Phoenix’s housing market has rebounded and become an economic success story, with a fast-growing job market and economy. However, challenges such as dwindling water supplies and a rising homeless population remain. The market is stabilizing, with increasing inventory and potential for price cuts and sales incentives in 2023. Despite high demand, there is a risk in water supply for smaller subdivisions and rental properties. The rental vacancy rate is above the national average, allowing room for negotiation between tenants and landlords. Rising mortgage rates may deter potential buyers, while consumer sentiment remains cautious due to inflation concerns. Arizona’s foreclosure and delinquency rates remain low, and home sales may increase if prices continue to moderate. Builder confidence is up in the West Census Region, and the Architecture Billings Index indicates a faster recovery in commercial real estate construction compared to the national average.