The Phoenix new construction market is starting to show signs of life, but the recovery still depends on where you look. March brought a year-over-year increase in permits across the Phoenix MSA, yet first-quarter totals still trail 2025 and the rebound remains uneven across cities, builders, and product types.
But the bigger story is not that Phoenix construction has suddenly snapped back. It is that the recovery still looks uneven. March was better but Q1, overall, still came in behind last year.
What the Phoenix New Construction Market Is Telling Us
The clearest positive in the data is the March permit count.
The Phoenix Housing Market Letter shows 1,983 new home permits in March, up from 1,890 in March of last year, a 4.92% increase. That is not a breakout number, but it is enough to suggest builders are still willing to move projects forward where demand, pricing, and location line up.
The HBACA jurisdiction report tells a similar story. Across its selected jurisdictions, March single-family permits totaled 2,001, which was the strongest month of 2026 so far. January came in at 1,366, February at 1,837, and March pushed higher again.
That is what makes this report worth watching. It is not a full rebound. But it is a real improvement.
For broader context, the U.S. Census Building Permits Survey and the New Residential Construction report are useful national benchmarks for tracking how permit and construction trends are moving beyond Phoenix.
Why the Phoenix New Construction Market Still Trails 2025
At the same time, one stronger month does not erase the broader gap.
The Phoenix Housing Market Letter shows 4,987 permits year to date, versus 5,742 at the same point last year. That is a 13.15% decline. The HBACA data shows a similar trend, with selected jurisdictions posting 5,204 permits through March versus 6,408 over the same stretch in 2025, a 19% drop.
That is the balancing point in this market.
If you want to make the optimistic case, March improved and permit activity appears to be regaining some rhythm. If you want to make the cautious case, first-quarter totals are still meaningfully below last year. Right now, both readings are fair.
Phoenix New Construction Market: Permits vs. Closings
One of the most useful takeaways in the HBACA data is that this is not one uniform Phoenix metro story. Some jurisdictions are gaining traction. Others are still pulling back sharply.
A few markets posted strong year-to-date growth through March:
- Casa Grande: 76 permits, up 95%
- Apache Junction: 418 permits, up 76%
- Scottsdale: 108 permits, up 69%
- Florence: 138 permits, up 30%
Those are meaningful gains and a reminder that there are still pockets of the market where product and pricing are working.
Other areas have stayed relatively steady:
- Glendale: 171 permits, down 2%
- Maricopa County: 480 permits, down 5%
- Avondale: 145 permits, down 11%
- Goodyear: 284 permits, down 13%
And then there are the sharper pullbacks:
- Mesa: 163 permits, down 60%
- Coolidge: 39 permits, down 65%
- Gilbert: 68 permits, down 50%
- Peoria: 193 permits, down 40%
- Queen Creek: 207 permits, down 36%
- Surprise: 511 permits, down 33%
- Phoenix: 680 permits, down 20%
- Buckeye: 447 permits, down 18%
- Pinal County: 867 permits, down 19%
That is why the market feels uneven. Construction activity is not disappearing. It is rotating. Some cities are clearly finding their footing faster than others.
Closings are still softer than permits
Permits tell you what builders are preparing to do. Closings tell you what is actually getting over the finish line.
That is where the picture softens a bit.
New home closings in March came in at 1,768, down from 2,110 in March 2025, a 16.21% drop. Year to date, new home closings were 4,458, compared with 5,442 last year, down 18.08%.
That gap matters.
It suggests that while builders are still willing to permit homes and keep projects moving, the conversion to actual closings is still running softer than it was a year ago. In practical terms, buyers are still there, but they are more payment-sensitive, more incentive-driven, and more selective than builders would prefer.
Pricing reflects that kind of market too. In March, the average new home price was $648,985, while the median new home price was $483,986. The median was down 1.06% from a year earlier. That is not a collapse in pricing, but it does suggest builders are still working to match product to today’s buyer.
Mortgage volatility is still part of that equation. For a live read on rate movement, it helps to reference Freddie Mac’s Primary Mortgage Market Survey alongside local construction data.
Resales are doing more of the heavy lifting
The brighter part of the March report came from the resale side of the market.
Resale closings reached 6,797 in March, up from 6,334 a year earlier, a 7.31% increase. Year to date, resales were 16,435, versus 16,016 last year, up 2.62%.
That matters because it shows the broader Phoenix housing market is not frozen. Buyers are still transacting. They are just not leaning into new construction at the same pace they did a year ago.
Resale pricing also looked relatively steady. The average resale price was $650,817, the median resale price was $455,000, and the median resale price change was +0.22%. That is a much firmer resale backdrop than many expected in a higher-rate market.
Builders are still feeding the pipeline
Even with first-quarter totals running behind 2025, builders are not acting like demand has vanished.
According to the March market letter, D.R. Horton led March permits with 304, followed by Taylor Morrison with 230, and Lennar with 152. On the closing side, D.R. Horton and Lennar led major builders with 239 and 192 closings, respectively.
There is also fresh community activity. March saw 12 new communities pull their first permit, adding 1,131 lots to an existing inventory of 47,296 available lots. Even more notable, 10 of those 12 new communities were in the West market area.
That is not the behavior of a market expecting construction to stop. It is the behavior of a market still trying to position itself where the next pocket of demand is most likely to show up.
As activity begins to sort itself out across the Phoenix MSA, local financing context matters more too. AZ Construction Loan presents itself as an Arizona-focused construction lending resource, with programs including construction-to-permanent, lot purchase, owner-builder, physician construction, renovation, and barndominium financing. The site also has a dedicated Arizona Markets page for location-specific coverage across Phoenix, Scottsdale, Tucson, Flagstaff, Sedona, Prescott, Gilbert, and Queen Creek.
What this says about the Phoenix market
The cleanest way to read this market is probably this:
Phoenix construction is not dead. It is not booming either. It is sorting itself out.
Permits improved in March. Resales were solid. Builders are still opening communities and adding lots. But new home closings remain down, and first-quarter permit totals are still below last year.
That is what an uneven market looks like.
It is a market where some submarkets still have real momentum, some are merely holding their ground, and some are still clearly pulling back. It is a market where buyers are active, but more payment-sensitive. And it is a market where builders are still willing to play offense, just not with the same confidence across every jurisdiction.
Bottom line
If you are watching the Phoenix construction story in 2026, March was a welcome step in the right direction.
But it was still just a step.
The better permit numbers are encouraging, especially after a long stretch of weaker comparisons. At the same time, the first-quarter totals remind us that this market is not running evenly yet.
For now, the Phoenix-area construction story is less about a full rebound and more about selective strength.
The builders, locations, and projects that match today’s buyer are still finding traction. The rest of the market is still waiting for momentum to broaden.
Sources
HBACA 2026 Single Family Building Permits for Selected Jurisdictions
The Phoenix Housing Market Letter, Volume 497, March 2026 market data
U.S. Census Building Permits Survey — https://www.census.gov/construction/bps/index.html
U.S. Census New Residential Construction — https://www.census.gov/construction/nrc/index.html
Freddie Mac Primary Mortgage Market Survey — https://www.freddiemac.com/pmms
AZ Construction Loan — https://azconstructionloan.com
AZ Construction Loan Arizona Markets — https://azconstructionloan.com/arizona-markets
