Phoenix's cost of living exceeds national average, but not by much
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The cost of living in Phoenix is higher than the national average, though not by much and by less than some other Valley cities.
The big picture: The cost of goods and services in Phoenix is just under 2 points higher than the national average, according to the Council for Community and Economic Research's cost-of-living index, which is designed to measure "regional differences," Axios' Alex Fitzpatrick and Kavya Beheraj report.
- Of the 269 urban areas in the index, Phoenix was the 81st most expensive.
- Lake Havasu City was the most expensive of the seven Arizona cities in the index, at 23 points above the national average, while Bullhead City was the least, at 6.5 points below.
- Surprise, Gilbert, Prescott and Flagstaff also rated as more expensive than Phoenix.
How it works: An index value of 100 represents the national average cost of living across 269 cities.
- If a city has a value over 100, its cost of living is higher than average; under 100 is lower than average.
- The composite index is based on prices for groceries, health care, housing, transportation, utilities and miscellaneous goods and services.
Zoom in: Unsurprisingly, the category in which Phoenix had the highest costs was housing, at 12 points above the national average.
- That gave Phoenix the 56th highest housing costs of the cities in the index.
- A lack of supply has helped drive up housing prices in the Valley, where sky-high growth rates have historically been fueled, at least partly, by low housing costs.
- Groceries were nearly 5 points above average, and transportation was roughly 4 points higher.
Yes, but: Phoenix had below-average costs for health care and utilities.
Between the lines: While the most expensive cities tended to be on the coasts, Phoenix was part of a trend that saw above-average costs across the Mountain West.
Zoom out: Among cities with more than 100,000 residents, Honolulu (179.2), San Jose (171.3) and San Francisco (169.5) had the country's highest relative cost of living as of the third quarter of 2023.
- Residents of McAllen, Texas (80.2); Augusta, Georgia (82.8); and Amarillo, Texas (84.4) enjoyed the lowest cost of living.
- The index separated New York into its individual boroughs, and Manhattan topped the list at nearly 128 points above average, about 49 points ahead of second-place Honolulu.
The bottom line: Each quarter, the Council for Community and Economic Research assembles a cost-of-living index designed to measure "regional differences in the cost of consumer goods and services."
- The result: A snapshot in time useful for comparing relative costs across cities.