Phoenix, Arizona, has been a popular destination for many seeking a new place to call home. A few years ago, the cost of living in Phoenix was considerably lower than in most other states. However, things have changed, and the cost of living has seen a significant increase. In this informative blog, we will delve into various aspects of the cost of living in the Phoenix metropolitan area. From housing and utilities to entertainment and transportation, we will provide you with a comprehensive overview to help you better understand the financial aspects of living in this vibrant city.
Housing Costs
One of the most noticeable increases in the cost of living in Phoenix has been in housing and rent. In 2020, housing costs jumped by 22%, and in 2021, another 22% increase was recorded. If you purchased a home for $400,000 in 2020, it would now be worth $600,000, demonstrating the rapid surge in home prices. However, there was a slight price drop of about 10% in June 2022 due to rising mortgage rates. As a result, the housing index for Arizona rose to 122, making it 22% higher than the national average. In fact, only 11 states have higher housing prices than Arizona.
For apartment rentals, the average cost for a 1200 to 1500 square foot single-family home is around $2,250 per month, excluding utilities. If you’re considering purchasing a home in this size range, it would be around $375,000. Larger homes, between 3000 to 3500 square feet, have a rental cost of about $3,867 per month, with a purchase price of approximately $860,000.
When it comes to homeownership, it’s important to factor in additional costs like home insurance, HOA dues, lawn care, pool maintenance, and pest control. Home insurance can range from $800 to $1,200 annually. HOA dues vary but typically fall within the $30 to $120 per month range. These fees often contribute to community amenities and maintenance.
Utilities
Utilities are a significant part of the cost of living. Internet services in Phoenix can cost around $50 per month for an unlimited plan. Natural gas bills vary, with a potential increase during the winter months, sometimes reaching up to $120. Electric bills, particularly in summer, can be substantial, with costs ranging from $113 to $655 per month depending on the size and efficiency of your home.
Transportation
Phoenix does not have an extensive public transportation system, making car ownership almost a necessity. The state’s transportation index is 105, reflecting the cost of vehicle registration. Newer cars and more expensive vehicles come with higher registration fees. For example, a brand-new $50,000 car in 2023 will have a registration fee of $440, while a used $30,000 car from the same year will have a $280 fee. Gasoline prices have increased in recent years, currently hovering around $4.50 per gallon. Public transportation options are limited, so having a car is essential for getting around.
Entertainment
A night out in Phoenix can be enjoyable, but it comes at a cost. Comedy clubs, a popular choice for a night out, typically charge around $25 per person with a two-drink minimum. Dining at a decent restaurant can cost $16 or more for an entree, with some high-end options going up to $20 or more. Pizza options range from $10 at chains to $20-25 at local pizzerias. When it comes to fitness, gym memberships can start at $10 per month and go up to $180 per month for specialized fitness programs. Extravagant fitness services can cost even more.
