B-
12%
Overall NAT. AVG.
9%
Goods & Services NAT. AVG.
48%
Housing NAT. AVG.
Search Homes for Sale
Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.
The cost of living index is based on a national average of 100. For example, if the cost of living is 90, then it is 10% lower than average. If the cost of living is 110, then it is 10% higher than average. The breakdown for each index is as follows: goods & services (33%), groceries (13%), health care (5%), housing (30%), transportation (9%) and utilities (10%). If the cost of living data was unavailable for this city, estimates based upon nearby cities were used.
Index Tempe Arizona National
Cost of living112101100
Goods & Services91104100
Groceries104102100
Health care9494100
Housing14897100
Transportation102106100
Utilities9995100

An Overview of Cost of Living in Tempe, AZ

Understanding the cost of living in Tempe can help future residents assess whether their current financial situation aligns with the expenses they will encounter. It enables them to plan for potential changes in their budget and lifestyle. The Tempe cost of living index is 112, which is 12% higher than the national average. The cost of living index is calculated by taking into account multiple categories, which encompass both the cost of everyday expenditures and larger expenses as well.

Housing costs are a very significant part of the Tempe cost of living index and generally encompass a large percentage of take-home income. Unfortunately, in this area, the housing costs for both homes and rentals were 47.9% more than the average city. This includes things like home and rent prices, mortgage rates and insurance.

Is Tempe Affordable?

Is Tempe an affordable place to live? That's a valid question to ask when you're thinking about moving to a new city. After all, how much it costs to live somewhere can be a huge factor in your decision. Affordability can be broken down into 3 common categories. The cost of living index (we talked about it earlier), housing expenses and income levels all play a big role in figuring out if a place is affordable. For instance, in Tempe, the median home price is 55.7% higher than what most folks pay across the country, and monthly rent prices are 29.6% higher than the usual rates. Income levels in Tempe come in at $61,290, which is 10.8% higher than the national average.

What Factors can Influence the Cost of Living in Tempe?

Utilities: As with the prices of anything else, utility costs can exhibit significant variations, contingent on factors like climate, energy source availability, geographic location and state regulations. The expenses associated with electricity, water, heating, and waste disposal can fluctuate, either upward or downward, depending on the particular city or state. In Tempe, the utilities index registers 1% lower than the national average.

Subsidies: Some cities and states may extend government subsidies or aid programs aimed at reducing the cost of living for their residents. These initiatives encompass diverse forms of support, including Medicare, Medicaid, housing subsidies, low-income home energy assistance programs, school lunch programs, supplemental nutrition assistance programs, student loans, electric vehicle tax credits, affordable care act subsidies and farm subsidies. Regions with limited subsidy provisions may witness an increase in their overall cost of living.

Groceries: Grocery expenditures have undergone notable escalation over the last 2-3 years. In some markets, the cost of food products has surged by more than 20%, while others have experienced only modest increments. These fluctuations in food costs can have a significant impact on the overall cost of living in any region. In Tempe, the groceries index registers 4.2% higher than the national average.

Where is the Data From?

The Tempe cost of living data displayed above is derived from the C2ER cost of living index to provide a useful and reasonably accurate measure of living cost differences in urban areas. The index takes into account data from 300 independent researches, covering more than 60 goods and services across 6 different categories, to create an overall index for each area, with 100 being the average. The C2ER index does not include sales or income tax rates in their data, however AreaVibes does include both income and sales tax rates in the overall cost of living score for each area.

New Real Estate Listings in Tempe Area
Search Homes for Sale in Tempe, AZ

Cost Of Living Quick Facts

  • The cost of living in Tempe is 11% higher than the Arizona average
  • The cost of living in Tempe is 12% higher than the national average
  • Tempe housing is 48% higher than the national average
  • Arizona general sales tax is 10% higher than the national average
  • Arizona state income tax is 13% higher than the national average

Most Affordable Places to Live in and Around Tempe

See all the best places to live around Tempe

Compare Tempe, AZ Cost of Living

      vs
      How would you rate the cost of living in Tempe?
      Write a review to give others more information about this area.
      Is the cost of living increasing or decreasing in Tempe?
      Write a review to give others more information about this area.
      See all Tempe poll results

      Salary Calculator

      This is how much you would need to earn in
      Price difference in compared to
      Cost of living index
      Goods & Services index
      Groceries index
      Health care index
      Housing index
      Transportation index
      Utilities index

      Median Income & Debt-To-Income Ratio

      Median Income Per Year Per Month Max Budget (28% DTI) Max Budget (36% DTI)
      Owners$90,543$7,545$2,113$2,717
      Renters$48,261$4,022$1,126$1,448
      The affordability of the housing market in Tempe, AZ as well as the overall cost of living can be predicted by what percent of the monthly income is spent on housing related costs. This is konwn as the debt-to-income ratio (DTI). The overall rule of thumb is that no more than 28% of your gross income should be spent on the overall costs related to housing and no more than 36% of gross income on all expenses and debts. Among Tempe homeowners, the median income is $90,543. This indicates that a monthly maximum of $2,113 should be spent by homeowners on all housing related costs. Renters have a median income of $48,261. This indicates that renters would have a maximum of $1,126 for their rent related monthly costs.

      Arizona Sales Tax

      State General Sales Tax With Max Surtax
      Arizona 5.6% 10.725%

      Arizona Income Tax

      State Income Tax (Low) Income Tax (High)
      Arizona 2.55% 2.98%

      Goods & Services

      Item Tempe National avg. Difference
      Haircut $18.21$24.2624.9%
      Beauty Salon $55.83$45.5622.5%
      Toothpaste $3.54$3.704.3%
      Shampoo $1.32$1.283.3%
      Movie $9.71$12.1320.0%
      Bowling $21.97$18.0022.1%

      Groceries

      Item Tempe National avg. Difference
      Ground Beef $6.17$5.845.6%
      Fried Chicken $1.41$1.5710.4%
      Milk $4.78$4.672.4%
      Potatoes $4.60$4.936.8%
      Pizza $12.12$12.090.2%
      Beer $11.51$10.4110.6%

      Health Care

      Item Tempe National avg. Difference
      Optometrist $107.63$125.6814.4%
      Doctor $99.00$135.7827.1%
      Dentist $120.50$113.296.4%
      Ibuprofen $11.04$10.653.6%
      Lipitor $486.38$468.603.8%

      Housing

      Item Tempe National avg. Difference
      Home Price $287,600.00$184,700.0055.7%
      Avg. Mortgage Payment $2,561.11$2,346.699.1%
      Apartment Rent $1,230.00$949.0029.6%

      Transportation

      Item Tempe National avg. Difference
      Gasoline $3.54$3.462.3%
      Tire Balancing $60.83$59.921.5%

      Utilities

      Item Tempe National avg. Difference
      All Electricity $193.93$193.990.0%
      Phone $186.48$192.253.0%
      Although the cost of living data is updated regularly, this cost of living information is to be used as estimates only as prices can change on an ongoing basis.

      Nearby cities with low cost of living

      City Population Cost of Living Index National Avg.
      Santa Cruz, AZ57963.7%
      Komatke, AZ8858911.0%
      Guadalupe, AZ6,5729010.4%
      Maricopa Colony, AZ8181022.0%
      Gila Crossing, AZ659945.6%
      Tempe, AZ191,60711211.8%

      Cities with similar population

      City Population Cost of Living Index National Avg.
      McKinney, TX191,19712928.6%
      Tallahassee, FL192,8851010.6%
      Paradise, NV193,1501065.9%
      Mobile, AL189,994909.6%
      Shreveport, LA189,890937.1%
      Tempe, AZ191,60711211.8%
      Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.