PHOENIX (AZFamily) — The future of the Phoenix economy took center stage Tuesday, as experts with the Greater Phoenix Economic Council gave their predictions for what 2025 will mean for local jobs, wages and housing.
Economists say everything is pointing to the metro Phoenix becoming a housing hotspot this year, with consumers responding to steadily slower inflation and higher incomes.
“Our economy is looking very similar to the national outlook, but a little better,” said Kristen Stephenson, the senior vice president of research and analytics at GPEC.
Economists vary on their assessments, but there’s one thing experts who spoke today agree: Arizona’s future remains bright.
“We did manage to outpace inflation in terms of wage growth. We saw about a percent and a half growth in our real personal income and about a 0.6% growth in that per capita,” said Stephenson.
There are some sticking points. Unlike the early 2000s, the cost of living in Arizona is now higher than the national average.
“The one that really continues to put upward pressure on our cost of living is that housing index,” she said.
As housing expert Tina Tamboer knows, predicting factors like where mortgage rates will end up can be difficult. This week, the average rate on a 30-year mortgage in the U.S. was slightly above 7%, the highest level in eight months.
She believes elevated mortgage rates, which can cost borrowers hundreds of dollars a month, have discouraged home shoppers.
“We’ll still see a nice boost in demand over the spring time, but how high that boost goes depends on how long we stay above 7% in our mortgage rate,” Tamboer said.
The big unknown is how the steep tariffs against Mexico and Canada, threatened by the new administration, will impact the economy. All experts agreed it would take time to see changes, and the full impact wouldn’t be seen until those final agreements were implemented.
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