Arizona Ranks 7th Least Affordable State in the Nation 

A new report from the Common Sense Institute (CSI), based on federal data and state-level modeling, finds that rising costs for essential household expenses are continuing to strain affordability for Arizona families.

While inflation has eased in recent months, CSI’s analysis shows that the total increase in prices since the pandemic is still outpacing income growth, leaving households in Arizona and across the country with less purchasing power and tighter budgets. In Arizona, where rapid population growth and strong housing demand have driven up the cost of living, the state ranks 7th least affordable in the nation when comparing incomes to the cost of essentials such as housing, groceries, insurance, and child care.

Key Findings

• Arizona ranks 45th nationally in CSI’s affordability rankings.
• After covering taxes and essential costs, Arizona households retain about 19.6% of gross income, roughly $1,700 per month, compared to the national average of 24.7%, or about $2,170 per month.
• Household costs have increased faster in Arizona than nationally. Since 2019, Arizona households have had to spend about $19,300 more per year on essential expenses compared to the national average of $15,400.

Arizona cost increases by category (2019–2025):

• Shelter and utilities: +$9,012
  • Child care: +$3,950
  • Groceries: +$3,375
  • Car insurance: +$1,355
  • Health insurance: +$1,302
  • Gasoline: +$313
• Housing costs remain the largest driver of affordability challenges due to slow permitting and a sharp increase in demand. Shelter and utilities costs in Arizona rose 59% between 2019 and 2025. This was the fourth-largest increase among all states.
• In Arizona, about 38% of one full-time working parent’s income is required to cover child care costs, compared to about 39% nationally.

“Inflation reports may show things are cooling, but that doesn’t mean life is getting more affordable for Arizonans,” said Zachary Milne, Senior Economist at the Common Sense Institute. “Our analysis shows the cost of everyday essentials is still significantly higher than it was before the pandemic, and for many families, incomes haven’t kept pace. That gap is what continues to drive the affordability challenges we’re seeing across Arizona today.”