The Cost of Living in Phoenix

Recently, the Grand Canyon state has seen more and more millennials moving to Phoenix. In fact, Phoenix made the top 10 list of cities with an influx of new residents in 2020.

If you're one of the thousands of people considering a move to Arizona, you'll love this city 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 many rental lists offering smart home features. Another perk: millennials find that the average rent in Phoenix is more affordable than expected.

Compared to national rates, the cost of living in Phoenix is only 3.5 percent higher, a 2.5 percent increase in the last year. Despite that, Phoenix is still one of the more affordable cities in the U.S.

To help you see if moving to this city is your best option, we'll take a look at the true cost of living in Phoenix, which goes way beyond determining the average rent in Phoenix. Following are some of the categories we'll evaluate so you can see if the cost of living in this city really fits into your budget.

housing costs in phoenix

Housing costs in Phoenix

The first area most people look at when trying to determine whether a city fits their budget is the cost of the rent. This is an important category to carefully research as your rental costs will amount to at least 30 percent of your monthly expenses.

The average rent in Phoenix is $1,460 per month for a two-bedroom apartment. This is 15.2 percent lower than in previous years, though it's 17 percent higher than the national average.

According to U.S. News, the lower-than-average rental rates make Phoenix one of the best places to live, as well as one of the fastest-growing cities.

Of course, rental costs are lower or higher depending on the neighborhood in which you choose to live.

For instance, if you move to the Kierland neighborhood, which is close to the best shopping and dining experiences in the city, you'll spend $3,621 per month in rental fees for a two-bedroom apartment. Conversely, if you move to the Melrose Woodlea neighborhood, a quiet, cottage neighborhood in the heart of Phoenix, your monthly rental costs average $1,040.

Average rent prices in cities near Phoenix

Some new residents to the area choose to live in cities near Phoenix that provide a more residential, small-town feel to them. Depending on the city and its amenities, you may find the average rental prices go up or down.

Here are a few examples of the average rent for a two-bedroom apartment in cities near Phoenix:

Home prices in Phoenix

Of the thousands of people moving to Phoenix, many are millennials who aren't in any rush to purchase a home. They're happy renting and taking their time to build a nest egg that they can use as a down payment on a home.

Others want to own their home as quickly as possible because they want to save money on their monthly expenses. A monthly mortgage could cost significantly less depending on the city, neighborhood and amenities you choose.

According to Redfin, the average monthly mortgage cost in the Phoenix metro area is $1,617. This is slightly more expensive than the average rent in Phoenix for a two-bedroom apartment.

The current median home price in Phoenix is just under $400,000, a rise of more than 24 percent over the past year. According to Redfin, the Phoenix housing market is very hot right now, with many homeowners getting multiple offers, which is driving up the sales/list prices by over 2 percent.

Family dinner table in Phoenix, AZ

Food costs in Phoenix

There are so many fun things to do in Phoenix — and going out to eat is one of them! In fact, many consider Phoenix to be a foodie's paradise. In addition to finding restaurants that serve classic fares like breakfast and burgers, you'll also find restaurants that serve international and specialty cuisine including:

  • Vegan and vegetarian
  • Pizza
  • Italian
  • Greek
  • Middle Eastern
  • Thai
  • Cambodian
  • Japanese
  • Mexican
  • Southwest
  • Ethiopian

Phoenix is also famous for its wine bars, breweries and cocktail lounges.

Dining out in Phoenix averages between $17 and $45 per person.

If you're someone that likes to do your own cooking, the overall cost of groceries is 0.8 percent lower than the U.S. average, though some foods are definitely higher than the national average. However, it's important to note that the food/grocery costs in Phoenix are not only significantly lower than other larger cities but making food at home will also save you money in the long run.

For instance, if you purchase a steak at the store for $13.49, you might pay a higher price for the same cut of meat when you go out. Additionally, for some foods like eggs ($1.89; $0.25 more than the national average), milk ($1.68) and chicken ($1.57), you'll be able to make multiple meals with those ingredients. Buy a dozen eggs for $1.89 or go out to breakfast and purchase two eggs for the same price?

Going out to eat from time to time is definitely nice — and often necessary — but you can save a lot of money in the long run by eating in and can contribute to a lower cost of living in Phoenix.

Utility costs in Phoenix

One thing that tends to drive up the cost of living in Phoenix is utilities. These costs can even drive up the average rent in Phoenix if a landlord decides to add paid utilities into their rental package.

The main reason utility fees are so high (6.5 percent higher than the U.S. average) is because of the heat. Summertime in Arizona is not limited to three months as it is in other parts of the country. At a minimum, you'll be living with beautiful sunny days and extra-warm weather for five months out of the year. According to meteorologists, the average temperature in Phoenix in July 2021 was 95.3 degrees.

During the hotter months, most people use more electricity, whether they're using fans or air conditioners to make their living and working conditions more tolerable.

The winter months can see a drastic change in temperature, often dropping to 35 degrees or lower. Obviously, you'll want to use your heater to stay toasty warm during the frigid months.

Because of these extremes, Phoenix utility costs are often double the national average. It's not uncommon to receive an electric bill of nearly $200.

Other utility costs, such as phone bills, are on par with the national average ($182 in Phoenix vs. $187 nationally).

Highway in Phoenix, AZ

Transportation costs in Phoenix

When you're looking for an apartment to rent, don't just look at the average rent in Phoenix. Also, consider the cost of transportation (which in Phoenix is 4.6 percent higher than the U.S. average).

You might pay extremely low rental fees but because you're so far away from public transportation or downtown Phoenix, you might end up paying more each month in transportation costs. You'll have to think about whether you want more of your money going toward a downtown apartment with easy access to amenities and freeways, or if you want it to go toward public transit, gas and parking fees.

You can navigate the city using:

  • Public transportation
  • Charter services
  • Taxis
  • Rental cars
  • zTrip
  • Uber
  • Lyft

The Valley Metro rail can take you to and from downtown Phoenix, as well as to Tempe and Mesa. Valley Metro fare ranges from $1 to $4 depending on where you need to go and whether you're purchasing fare for a single ride or an all-day pass. A five-to-seven-day pass costs approximately $20, while a month pass is $64 for local commutes.

If you choose to commute using your own vehicle, here are some numbers you'll want to consider:

  • The average cost of gasoline is $3 per gallon.
  • Car maintenance fees, such as tire balancing, is slightly less ($51.50) than the national average ($52.40).
  • Parking fees in downtown lots and garages can range from $5 to $20 per day, while on-street metered parking costs approximately $1.50 per hour.

If you're someone who likes to get around on foot or on a bicycle, you'll be happy to know that Phoenix is above average for walkers. The overall walk score for the city (each neighborhood differs) is 54, while the biking score is also above average (63).

Healthcare costs in Phoenix

Healthcare costs will vary depending on your unique needs, the city in which you live and the type of insurance you have (if any).

Overall, the cost of healthcare in Phoenix is 7.3 percent lower than the national average. Let's look at some specifics.

The cost of going to the eye doctor in Phoenix is slightly higher than the U.S. average, while a visit to your doctor or dentist is slightly lower.

  • Optometrist: $127.66 in Phoenix and $105 national average = 19.5 percent higher in Phoenix
  • Doctor: $99 in Phoenix and $112.81 national average = 13.04 percent lower in Phoenix
  • Dentist: $93.50 in Phoenix and $99.44 national average = 6.2 percent lower in Phoenix

Medications vary, as well. Over-the-counter meds like ibuprofen average around $8.39 — slightly lower than the national average of $9.80. Prescription medications are also lower than the national average by 2.3 percent.

Amusement park in Phoenix, AZ

Goods and services costs in Phoenix

When calculating the cost of living in Phoenix, you'll also want to consider the costs of non-essentials. While not as vital as costs like healthcare, utilities and the average rent, these costs are still important.

The types of items that fall into this category are things that you'll do or need to purchase on a somewhat regular basis, like getting a haircut or going to the movies.

For example, the average trip to a salon costs around $40.00 for the basics. Add on color, relaxers, products and services like manicures and pedicures, and you'll pay more. The national average is a couple of dollars cheaper.

If you need to have some of your clothes dry cleaned, you're looking at an average of $11.18 for that service.

How about date night? Let's say you want to get some pizza and go to a movie. You'll pay $19.74 per person in Phoenix. Elsewhere in the U.S., you'll pay an average of $21.61. While the differences might not seem like a lot, they'll definitely add up. And since you live in Phoenix, you can save enough money to feel like you're getting a free date night every so often.

Overall, you'll pay 5.2 percent less on goods and services in Phoenix than the national average.

Taxes in Phoenix

Another important factor in the cost of living in Phoenix is the tax rate. Some states don't have a state income tax, while others don't have a sales tax. How does Phoenix rate?

According to, Arizona has four income tax brackets that range from 2.59 percent to 4.5 percent.

The Arizona Department of Revenue lists the state transaction privilege tax (TPT) rate (or sales tax) at 5.6 percent. So, if you made a $1,000 purchase, you'll pay an additional $56 in sales tax.

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 rental fees. Sticking to this percentage will help you create financial stability, allow you to cover your monthly costs and leave some funds for recreation, sundries and savings.

So, if you're looking for an apartment that costs the average rent in Phoenix ($1,460), you'll spend $17,520 on rent annually. To average spending 30 percent on rent, you'll need to earn $58,400 per year to live comfortably in Phoenix.

According to the U.S. Census Bureau, the average income in Phoenix (according to 2019 figures) is $57,459.

To find out if you can afford the cost of living in Phoenix, check out our free rent calculator.

Understanding the cost of living in Phoenix

Phoenix, the Valley of the Sun, has an incredible combination of great weather, plenty of opportunities to play (sports, shopping, entertainment), 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.

Regardless of whether you want to rent a single-family home in a Phoenix suburb or you want an ultra-sleek smart home apartment in the center of the city, there's a home waiting for you here. Find apartments for rent in Phoenix today!

Cost of living information comes from The Council for Community and Economic Research.
Rent prices are based on a rolling weighted average from Apartment Guide and's multifamily rental property inventory of two-bedroom apartments as of August 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
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Brian CarberryBrian Carberry has more than 15 years of experience as a content creator and award-winning journalist. He is currently the senior managing editor of Apartment Guide and, based in Atlanta. His work has been featured or mentioned by CNN, Wall Street Journal, BuzzFeed, Bankrate and hundreds of local media outlets across the country. In his free time, Brian enjoys sports, cooking (followed by eating) and debating the correct pronunciation of "gif."

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