The incident unfolded near Dove Valley Road and Interstate 17.
Footage taken by a resident nearby the scene showed the balloon catching on a light pole before collapsing on the ground.
No-one initially appeared to be injured, Phoenix Fire officials said.
Witness Kara Giugliano told Fox News: “I’m used to seeing hot air balloons right outside this window, which I thought was really cool… This one was right outside. The basket was just above the light post.”