An Overview of Cost of Living in Phoenix, AZ
Understanding the cost of living in Phoenix 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 Phoenix cost of living index is 106, which is 6% 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.
The cost of living in Phoenix is about average when compared to all other cities across the nation. You can expect that everyday items like food, goods and services and utility bills will be no more expensive than any other average city. Residents can anticipate living expenses that remain in line with the national average, ensuring a manageable financial burden, making it an attractive choice for those seeking affordability without the constraints of higher everyday expenditures.
Housing costs are a very significant part of the Phoenix 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 29.8% more than the average city. This includes things like home and rent prices, mortgage rates and insurance.
What Do Locals Say About the Cost of Living in Phoenix?
Locals have the inside scoop on their city. So, we polled 34 residents in Phoenix to learn how they view the cost of living. We asked how they felt about the cost of living in their area, and if they thought that prices were increasing, decreasing or staying the same. The verdict? 59% find it reasonable with decreasing prices, but 41% think it's quite pricey, with prices that continue to rise.
Is Phoenix Affordable?
Is Phoenix affordable? It's a key consideration when pondering a move, as affordability often shapes your choices. The cost of living index (we discussed it earlier), coupled with housing costs and income levels, serves as the cornerstone for determining a location's affordability. Take Phoenix, for instance, where the median home price falls 35.8% higher than the national average, and monthly rent rates are 15.9% higher than usual. Additionally, median income levels contribute to the equation, with Phoenix flaunting a median household income of $60,914, 10.1% higher than the national norm.
What Factors can Influence the Cost of Living in Phoenix?
Transportation: When public transportation options are limited or non-existent, residents frequently resort to vehicle ownership, which can significantly contribute to the overall cost of living. Monthly financial obligations encompass fuel, insurance, regular maintenance and potentially lease or financing expenses. In Phoenix, the transportation index is 2% higher than the national average.
Healthcare: Healthcare expenses and insurance premiums can vary significantly depending on the specific city or state. Factors such as accessibility to healthcare facilities, out-of-pocket expenses for doctor's visits, dental care expenses, prescription costs and specialized medical care fees can all influence the overall cost of living. In Phoenix, healthcare costs are 6% lower than the national average.
Taxes: Cities that enforce higher taxes, covering both sales taxes and income taxes, can be a factor contributing to a higher cost of living. Paying more in taxes for everyday essentials like clothing and food inevitably leads to higher expenses. A higher income tax rate can further contribute to an overall elevated cost of living. In Phoenix, the baseline sales tax rate begins at 5.6%, and income tax rates start at 2.55%.
Where is the Data From?
The Phoenix 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.
Here are the best places to live in Arizona
10 Best cities in Arizona for employment
These are the 10 most affordable cities in Arizona
Top 10 cities in Arizona with the best education system