Arizona is a beautiful state known for its stunning landscapes, warm climate and vibrant culture. Known as the Grand Canyon state, Arizona is a popular destination for tourists and outdoor enthusiasts, but people aren’t just coming to take in the sites. Arizona is also a popular destination for those looking for a new place to call home.
As with any life change, it’s important to have the complete picture before you make any plans. Those contemplating a move need to know about more than sunny days and mild winters, starting with what it costs to live in Arizona. While the question is simple, the answer depends on a great number of factors.
The average cost of living in Arizona can vary significantly depending on where you live and your lifestyle. For example, retirees will have different costs to weigh than those with children. This article will explore the cost of various aspects of life in the sun-filled state, from housing and transportation to food and taxes.
Keep reading to learn how far your dollar will stretch in Arizona.
What Is The Cost Of Living In Arizona?
The cost of living is usually people’s top concern when considering a big move. As with any state, Arizona’s average cost of living fluctuates based on many factors, including lifestyle preferences and whether you live in an urban or rural area. The good news is that Arizona has a variety of locations that provide a mix of opportunity and affordability.
The Cost Of Living In Arizona’s Largest Cities
Arizona offers a unique blend of urban and rural areas. With bustling metropolitan cities and quaint small towns, Arizona has something that appeals to various lifestyles and preferences. Each of these areas has its distinct vibe and offers different attractions, entertainment and transportation options.
Let’s look at the cost of living within several popular large Arizona cities and the average costs state-wide in key areas like transportation, taxes and food.
The cost of living in Phoenix, Arizona
The city of Phoenix had a population of 1,624,569 as of 2021 and is the 14th fastest-growing city in the United States. The greater Phoenix area boasted a much larger population of 4,946,145 in 2021. With clear blue skies and sun-filled days, it’s easy to see why it is such a popular destination. But what about the costs associated with living in the sun-soaked valley?
The median cost to buy a home in Phoenix is around $398,899, which is higher than the national median. The median rent for all property types comes in at $1,999 per month and is currently starting to decrease.
The cost of living in Tucson, Arizona
Surrounded by magnificent mountains, Tucson is the second largest city in Arizona. With a population of 543,242 as of 2021, Tucson is a thriving city full of entertainment, art, culture and business. What can you expect regarding the cost of living if you want to hang your hat in the city fondly referred to as Old Pueblo? The average cost to buy a home in Tucson is $310,000 as of January 2023.
The median rent, regardless of property type, currently comes in at $1,600 per month. While housing costs are higher than the national average, they are trending downward.
The cost of living in Prescott and Sedona
Prescott, Arizona is not a large city, with just over 42,000 people calling it home in 2023. Sedona, Arizona is even smaller with a population of under 10,000. While it is easy to think that smaller towns always have a lower cost of living, that is not always the case. Both of these areas have a significantly higher cost of living due to several factors, including their appeal as tourist destinations.
Sedona, for example, is considered a tourist destination and attracts outdoor lovers and spiritual seekers from around the nation. It is also cooler in the summer than other areas of the state and has more than its fair share of picturesque mountains. The cost of housing in Sedona is 88% higher than the national average, with higher costs for groceries, healthcare and transportation.
Prescott is a historic town with “Old west” roots, with historical sites from Arizona’s earliest days. The weather is dramatically different from the larger cities to the south, so much so that the yearly snow Prescott receives has earned it the nickname “Arizona’s Christmas City.” The cost to live in this idyllic town is 44% higher than the national average.
Transportation Costs In Arizona
The state of Arizona has a unique blend of urban areas and small towns, with more than a few ghost towns in the mix as well. Transportation between these locations requires a car, with options like light rail, street cars and shuttles being available within larger localities.
In Phoenix, transportation expenses like bus fares and gas prices are 6% higher than the national average. In Tucson, similar transportation expenses are 7% higher. Transportation also costs between 10% to 13% higher in Prescott, Sedona and Flagstaff.
Personal vehicles are the most popular way to get around town and see the state’s sites. Before you hit the road, you can expect to pay an average of $3.67 per gallon when filling up. While the cost of gas fluctuates significantly, this is higher than the national average of $3.39 per gallon.
Local, State, Property Taxes And Fees In Arizona
No conversation about the cost of living would be complete without talking about taxes. Arizona has relatively low property taxes, which average 0.51% of the assessed home value, which is lower than the national average. Since state property taxes are based on the county where the property is located, some areas have higher assessed values and taxes.
Income taxes have recently undergone significant changes in Arizona. The first change collapsed the multi-tiered state income tax brackets into just two, which apply to 2022 income. In 2023 a flat tax of 2.5% takes place, effectively lowering taxes for most residents.
Arizona has a 5.6% sales tax, but there are some exceptions. For instance, prescription medicine is not taxed, and some cities do not tax foods (Phoenix, Tucson and Mesa) while other cities do. This further illustrates the importance of taking a closer look at the specific area you’re interested in relocating to better understand the cost of living.
Arizona Food Costs
Food costs are up across the nation, with the average annual food prices being 11.4% higher in 2022 than in 2021, according to the United States Department of Agriculture (USDA). And while food costs change by location, even in Arizona’s largest city of Phoenix, food costs were just 11.4%, which aligns with the national average of 12.2%.
Some areas in Arizona where your grocery bill may be higher than expected. For instance, Tucson’s food costs are 4% higher than the national average. The highest food costs come from Flagstaff and Sedona, which are 10% higher than the national average.
Other Expenses To Consider In Arizona
There are many considerations to consider when determining the affordability of any move. Here are a few additional costs you may be curious about:
- Home insurance will cost you around $1,599, slightly lower than the national average of $1,784. This varies based on the property value and other factors.
- Auto insurance is climbing nationwide, but Arizona drivers currently pay about $204 less than the national average. Your age, car, driving record and other factors play into this expense.
- Childcare costs account for around 17.60% of a household’s income in 2021, with costs rising nationwide.
- Vehicle registration fees are nominal, but an annual Vehicle License Tax is 60% of the manufacturer’s base retail price, reduced by 16.25% yearly starting from the first year it was registered in the state.
Learn More About The Arizona Home Buying Process
Arizona is a diverse and beautiful state full of history, interesting sites to see and fun things to do. If you want to make the Grand Canyon state your home, start by determining which area you want to live in. This will let you hone in on the average costs for fundamentals like housing, transportation and groceries. From there, you can create a more comprehensive view of how far your dollar will go and how much house you can afford.
But remember, costs are important, but they are only part of the picture. Arizona is a fantastic place to call home, which is why it is consistently growing. So when you’re ready to explore buying a house in Arizona, we’ll be here to help.
If you’re interested in learning more about the intricacies of the Arizona homebuying process, check out a few of our recent articles:
- What Is the Average Down Payment in Arizona?: Saving up for a down payment is one of the first steps in the homebuying journey. Learn more about the average down payment on a house in Arizona and more.
- How Much Is Mortgage Insurance in Arizona?: Mortgage insurance is required when you put less than 20% down on a conventional loan. Learn about Arizona mortgage insurance and about how much PMI is in Arizona.
- Conforming (Conventional) Loan Limits For Arizona: Conventional loans help homebuyers by making home ownership dreams a reality. Learn what to expect, including conforming loan limits in Arizona.
