Poverty is down in Phoenix but housing is still a struggle
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Metro Phoenix<strong> </strong>maintained a relatively low rate of people living below the <a class="gtmContentClick" data-vars-link-text="poverty line" data-vars-click-url="https://www.axios.com/local/phoenix/2023/09/28/arizona-latino-gdp-report-2023-poverty-rate" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/phoenix/2023/09/28/arizona-latino-gdp-report-2023-poverty-rate" target="_self">poverty line</a> between 2022 and 2023, but <a class="gtmContentClick" data-vars-link-text="high rent and mortgage rates" data-vars-click-url="https://www.axios.com/local/phoenix/2023/05/31/rent-own-housing-phoenix-cheaper" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/phoenix/2023/05/31/rent-own-housing-phoenix-cheaper" target="_self">high rent and mortgage rates</a> kept the squeeze on many household budgets, according to newly released U.S. Census Bureau estimates.
<strong>Why it matters:</strong> The economy — and how people feel about their pocketbooks — is expected to be one of the <a class="gtmContentClick" data-vars-link-text="key issues voters consider" data-vars-click-url="https://www.axios.com/2024/01/14/boom-states-shape-2024-campaign" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2024/01/14/boom-states-shape-2024-campaign" target="_self">key issues voters consider</a> when casting their ballots this November.
<strong>The big picture: </strong>Poverty in metro Phoenix has declined significantly over the past decade.
- About 11% of Valley households made less than the poverty threshold last year, compared to nearly 18% in 2013, per Census data.
<strong>Reality check: </strong>The <a class="gtmContentClick" data-vars-link-text="federal poverty level" data-vars-click-url="https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/prior-hhs-poverty-guidelines-federal-register-references" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines/prior-hhs-poverty-guidelines-federal-register-references" target="_blank">federal poverty level</a> was $14,580 annually for a single person in 2023 (add $5,140 for each additional household member) — but the needed income to afford a one-bedroom apartment in Phoenix is $47,400, an <a class="gtmContentClick" data-vars-link-text="Elliott D. Pollack & Company analysis found last year" data-vars-click-url="https://www.axios.com/local/phoenix/2023/09/01/housing-affordable-phoenix-nurse-police-teacher" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/phoenix/2023/09/01/housing-affordable-phoenix-nurse-police-teacher" target="_self">Elliott D. Pollack &amp; Company analysis found last year</a>.
- So just because metro Phoenix has fewer people living below the poverty line doesn't mean everyone's "fat and happy," ASU economics professor Dennis Hoffman told Axios.
<strong>State of play:</strong> Hoffman said wages have increased significantly over the past decade, which likely explains why more people crossed the poverty line.
<strong>Zoom out:</strong> Statewide, the number of people living below the poverty level has also dropped, but throughout the past decade, it's consistently stayed higher than the metro Phoenix rate.
- Hoffman said this is likely attributable to fewer high- or middle-wage job opportunities in rural parts of the state.
Open embedded content from datawrapper.dwcdn.net<strong>The intrigue:</strong> A household's economic health largely depends on their housing status, Hoffman said.
- Families who locked in low interest rates before <a class="gtmContentClick" data-vars-link-text="home prices spiked in 2020" data-vars-click-url="https://www.axios.com/local/phoenix/2024/07/19/chart-du-jour-home-prices-stay-elevated" data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/local/phoenix/2024/07/19/chart-du-jour-home-prices-stay-elevated" target="_self">home prices spiked in 2020</a> are probably sitting in a pretty comfortable position, while renters and new homeowners struggle, he said.
<strong>Zoom in:</strong> About a quarter of Phoenix renters spent more than half their household income on housing last year, whereas about 10% of homeowners with a mortgage spent that much, per the latest American Community Survey.
- The standard recommendation is to <a class="gtmContentClick" data-vars-link-text="not spend more than 30% of household income" data-vars-click-url="https://www.nerdwallet.com/article/finance/how-much-should-i-spend-on-rent#:~:text=figure%20that%20out.-,How%20much%20should%20you%20spend%20on%20rent?,$1%2C200%20per%20month%20on%20rent." data-vars-content-id="42e1fa99-1866-4288-9949-dfc7eeb26e5f" data-vars-headline="Poverty is down in Phoenix but housing is still a struggle" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nerdwallet.com/article/finance/how-much-should-i-spend-on-rent#:~:text=figure%20that%20out.-,How%20much%20should%20you%20spend%20on%20rent?,$1%2C200%20per%20month%20on%20rent." target="_blank">not spend more than 30% of household income</a> on housing.
<strong>The bottom line:</strong> Economic strength in the Valley largely depends on whether and when a household purchased a home.