Cap Rate in Phoenix, AZ

2026 Market Overview for Real Estate Investors

Avg Cap Rate

4.9%

#40 of 50 markets

Median Home Price

$385,000

Purchase price

Median Monthly Rent

$1,650

$19,800/yr gross

Rent-to-Price Ratio

0.43%

Below 1% rule

Cap Rate Rating

Moderate

Typical for stable markets with moderate growth potential. Balanced risk-return profile.

Market Snapshot

Population	1,608,139
5-Year Population Growth	+11.0%
Median Household Income	$60,000
Vacancy Rate	6.0%
Property Tax Rate	0.62%($2,387/yr)

Investor Takeaway

Phoenix is a migration magnet with strong semiconductor and tech job growth (TSMC, Intel). Cap rates have compressed from the 2020-2021 price run-up, but population growth supports long-term rent appreciation.

Quick Math

Estimated annual numbers for a median-priced property in Phoenix, AZ before financing:

Annual Gross Rent$19,800

Less Vacancy (6.0%)($1,188)

Less Property Tax (0.62%)($2,387)

Less Est. Insurance + Maintenance($7,700)

Estimated NOI$8,525

Implied Cap Rate2.2%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.