. First-time buyers are especially vulnerable.

✅ Opportunity:

Agents who can help buyers creatively structure deals—and manage expectations—are becoming indispensable. Here’s how:

5 Expert Strategies Arizona Realtors Can Use Right Now

  1. Leverage Down Payment Assistance Programs
    Many buyers don’t know they qualify for help. Encourage them to explore options like the Home Plus program from the Arizona Industrial Development Authority.
    👉 Arizona Down Payment Assistance

  2. Partner with Lenders Who Think Outside the Box
    Lenders offering flexible debt-to-income ratios or lower minimum credit scores can make or break a deal in this climate.

  3. Promote Homes with Lower Tax or HOA Burdens
    Even small monthly savings can tilt affordability back in a buyer’s favor.

  4. Encourage “House Hacking” and Multi-Gen Living
    Creative living solutions like renting out part of the home or living with extended family are gaining traction and normalizing fast.

  5. Shift Focus to Rent-to-Own and Single-Family Rentals
    With single-family rentals up 41% in the past five years (compared to 30% for multifamily), renters are aging and increasingly willing to pay a premium for flexibility. Help them prepare to buy long-term by positioning yourself as both an educator and guide.

The Hidden Upside: Sellers Are Listening

Zillow notes this is the most buyer-friendly spring market since pre-pandemic. Inventory is up, prices are softening, and sellers are increasingly negotiable. Arizona realtors who bring strong negotiation skills and creative buyer prep can stand out now more than ever.

Final Thoughts

Phoenix’s affordability crisis is real—but so is your role in helping buyers navigate it. By staying informed and providing strategic guidance, Arizona realtors can turn challenging conditions into long-term trust, referrals, and repeat business.

Keep this in mind: you’re not just selling homes—you’re solving problems.

Need more tools to support your buyers?
Check out this down payment calculator and assistance database on Zillow.

By the way, I help realtors improve their online and social media presence by providing beautiful photos of their listings. That is why I’ve created this FREE HOME PREP LIST for your clients to help your listings look their best. Feel free to share.