Insights
Market reports, forecast data, industry insights, and more from iEmergent.
Winter may be settling in at our Iowa headquarters, but for this month’s mortgage market forecast, we’re turning our attention to the sunny skies of Phoenix, where it was a balmy 70 degrees on New Year’s Day. As we kick off 2025, let’s explore mortgage market growth in The Valley of the Sun.
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The Phoenix-Mesa-Chandler core-based statistical area (hereafter referred to as the Phoenix market) has over 1.8 million households and an overall homeownership rate of 65.6%. This market offers substantial opportunities for mortgage and real estate professionals. We’re predicting more than 67,000 purchase loan originations in 2025 with an average loan size of $491,000, or more than $33 billion in purchase loan volume for the year.
When we map our 2025 forecast at the census tract-level, pockets of opportunity — indicated in bright red and orange — stand out on the southeast, south, west, and northwest sides of the city:
iEmergent’s Mortgage Velocity Index (MVI) provides a unique perspective on market growth by comparing a local area’s projected loan growth rate to the national average. An MVI of 1 means a market is growing in line with the U.S. average, while an MVI above 1 indicates faster-than-average growth. With an MVI of 1.7, Phoenix is positioned as a high-growth market, offering lenders opportunities to expand their portfolios and better serve a growing population.
An MVI of 1 indicates a market growing in line with national trends. For comparison, Las Vegas (1.99) is expanding at an even higher rate, Washington, D.C. (1.68) is growing faster than the national average but falls just short of Phoenix’s 1.7, and Chicago (0.84) is growing at a slower rate.
Statistically significant homeownership gaps persist between minority populations in Phoenix. The data below illustrates the disparities:
Homeownership Rates:
The Black homeownership rate trails the market average by 27.9 percentage points, highlighting a pressing need for targeted lending initiatives. Our forecasts predict $2.9 billion in loan growth to diverse borrowers in Phoenix from 2023 to 2026—and with proactive programs and outreach, that figure could grow even higher.
Similarly, loans to Black borrowers in this market are concentrated within a small number of neighborhoods, emphasizing the need to broaden access through targeted initiatives.
Another area of opportunity lies in serving low-to-moderate-income (LMI) borrowers. Forecasts show more than $1.1 billion in new LMI loans in Phoenix between 2023 and 2026, spread across both LMI and non-LMI census tracts. Lenders prioritizing these borrowers can help expand homeownership access while strengthening their portfolios.
LMI Census Tracts in Phoenix
Phoenix is also poised for significant refinancing activity, driven by both interest rate trends and shifting housing market dynamics. Refinance loans are expected to more than double by 2026, with minority borrowers representing about one-fourth of this growth. This surge presents opportunities for lenders to help diverse borrowers lower their rates and build wealth through homeownership.
Imagine having access to hyper-local data to drive your 2025 lending strategies. iEmergent’s proprietary forecasts and Mortgage MarketSmart platform empower lenders to:
Ready to see what this data can do for your business? Let’s talk about how you can leverage market intelligence to plan for growth in Phoenix and beyond.