If you’re one of the thousands of people considering a move to Arizona, you’ll love Phoenix for its temperate weather, top-tier universities and state-of-the-art venues for sports and entertainment.
You’ll also love that Phoenix is on the cutting edge of the tech world, with a real estate market prepared for growth and many job opportunities. Another perk: the cost of living in the city is only 4.2 percent above the national average. This makes Phoenix more affordable than other major cities in the West, including San Francisco (84.2 percent above) and Seattle (50.7 percent above).
Although San Francisco tops the charts on the Pacific coast, Phoenix’s cost of living aligns more closely with nearby towns like Colorado Springs, CO; Tucson, AZ, and Orem, UT.
To help you see if moving to Phoenix is your best option, we’ll take a look at the cost of living index through its parts. With all this economic research, you can see if the cost of living in this great metropolitan area really fits into your budget.
- Housing costs
- Food prices
- Utility costs
- Transportation costs
- Healthcare costs
- Goods and services costs
- Tax rates
- How much do you need to earn to live in Phoenix?
Phoenix housing prices
The first area most people look at when trying to determine whether a city fits their budget is housing costs. Across Phoenix, housing prices are 14.4 percent above the national average, a 1.4 increase over last year.
When it comes to actual rents, estimates show prices are moving up at a pretty decent rate. Although two-bedroom apartments are seeing a 23 percent increase, one-beds are up 22 percent. This puts the price of rent between the two units pretty close together when it comes to rental expenses. Living in a one-bedroom carries an average monthly cost of $1,424, while a two-bedroom hits at $1,664.
For those looking at home prices, the median sale price in Phoenix is $440,000. This is an increase of 11.5 percent over last year. As far as time a new home stays on the market, the average length is just shy of a month, at 21 days.
Estimated monthly costs of living in Phoenix
So many Phoenix neighborhoods offer appealing amenities that entice renters, but the top concern is always the price. Your home has to fit within your cost of living index, making it a balancing act between home prices and quality of life.
For those with a higher budget, one of the best places to look at is Roosevelt. This historic neighborhood is right alongside downtown and is a local gem. One-bedroom apartments here average out to cost $2,500 a month.
Another popular area with a variety of housing options, culture, shopping and nightlife, Camelback East gives you plenty of pluses with a lower rent cost. Here, one-bedrooms rent for an average of $1,375 per month.
If saving a little more on rent appeals to you and the cost of living in Phoenix, check out the community of South Mountain. Here one-beds rent for $975 a month on average. This family-friendly neighborhood is in a great location with good schools and a growing community. This is one of many affordable communities in Phoenix.
Phoenix food prices
Many locals consider Phoenix a foodie’s paradise when compared to other large cities. In addition to finding spots that serve classic fares like breakfast, burgers and that famous Sonoran Dog, you’ll also find restaurants that serve international and specialty cuisine.
Dining out in this part of Arizona can vary based on what kind of experience you’re looking for. A single person can grab a cheap meal for around $17, or a couple can get away with a three-course meal for two for around $65.
If you’re someone that likes to cook, the overall price of groceries is 0.1 percent lower than the national average. Compared to other cities, this is a very reasonable expense. Even down in Tucson, you’ll pay 4.9 above to complete your grocery list.
This impacts your cost of living in Phoenix for food by keeping the most common items you’d buy at the store in a reasonable space. Living here, you can expect to pay around $2.04 for a half gallon of milk, $3.50 for a loaf of bread and $5.68 per pound for ground beef.
Phoenix utility prices
With its desert location, one thing that tends to drive up the cost of living in Phoenix is utilities.
The main reason utility fees are 2.3 percent above the national average is mostly the heat. Summertime in Arizona is much longer than three months, and it’s hot — triple-digit hot. During the hotter months, most people use more electricity, whether they’re running fans or air conditioners to make living and working conditions more tolerable.
This contributes to an average electricity bill of $186.18 per month. Thankfully, there’s a winter season to help cool things down.
Phoenix transportation prices
When you’re looking for an apartment to rent in the city, you also need to consider transportation expenses. Living in Phoenix, these costs are 8.2 percent above the national average, an increase of 6.2 percent over last year.
With rising costs, most likely linked to car ownership, you may want to consider public transportation as an alternative.
The Valley Metro rail offers services via rail, bus and streetcar. Riding can significantly reduce commute time if you face a lot of car traffic, and an extensive list of routes makes it easy to access the city via a less stressful form of transportation. Using public transportation is also a great way to familiarize yourself with a new city.
A one-way fare is $2 for local bus and light rail trips. You can buy a single-day pass for $4 and a pass good for 31 days for $64. Other pass options are also available. The street car is currently free to ride, but that rate expires after its first year of operation. After that, you’ll just pay $1 per way.
Navigating Phoenix on foot or by bicycle
If you’re someone who likes to get around on foot or on a bicycle, you’ll like to know that Phoenix has above-average scores for walkers. This doesn’t mean everywhere is amenable to foot traffic, but many areas are. The overall walk score for the city is 54.
The biking score is also pretty fair, for those who prefer this mode of transportation, at 63.
Using a bike (or your feet) to get around is a great way to lower your cost of living.
Phoenix healthcare prices
Living in Phoenix gives you access to some great healthcare facilities. While overall costs will vary by person depending on need and the type of insurance you have, your expenses in this category are 0.2 percent above the national average.
Location will dictate actual money spent, but an average doctor’s visit, for example, is $99. Seeing a dentist means paying around the same price, but a trip to the eye doctor can cost you around $120.50.
This expense ends up being a lot less costly when compared to other major cities around the country.
Phoenix goods and services prices
Beyond the basic necessities, you have goods and services. These are monthly budget items you enjoy paying money for, but don’t necessarily need. Whether they involve food, entertainment, personal grooming or even a trip to the dry cleaners, the cost of living for this category can quickly add up.
Overall, though, these prices are actually 3.8 percent below the national average. That bodes well for your social life.
To look at individual costs in this area:
- A pizza has an average cost of $12.46
- A movie ticket has an average cost of $9.25
- A haircut has an average cost of $17.00
- A trip to the dry cleaners has an average cost of $13.70
To splurge, consider combining the pizza and movie ticket costs for a chill date night, or if money gets tight, postpone that trip to the cleaners as long as you can.
There are definitely ways to keep goods and services in your cost of living budget, you may just have to get creative as you adjust to a new city.
Taxes in Phoenix
Another important factor in the cost of living in Phoenix is the tax rate. This includes both the income tax you’ll pay annually and the sales taxes you pay every time you shop. If you own a home, property taxes are yet another that factor into your cost of living calculator.
When it comes to sales tax, Arizona, as a state, has a rate of 5.6 percent. Localities are able to add to this total, bringing the sales tax in Phoenix to 8.6 percent. This impacts your cost of living, since every time you buy clothes, furniture or even electronics you pay taxes. For every $1,000 you spend, $86 goes straight there.
Although Phoenix’s sales tax is more than in nearby cities like Scottsdale, it’s actually less than in Tucson, which is up to 8.7 percent.
Arizona has four income tax brackets that range from 2.59 percent to 4.5 percent. Your salary will dictate which bracket you fall into.
How much do you need to earn to live in Phoenix?
Experts across the board recommend spending no more than 30 percent of your monthly income on the cost of the rent. Sticking to this percentage will help you create financial stability, allow you to cover your monthly expense and leave some of your salary for recreation, sundries and savings.
So, if you’re looking for a one-bed apartment at the standard rent of $1,450, you’ll need to earn an income of $58,000 per year to live a comfortable life in Phoenix. This is perfectly plausible given that the median salary in Phoenix is $60,914.
To get specific with your own expenses and income, and see if you can afford the cost of living in Phoenix, check out our free rent calculator.
Living in Phoenix
Phoenix, the Valley of the Sun, has an incredible combination of great weather, beautiful country, a thriving job market and an affordable cost of living. It’s one of the most desirable cities for millennials and retirees alike to set down roots.
With this ideal location, though, comes expenses. To know if what you can afford is reasonable here, grab that cost of living calculator, and start looking at those numbers.
