As housing costs put more strain on Arizonans’ budgets, the state’s overall cost of living has risen above the U.S. average for the first time. Those are some of the findings from a new report from Arizona State University’s Morrison Institute for Public Policy and the University of Arizona’s Drachman Institute.
The latest State of Housing in Arizona report from the Arizona Research Center for Housing Equity and Sustainability says in 2023, Arizona’s average costs for goods and services surpassed the national average for the first time since the federal government began compiling that data in 2010. Arizona’s costs are now about 1.1% above the average.
“This is largely driven by housing costs,” said Alison Cook-Davis, one of the report’s authors.
The higher cost of living comes with societal consequences. The report says as housing costs in the state continue to outpace wage growth, Arizona is seeing an increase in cost-burdened households, a record number of eviction filings, and record levels of homelessness.
At the root of the problem is a supply and demand imbalance, the report says. The number of households in Arizona has grown by 25% since 2010, while the number of homes has increased just 14% in that time. That gap is wider in Arizona than in many other states.
Construction in Arizona has picked up pace in the last few years, Cook-Davis said, but she said it hasn’t been enough to significantly bring down rent prices.
“If we don’t continue the pace of building and don’t continue to build more housing, we are going to be even worse off in the future,” Cook-Davis said.
The report notes the state Legislature and some municipalities have recently adopted more policies aimed at accelerating construction and lowering housing costs. The state Legislature, for example, passed laws in 2024 to require cities to allow more construction of casitas and duplexes. And the city of Phoenix this year established a new housing trust fund.
But Cook-Davis said it’s too soon to measure the impacts of those actions.
“It really is kind of a ‘’wait and see’ on how much this will push additional supply,” Cook-Davis said. “You can’t just flip a switch and build a house the next day. It does take time.”
