As Phoenix’s popularity rises, so do the costs of living there. In 2025, the cost of living in Phoenix is rising, particularly felt in housing prices, taxes, and utilities.
You can expect to pay over $1500 a month in rent no matter where you settle down in Phoenix. Whether you’re considering renting or buying, the price tags in this desert and living expenses stack up.
Why Phoenix?
Phoenix, Arizona, has always been a popular destination for people wanting an affordable lifestyle combined with sunny weather, outdoor activities, and a growing economy.
Known for its desert landscapes, vibrant cultural scene, and proximity to outdoor adventures, Phoenix has grown significantly in recent years, attracting new all types of people from across the U.S. and beyond.
Phoenix Lately
In 2025, Phoenix will continue to develop. The downtown area has undergone a revamp, thanks to the local government. New luxury apartments, great trendy restaurants, and tech companies are popping up, making it a new and desirable location for young professionals after college.
Public transportation has also received a major upgrade, with the expansion of the light rail, which makes commuting around the city more efficient and removes the need for a car if you live Downtown.
Phoenix has become a growing hub for tech startups and VC’s, attracting a wave of young start-up founders in the fields of software development, green energy, and digital innovation especially. Whether you’re visiting or settling in, Phoenix in 2025 is a city that’s progressing while maintaining its laid-back, desert charm that locals love. Grab that sunscreen!
1. Rental vs. Buying a Home in Phoenix
When it comes to housing, Phoenix has both affordable rental options and really great financial investment opportunities for buying homes if you have the capital.
However, given the city’s fast growth, the cost of each option has risen over the past few years. The decision to rent or buy depends largely on your long-term goals and budget.
Rental prices in Phoenix have increased in recent years. As of 2025, the average rent for a one-bedroom apartment in Phoenix is $1,400 to $1,600 per month, depending on the neighborhood. Areas such as Downtown Phoenix and Arcadia are higher than this.
For a two-bedroom apartment, expect to pay $1,800 to $2,200 per month in central Phoenix, while the suburbs spots will cost around $1,400 to $1,800. Thanks to all the new job opportunities in Phoenix, renting in Phoenix is steadily becoming more expensive as the population grows.
Renting vs. Buying: Which is More Cost-Effective?
In 2025, the average home price in Phoenix will be $475,000. As more people move to the area, the demand for homes rises, pushing prices higher.
For those looking for a more affordable home, options in the East Valley or West Valley tend to offer lower prices, with homes in the range of $350,000 to $450,000 for a three-bedroom place.
Buying in the Desert Ridge or North Scottsdale areas, which are family favorites, can easily set you back over $600,000. Overall, while Phoenix is cheaper than some other big cities, it is still difficult for first-time buyers to break into the real estate market here.
2. Taxes in Phoenix
When considering a move to Phoenix, factor in the state and local taxes that will impact your overall cost of living. We all love the IRS. While Arizona has no state estate or inheritance tax, its income and property taxes will affect your pocket.
Arizona’s state income tax is progressive, meaning the rate increases as your income does. As of 2025, the tax rates range from 2.59% for income up to $28,000 and to 3.5% for income above those thresholds. The highest tax rate applies to those earning over $350,000 yearly at a rate of 4.5%.
All these numbers might not mean much to you, but you should know that Arizona’s income tax rate is relatively low, making it attractive for people seeking to keep more of their earnings in their pockets and not in the government’s pot.
Phoenix’s property tax rates are on the lower end too with the average property tax rate in Phoenix at 0.6% of the home’s value The sales tax rate in Phoenix is 8.6% (5.6% state sales tax and 3% local tax). When you plan your move all these factors can drastically affect your final take home cut of your pay.
3. Keeping Cool and Comfortable
One of the main factors contributing to your cost of living in Phoenix is the air conditioning needed to survive the hot desert summers. Utility bills change depending on the time of year, the size of your home, and the efficiency of your AC, but overall, they remain relatively reasonable which is surprising to most.
Phoenix is known for its extreme summer heat, where temperatures regularly exceed 100°F and don’t dip back down for months at a time. Air conditioning becomes your best friend during this time, which means higher electricity bills.
In 2025, the average electricity bill in Phoenix is around $150 to $250 per month during the summer for a family of 3, depending on the size of the home and the usage.
Winter heating costs are relatively low in the cooler months because the desert climate cools down but doesn’t require much heating. The average heating bill in the winter months is typically around $100 for most homes.
Many families are switching over to solar options since AZ is the state of the sun. If you can afford the initial high costs of installation you can save big in the long run.
4. AZ Affordable Food Options
Whether you’re cooking at home or enjoying a night out, Phoenix offers many budget-friendly options for residents.
In 2025, the cost of groceries in Phoenix will stay close to the national average. For a family of four, you can expect to spend around $450 to $600 monthly on groceries. Here are the classic store items by price from a major chain grocer:
- Bread: $2.50 to $3.00 per loaf of white bread
- Eggs: $1.80 to $2.50 per dozen
- Cow Milk: $2.50 to $3.00 per gallon
- Fresh produce: Vegetables like spinach, tomatoes, and potatoes generally cost between $1.00 and $3.00 per pound, depending on the season.
Phoenix has an amazing food scene, and eating out is actually affordable even in the city which makes living in Phoenix quite enjoyable.
The local top spots here are debatable but include Tex-Mex, BBQ AZ style, and Southwestern bites, and you can find plenty of food trucks offering cheap fried fresh meals.
I personally love the Southwestern enchiladas you can find at tiny moms and pops restaurants. Try out the local spots you see well-rated on Google Maps to really enjoy your desert foodie scene.
Frequently Asked Questions
What are the average rental prices in Phoenix?
Rental prices in Phoenix in 2025 range from $1,400 to $1,600 for a one-bedroom apartment in the good parts of the city and $1,800 to $2,200 for a two-bedroom apartment in central areas. You can find cheaper options in further out parts.
Is it more expensive to rent or buy a home in Phoenix?
Buying a home in Phoenix may be more expensive upfront but if you can afford it then it offers long-term financial benefits thanks to the low property tax here.
Renting is more flexible but can be higher in the short term, significantly as rental prices increase. Overall homes are going up in value here meaning investing now in a new home is a great way to secure your future.
What is the property tax rate in Phoenix?
Phoenix’s average property tax rate is about 0.6% of a home’s value, which is lower than the national average. This makes AZ a great spot to buy an investment home.
How much do electric bills cost in Phoenix?
In Phoenix, cooling costs during summer can range from $150 to $250 per month or even higher depending on your AC use, while heating costs in winter average around $100 to $150 per month. Make sure to have your AC cleaned often and check your bills for any mistakes.
How affordable is healthcare in Phoenix?
Healthcare in Phoenix is relatively affordable, with health insurance premiums ranging from $350 to $500 per month. It is highly advised to join a health plan if your employer offers one, as hospital bills can add up fast.
Phoenix, Here You Come
Phoenix offers a cost of living in 2025 that is competitive for its size, providing affordable housing, low taxes, and reasonable utility costs despite the need for AC in this hot state. Phoenix continues to be an attractive place for those willing to face the heat in a great urban environment, enjoy year-round sunny weather, and need an affordable lifestyle.
To manage the cost of living in Phoenix, consider renting a property in up-and-coming neighborhoods outside the downtown area, where rent tends to be more affordable. Moving APT knows the best ways around Phoenix and would be proud ot help you save on your moving costs with our professionals.
