Poverty is down in Phoenix but housing is still a struggle
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Metro Phoenix maintained a relatively low rate of people living below the poverty line between 2022 and 2023, but high rent and mortgage rates kept the squeeze on many household budgets, according to newly released U.S. Census Bureau estimates.
Why it matters: The economy — and how people feel about their pocketbooks — is expected to be one of the key issues voters consider when casting their ballots this November.
The big picture: 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.
Reality check: The federal poverty level 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 Elliott D. Pollack & Company analysis found last year.
- 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.
State of play: Hoffman said wages have increased significantly over the past decade, which likely explains why more people crossed the poverty line.
Zoom out: 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.
The intrigue: A household's economic health largely depends on their housing status, Hoffman said.
- Families who locked in low interest rates before home prices spiked in 2020 are probably sitting in a pretty comfortable position, while renters and new homeowners struggle, he said.
Zoom in: 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 not spend more than 30% of household income on housing.
The bottom line: Economic strength in the Valley largely depends on whether and when a household purchased a home.