Cost of Living in Tempe, AZ

An Overview of Cost of Living in Tempe, AZ

Understanding the cost of living in Tempe can help future residents assess whether their current financial situation aligns with the expenses they will encounter. It enables them to plan for potential changes in their budget and lifestyle. The Tempe cost of living index is 112, which is 12% higher than the national average. The cost of living index is calculated by taking into account multiple categories, which encompass both the cost of everyday expenditures and larger expenses as well.

Housing costs are a very significant part of the Tempe cost of living index and generally encompass a large percentage of take-home income. Unfortunately, in this area, the housing costs for both homes and rentals were 47.9% more than the average city. This includes things like home and rent prices, mortgage rates and insurance.

Is Tempe Affordable?

Is Tempe an affordable place to live? That's a valid question to ask when you're thinking about moving to a new city. After all, how much it costs to live somewhere can be a huge factor in your decision. Affordability can be broken down into 3 common categories. The cost of living index (we talked about it earlier), housing expenses and income levels all play a big role in figuring out if a place is affordable. For instance, in Tempe, the median home price is 55.7% higher than what most folks pay across the country, and monthly rent prices are 29.6% higher than the usual rates. Income levels in Tempe come in at $61,290, which is 10.8% higher than the national average.

What Factors can Influence the Cost of Living in Tempe?

Utilities: As with the prices of anything else, utility costs can exhibit significant variations, contingent on factors like climate, energy source availability, geographic location and state regulations. The expenses associated with electricity, water, heating, and waste disposal can fluctuate, either upward or downward, depending on the particular city or state. In Tempe, the utilities index registers 1% lower than the national average.

Subsidies: Some cities and states may extend government subsidies or aid programs aimed at reducing the cost of living for their residents. These initiatives encompass diverse forms of support, including Medicare, Medicaid, housing subsidies, low-income home energy assistance programs, school lunch programs, supplemental nutrition assistance programs, student loans, electric vehicle tax credits, affordable care act subsidies and farm subsidies. Regions with limited subsidy provisions may witness an increase in their overall cost of living.

Groceries: Grocery expenditures have undergone notable escalation over the last 2-3 years. In some markets, the cost of food products has surged by more than 20%, while others have experienced only modest increments. These fluctuations in food costs can have a significant impact on the overall cost of living in any region. In Tempe, the groceries index registers 4.2% higher than the national average.

Where is the Data From?

The Tempe cost of living data displayed above is derived from the C2ER cost of living index to provide a useful and reasonably accurate measure of living cost differences in urban areas. The index takes into account data from 300 independent researches, covering more than 60 goods and services across 6 different categories, to create an overall index for each area, with 100 being the average. The C2ER index does not include sales or income tax rates in their data, however AreaVibes does include both income and sales tax rates in the overall cost of living score for each area.