Here’s why a new report ranks Arizona near bottom of list for affordability

PHOENIX – Arizona became one of the nation’s least affordable states as costs soared in the post-pandemic era, according to a new study.

Arizona went from ranking 33rd for affordability in 2019 to ranking 45th in 2025, according to the Common Sense Institute.

“We looked at all 50 states and Washington D.C. and we ranked all of their relative affordability since 2019,” Katie Ratlief, executive director of CSI Arizona, told KTAR News 92.3 FM’s Arizona’s Morning News last week.

CSI released its findings in a report called “The Inflation Hangover: How the Post-Pandemic Price Surge Reshaped Affordability in America.” The rankings were determined by measuring changes in household income relative to essential expenses in seven categories.

Why did Arizona become less affordable?

While costs rose across the board, one category stood out for the states that became less affordable.

“I think the headline from this report is ‘housing, housing, housing,’” Ratlief said.

In fact, the cost of shelter and utilities soared by 60% in Arizona from 2019 to 2025. The only way to change the housing trend is to increase supply, Ratlief said.

“Housing is certainly within state policymakers’ control. There’s a lot that they can do,” she said.

However, officials in some areas are not doing enough.

“We’ve looked at, across the state, how cities are doing in terms of closing their housing gap. Are they building fast enough? Are they approving permits quickly enough to close the gap? And we have some cities and counties in the state who are approving permits so slowly, they will never close their housing gap,” Ratlief said.

Arizonan households earned more, but prices rose faster

Even though Arizonan households made 33% more in 2025 than they did in 2019, according to CSI estimates, it hasn’t been enough to keep pace with the cost of essential expenses.

CSI found that Grand Canyon State households paid $19,300 more for six essential categories — shelter/utilities, groceries, health insurance, car insurance, gas and child care — in 2025 than they did in 2019. That’s nearly $4,000 more than the national average increase.

“We used to be about middle of the pack when it came to affordability, and you hear that from people all the time: ‘I came here because this was an affordable place to live,’” Ratlief said.

Arizonans caught a break in one category, according to CSI.

“The area that we do the best in is taxes. We have a relatively low tax burden here, so citizens get some relief. But we have a long ways to go in order to improve our affordability and gain ground again,” Ratlief said.

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