‘A new normal’: Albuquerque housing experts say the market is stabilizing after a ‘bumpy’ 2025

Albuquerque resident Brenda Tryon and her husband have dreamed of owning their own home for years, but life — in one way or another — always seemed to get in the way.

Now, the two — both in their 40s — are in stable spots in their careers and getting ready to purchase their first home.

“It feels really nice,” Tryon said. “I'm just excited to have something that's mine — that if I want to paint the walls, I can. If I want to change something, I don't have to ask anybody. Or if something breaks, I don't have to have somebody come fix it for me. I’m just excited to get started. It’s been a long time coming.”

While the couple found their dream home after just two in-person showings in March, weeks of online research dating back to August of last year left Tryon — originally from El Paso — with the impression that Albuquerque’s housing market was “limited and expensive,” she said.

Tryon’s experience aligns with both national and local trends that shaped last year’s housing market. For Albuquerque, those trends included a low but growing inventory, elevated mortgage and interest rates, rising home prices, high construction costs, a relaxing supply chain, faster construction times and rising ages for first-time homebuyers.

Local builders, Realtors and lenders described the picture they have of last year’s market as challenging and bumpy, but also stabilizing.

“I think there’s still a little bit of dissonance coming off of COVID,” said Teri Hatcher, 2026 Southwest MLS president and co-owner of The Hive Real Estate Collective, an independent, locally owned brokerage. “It’s always a cycle, but we’re coming out of such a crazy period of time to something that’s a little bit more stable.”

Mackenzie Bishop, co-founder and co-owner of the Albuquerque homebuilder Abrazo Homes, agreed.

“The market has settled down and is returning to some kind of equilibrium and stable level,” Bishop said. “It's a new normal.”

‘Every sale was harder’

While the market and prices are stabilizing, Bishop said, the new normal looks a lot different than it did two decades ago, from a builder’s perspective.

Before 2006, the Albuquerque market used to average about 4,000 single-family building permits per year, but for about the last decade and a half, the city is averaging between 1,400 and 2,200, Bishop said.

“Every year we do that, we fall behind,” he said. “The market is constrained.”

The Duke City is 13,000 to 28,000 units short of meeting the demand for housing, according to estimates by Root Policy Research. In 2025, the inventory of single-family homes for sale also decreased to 11,706 — a 7% drop from 2024, according to the Greater Albuquerque Association of Realtors’ 2025 Annual Market Report.

Companies like Abrazo Homes are slowly chipping away at the gap, with 210 homes built last year. But the year wasn’t without challenges. Bishop said 2025 was “uniquely challenging” and, in some ways, more difficult than when he and co-owner Brian McCarthy launched the company in 2010, right around the tail end of the Great Recession and during its “very long, protracted recovery” period.

Affordability was at the center of Abrazo’s challenges last year, Bishop said. Abrazo has had to nearly double its prices over the last five years to counteract skyrocketing construction costs — something customers struggled to absorb amid high interest rates and broader economic uncertainty tied to tariffs and shutdowns.

“Every sale was harder. Every sale required a lot more in terms of incentives and concessions to make affordability work for the customer,” Bishop said. “At the end of the day, that costs money and ultimately decreases volume. … It’s a very challenging environment.”

Overall, the greater Albuquerque area saw a median sales price of $370,000 last year, up nearly 3% from 2024.

Riding the ups and downs

On the flip side, one trend that took a turn for the better last year was constrained supply chains. Cost increases over the last five years made getting construction supplies difficult, but last year, production and getting what the company needed to build homes was “relatively easy,” Bishop said.

But while costs have stabilized on vertical construction, land development costs continue to “stubbornly increase,” he added.

Working through bureaucratic red tape with local governments — particularly Albuquerque and Santa Fe — also proved challenging, Bishop said, but improved access to quality supply and a talented pipeline of constructions and trades workers cut build times by half compared to two years ago.

“We had really high quality work being done,” Bishop said.

Last year’s single-family home sales in the Albuquerque metropolitan area also showed an upward trend, with 2% more closed sales — up to 9,820 — than the year before. The area’s full-year home sales have gradually risen since 2023, which saw 9,609 sales — a significant drop from 11,596 in 2022 and a peak of 14,921 in 2021.

“The thing about real estate — I’m passionate about it, I’m a believer in it — is it just keeps going,” said Hatcher, a Realtor of two decades. “You’ve just got to be able to ride the ups and downs of it, because our lows are never as low as the last one.”

Rates shaping behavior

Hatcher agreed that interest rates were a struggle for many clients last year, creating a barrier primarily for first-time buyers. On the seller side, Hatcher saw many people sitting on and hesitant to part with properties they bought with yesteryear’s lower rates, but the higher rates have also made sellers more willing to be flexible with buyers and offer concessions and price reductions, she said.

“I wouldn’t say it’s a buyer’s market, but the sellers are no longer in complete control,” Hatcher said.

While recent rate averages of 6% seem high compared to lower rates seen in the last decade, current rates are more aligned with where they have sat historically, according to Jamie Aguilar, Sunward Federal Credit Union’s chief lending officer.

“When 2021-2022 came, everybody was in these really low interest rates, and for years, people were like, ‘We’re going to get back there.’ But that wasn’t the normal market,” Aguilar said.

Rates often receive a lot of attention from the credit union’s members and create hesitancy in the market, but Aguilar said they are just a portion of the pie and don’t impact borrowing behaviors as much as the total amount buyers expect to have coming out of their pocket — from insurance to property taxes.

Sunward attempts to address affordability for clients by building in a buffer for economic shifts versus maxing clients out on payments, Aguilar said.

Looking ahead

Nearly three months into this year, these local building, brokering and lending experts are feeling good about how Albuquerque’s 2026 market is shaping up so far.

“I’m very optimistic about it; it feels a little bit more consistent,” Hatcher said. “I was really feeling it when the interest rates were kind of relaxing a little bit, so we’re going to have to see how that shakes out. But generally, it does feel like it’s a little bit healthier.”

Abrazo is on track to increase its production this year, Bishop said, adding the company expects to end the year with up to 275 homes built.

“In general, 2026 has felt like the first normal year since COVID. We really haven’t had a balanced year in a long time, and 2026 kind of feels that way,” Bishop said, citing what he sees as society’s growing capacity for fluctuation and a readiness to buy.

Aguilar agreed, adding people might be more selective, but the need is still there.

“We’ve become so resilient to these changes, I think it’s become the new norm,” Aguilar said. “(The market’s) going to stabilize (and) I think we’re going to have a phenomenal year.”

The one exception, Bishop noted, is the war in Iran and the potential wave of uncertainty a prolonged conflict may cast on the nation’s economy and real estate scene.

“Uncertainty ultimately keeps people from purchasing; they say it’s safer to wait and see what happens than it is to buy,” Bishop said. “It’s still early and so we’re very keenly watching what’s happening, but we’re eager for this thing to be resolved very quickly. I think everybody in real estate would agree.”

With median home prices not likely to come down in the future, Bishop said creativity — with products like build-to-rent communities and housing strategies from local government — will be essential to pushing Albuquerque’s housing market forward and to “meet the market where it is.”

Kylie Garcia covers retail and real estate for the Journal. You can reach her at kgarcia@abqjournal.com.