Cost of Living in Arizona
Dreaming of moving to Arizona? From the allure of the Phoenix Suns to the mystical Sedona vortexes and the awe-inspiring Grand Canyon, the state has plenty to offer. However, before you trade snow boots for flip-flops, it’s crucial to understand the cost of living in Arizona. This guide will break down the expenses, helping you make an informed decision about your move.
The Average Cost of Living in Arizona:
Despite its desert location, Arizona’s overall affordability compares closely with the national average. While some cities like Bullhead City are 8% below the national average, others like Lake Havasu City are 31% above. The state’s cost of living is just 6% above the national average.
Breakdown by Category:
- Total: Arizona 106, U.S. 100
- Housing: Arizona 117, U.S. 100
- Utilities: Arizona 103, U.S. 100
- Groceries: Arizona 104, U.S. 100
- Transportation: Arizona 98, U.S. 100
- Health Care: Arizona 98, U.S. 100
- Miscellaneous: Arizona 103, U.S. 100
Housing Costs in Arizona:
As of early 2022, the median home price in Arizona was approximately $470,500, nearly 20% higher than the national median. Monthly rent for a two-bedroom apartment was about 18% higher than the national average. While some cities exhibit substantial differences (e.g., Yuma being 18% lower than the national average, and Lake Havasu City 82% higher), most popular destinations in Arizona align closely with the national average.
Handling Housing Costs:
Whether you choose to rent or buy, ensure that your monthly housing payment remains within a fourth of your take-home pay. This includes principal, interest, property taxes, insurance, private mortgage insurance (PMI), and HOA fees if applicable. Explore various home prices using a mortgage calculator, and consider a 15-year fixed-rate conventional loan for a quicker payoff.
Utilities:
Arizonans tend to pay slightly more for utilities compared to the national average, given the extreme temperatures. Costs vary significantly by city, ranging from 13% lower than the national average in Bullhead City to 32% higher in Surprise. Flagstaff, however, falls about 6.3% below the national average.
Groceries:
Grocery prices in Arizona generally align with the national average, except for Lake Havasu City, which is about 20% higher. Phoenix, Yuma, and Tucson usually see grocery bills within 3% of the U.S. average, making it manageable for most residents.
Transportation:
Transportation costs, including gas prices and car maintenance, are about 2% lower in Arizona compared to the rest of the U.S. Costs range from 10% lower than the national average in Lake Havasu City to 7% higher in Flagstaff.
Health Care:
Health care costs in Arizona vary, with Surprise being 20% lower than the national average and Flagstaff 8% higher. Lake Havasu City falls around the national average, offering reasonable health care expenses for residents.
Taxes:
Arizona’s income taxes are on the lower end, ranging from 2.59% to 4.5%. However, the state has a sales tax rate of 5.6% (or 8.4% with local taxes included), making it the 11th highest in the country.
Miscellaneous Goods and Services:
These costs encompass a wide range of items and services. They range from 14% lower than the national average in Bullhead City to 22% higher in Lake Havasu City. Yuma represents most Arizona cities, sitting just 0.5% above the national average.
Conclusion:
With a thorough understanding of the cost of living in Arizona, you’re well-equipped to make an informed decision about your move. Use this guide to assess whether Arizona’s expenses align with your budget, and consider adjustments or alternatives if needed. Happy planning!