Arizona’s cost of living rose above national average for first time, new report finds
The setting sun shines over a Phoenix residential neighborhood. Photo by Jimmy Conover/Unsplash
Arizona’s historically low cost of living rose above the national average for the first time in 2023, according to a new report released today that also noted the state’s homelessness population in 2024 topped 14,000 for the second straight year. This included a 15% increase in the number of families with children.
According to “The State of Housing in Arizona,” the average price of rental housing and utilities in Arizona exceeded the national average for the third time in as many years, by 8.6% in 2023, while home purchases in the state declined by 22% during the same year. The 60-page report was unveiled at the Arizona State University Morrison Institute for Public Policy’s Housing and Water Policy Summit.
The report follows one released in 2024. Both were produced by the Arizona Research Center for Housing and Economic Solutions, or ARCHES, a consortium of over 24 researchers at Arizona’s three public universities and the University of New Mexico. ARCHES is based at the Morrison Institute, part of ASU’s Watts College of Public Service and Community Solutions.
Alison Cook-Davis, Morrison’s director of research and ARCHES co-director, said increasing costs to buy or rent housing continue to contribute to high numbers of families without a place to live, even those with steady employment.
“What many people often don’t realize is large numbers of people experiencing homelessness have jobs,” Cook-Davis said. “It is the increased rental costs that impact both increasing evictions and the number of people without homes. While the good news is that there have been increases in new home construction, we will have to see if this translates into greater affordability.”
Home prices continue upward trend
In 2010, a typical Arizona home cost 2.8 times the state’s median homeowner income, Cook-Davis said. That number had risen to 4.6 times in 2023.
Meanwhile, Arizona renters have seen monthly rents rise 23% between 2019 and 2024, while household incomes are only up 4% during the same period, adjusted for inflation, Cook-Davis said.
Housing costs traditionally drive much of the overall cost of living, and Arizona’s housing costs have risen above the national average before, she said. But this time, continued hikes in housing costs have driven the state’s overall cost of living to 1.1% above the national average as well.
Migration into Arizona continues to increase, Cook-Davis said, although at lower rates than in the recent past. In 2023, the percentage of Arizona residential sales to out-of-state buyers returned to pre-pandemic levels after a surge during the COVID-19 pandemic of 2020–21.
Key findings
The new report examines trends including population, housing stock and the housing market, homeownership, rental housing and homelessness. It also outlines 2024 policy and highlights current local and state efforts to address housing challenges.
“Arizona continues to face challenges with housing accessibility and affordability,” the researchers said in the report’s executive summary. “While housing development has increased, demand continues to outpace housing growth. Housing costs continue to outpace earnings, increasing the percentage of cost-burdened households. Eviction rates and homelessness continue to rise while housing remains a priority for local and state policymakers.”
Among the report’s key findings:
- Arizona’s cost of living surpassed the national average for the first time.
- Annual new home construction continues to outpace that of the years prior to the COVID-19 pandemic.
- High home prices and mortgage rates may be driving a decrease in home purchases.
- A record number of eviction filings evidenced continued challenges to affordable rentals.
- Homelessness continued at high levels.
- State and local governments are focused on creative solutions to housing shortages.
The report concluded that Arizona’s future prosperity relies on addressing its housing needs as it grows, ages and diversifies.
“Meeting the challenges of the current housing market is essential for supporting economic mobility and health among Arizona’s communities,” the report’s conclusion stated. “Through collective efforts and policy action, these challenges can be combated with strategies that enhance housing supply and provide affordable and attainable housing to help Arizonans thrive.”
Andrea Whitsett, the Morrison Institute’s executive director, said the report will be a valuable asset.
“This trusted report is a go-to resource for seeking timely credible housing data,” Whitsett said. “With new ARCHES research spotlights and supplemental county-level data, ARCHES provides an even more robust set of decision-support tools to strengthen and inform Arizona’s efforts to advance policies that increase housing access and affordability.”
Research leading to the report’s findings was supported by funding from the U.S. Department of Housing and Urban Development. Additional funding was provided by PNC Bank, Chicanos Por La Causa, the Garcia Family Foundation, Gorman & Company and the Local Initiatives Support Corp., Phoenix.
ARCHES researchers’ expertise lies in several fields of study, including urban planning, policy, architecture, geographical sciences, political science, economics and real estate.
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