The diversity of Tucson’s housing is, on the surface, contradictory.
Local first-time homebuyers grapple with rising costs, yet out-of-state homebuyers don’t blink at dropping millions into a second home.
National homebuilders remain confident in the Tucson market, and although permits for new homes have slowed, developers are preparing large swaths of land for future homes as closings on new homes hold steady.
“The positive resale and new home permit data point to better days ahead,” said local housing analyst Jim Daniel, with R.L. Brown Reports. “The overall market is starting to see some balance as builder inventory home supply continues to decrease and new communities open.”
The average new home price in March topped $500,000 for only the third time in Tucson market’s history. The average price rose to $513,062 in May 2023, then settled back down before climbing to $503,375 in January 2025 before it dipped again.
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March 2026 saw an average new home price of $507,282.
Sales of existing homes continue to be flat due to homeowner uncertainty about giving up long-held low mortgage rates or their willingness to budge on asking prices.
Daniel notes that major price hikes from April 2020 to May 2023 caused existing home prices to shoot up by $118,750.
“During this time, institutional and home flippers competed against each other, pushing prices higher and sidelining individual buyers,” he said. “When mortgage rates rose, institutional investors exited, but prices have remained flat since. Damage was done.”
That has benefited new home builders, and the first quarter of the year saw permit activity increase by 12.1 percent over the first quarter of 2025.
Builders, some new to the Tucson market, are buying lots that have yet to be permitted.
Ashton Woods/Starlight Homes, for example, has bought 1,075 new home lots on the city’s southeast side.
“When this builder fires up, the Tucson housing market numbers will benefit,” Daniel said.
Another rapidly growing area, near Twin Peaks Road and Interstate 10, continues to see much activity.
BP Cascada Partners bought 143 acres for commercial and residential development, and D.R. Horton bought 132 acres for the first phase of a 600-plus homes and townhomes development.
On the upper-income side of the market, a Canadian company is building a 62-home community within The Ritz-Carlton, Dove Mountain master-planned community in the Tortolita Mountain foothills with price tags starting at $2 million.
Developer Replay Destinations says those homes will appeal to retirees and snowbirds.
Some locals, who are struggling to buy a starter home, have an “are you kidding me?” reaction to these luxury developments, but snowbirds from throughout the U.S. and Canada have a major impact on the economy.
Phoenix, Scottsdale, Tucson and Yuma are all popular destinations for snowbirds who contribute close to $2 billion annually to Arizona’s economy through shopping, dining and hotel stays while exploring the state’s destinations and with their property taxes.
