Phoenix, AZ

Market Update

Phoenix's population has shown a robust growth trajectory, increasing by approximately 2.3% year-over-year to reach about 5.19 million in 2026. This growth has been fueled by a net migration of 104,650 individuals, contributing to a dynamic labor market with an employment figure of nearly 2.6 million. The unemployment rate stands at 4.2%, which is indicative of a relatively stable job market. The median household income is reported at $90,133, while the renter share is approximately 33.5%, suggesting a significant demand for rental housing in the area.

In the multifamily sector, the HUD Fair Market Rent for a two-bedroom unit is reported at $1,960, which serves as a benchmark below the asking rents. Year-over-year multifamily rent growth is modest at 0.7%, with the median gross rent also holding steady at $1,819. These figures reflect a challenging affordability landscape, as the growth in rents has not kept pace with broader economic indicators, potentially limiting upward momentum in the rental market.

Capital market activity over the trailing 24 months has seen 244 transactions totaling approximately $765.8 million, with a median price per unit of $192,500. The multifamily cap rate remains at 6.93%, which is about 11 basis points tighter than the national median of 7.04%. This stability in cap rates, combined with a slight decline in rent growth relative to national trends, suggests a cautious outlook for investors. As reported by CBRE Research, the multifamily sector may face headwinds in maintaining rent growth momentum, which could influence investment strategies moving forward.