PHOENIX — Arizona, long considered an affordable place to live, has crossed a new threshold: its cost of living has now surpassed the national average, largely due to rising housing expenses, according to a new report.
The Arizona Research Center for Housing and Economic Solutions (ARCHES) released its annual State of Housing in Arizona Report this month, revealing how soaring rents and home prices are reshaping affordability and displacing more families across the state.
“It’s kind of a first for Arizona because we’re known to be such an affordable state,” said Alison Cook-Davis, Research Director at the ASU Morrison Institute for Public Policy.
The findings show that while 22% of homeowners are considered cost-burdened—spending more than 30% of their income on housing—the impact is far greater for renters. A majority of 54% of renters statewide fall into the cost-burdened category, highlighting the depth of Arizona’s affordability crisis.
“I think that is significant because we’re also seeing other trends that track with this increased cost,” Cook-Davis noted.
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Those trends include record levels of eviction and homelessness in 2024, adding pressure on communities and social service agencies. The report also emphasized the disconnect between wages and housing costs.
Researchers pointed out that in Arizona’s five largest occupational categories—office support, sales, food service, transportation, and management—four out of five median wages were not high enough to cover the cost of a modest one- or two-bedroom apartment at current market rates.
“What this is just showing us is the dire need, especially for housing at the median income levels,” Cook-Davis said.
Despite the affordability challenges, there are signs of progress. Housing construction surged in 2023, reaching record levels, and many local governments have allocated millions of dollars toward new affordable housing developments.
“Everyone is trying to sort of use the best information they have to address it in their own communities,” Cook-Davis added.
The report underscores a growing divide in Arizona’s housing market: while new construction signals opportunity, the lag between rising wages and housing costs means more households are at risk of being priced out. Advocates say policymakers will need to prioritize both short-term relief measures—such as rental assistance and eviction prevention programs—and long-term solutions, including zoning reform, affordable housing incentives, and investment in workforce housing, to curb the crisis.
Originally reported by Lillian Donahue in ABC 15 News.
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