Is It Cheaper to Live in Arizona or Texas?

When considering a change of residence, understanding the financial implications of different locations is important. This analysis compares general expenses in Arizona and Texas, providing insights into how daily costs and financial obligations may vary between these areas.

Housing Costs

Housing costs represent a substantial portion of living expenses, with significant differences between Arizona and Texas. For homeownership, median home prices vary considerably across major metropolitan areas. In Arizona, the median sold price for a single-family home in Phoenix was approximately $480,000 in 2024, with median listing prices around $495,000 by July 2025. Tucson generally presents a more affordable homeownership market, with median single-family home sales prices around $373,000 in 2024. Overall, the average home value in Phoenix was approximately $411,916 in 2025, while in Tucson it stood at about $330,455.

In Texas, housing prices in its largest cities present a mixed picture. Dallas saw median listing home prices of about $439,000 in February 2024, with median close prices ranging from $403,040 to $411,695 during 2024. Houston’s median home prices are generally lower than Dallas, while Austin tends to be the most expensive major city for home purchases in Texas. San Antonio offers a more accessible entry point for homeowners, with median home prices around $305,800 in March 2024. This indicates that while Texas has some higher-priced markets, it also provides more budget-friendly options.

For renters, the landscape also shows variations. In Phoenix, median rents were around $1,367 in July 2024, with one-bedroom apartments averaging $1,172. More recent data from August 2025 indicates average rents in Phoenix at approximately $1,320. Tucson’s rental market is comparatively more affordable, showing median rents of about $1,089 in November 2024. By July 2024, Tucson’s median rent was $1,100.

Across Texas, rental costs in major cities fluctuate. Houston’s median rental price for apartments was around $1,379 in February 2024. Austin generally has higher rental costs, with average rents around $1,440 in July 2024. San Antonio remains a more affordable rental market, with average rents around $1,091 in July 2024. Dallas rental prices often fall between Houston and Austin.

The variations in both home purchase prices and rental rates highlight the importance of specific location within each state. While Arizona’s major cities, particularly Phoenix, can present higher housing costs, Tucson offers a more moderate alternative. Texas, with its larger number of major metropolitan areas, provides a broader spectrum of housing affordability, from higher costs in Austin and Dallas to more budget-friendly options in Houston and San Antonio.

Daily Living Expenses

Beyond housing, everyday costs significantly influence overall affordability. These expenses encompass utilities, groceries, transportation, and healthcare, each presenting different considerations in Arizona and Texas.

Utility costs in both states can be substantial, particularly due to climate-related energy demands. In Arizona, average monthly utility expenses are around $408. Electricity bills, especially in Phoenix, can average between $164 and $248 per month, increasing significantly during hot summer months. In Texas, the average monthly utility bill typically ranges from $377 to $460. Average electricity costs in Texas generally fall between $150 and $235 per month. Natural gas bills in Texas average around $55-$110 per month, while internet services typically cost $58-$90 monthly in both states.

Grocery expenses are a consistent part of any budget. In Arizona, the average monthly grocery and food cost per person is approximately $279. Phoenix’s grocery costs are slightly below the national average. Texas residents can expect to spend an average of about $289 per person per month on groceries and food.

Transportation costs, including fuel and vehicle insurance, are also factors. Annual transportation expenses in Arizona typically range from $5,316 to $15,073. Car insurance premiums in Arizona vary, with full coverage averaging from $118 to $254 per month. Texas generally sees annual transportation costs between $5,477 and $15,530. Full coverage car insurance in Texas averages between $150 and $292 per month.

Healthcare expenditures represent another notable category. In Arizona, the average annual per-person healthcare cost is around $6,828. Monthly health insurance premiums average about $433 to $577. Texas has slightly lower average annual healthcare costs at approximately $6,593 per person. However, average monthly health insurance premiums in Texas can range from $500 to $610.

Tax Burdens

The tax structures in Arizona and Texas present distinct financial landscapes for residents, particularly concerning income, sales, and property taxes. Understanding these differences is essential for evaluating the total cost of living in either state.

Regarding state income tax, Arizona levies a flat individual income tax rate of 2.50%. In contrast, Texas does not impose an individual state income tax, which can be an advantage for wage earners and retirees.

Sales tax rates also vary. Arizona has a state sales tax rate of 5.6%. When local sales taxes are included, the combined rate can range from 5.6% to as high as 11.2%, with an average combined rate of 8.38%. Texas has a state sales tax rate of 6.25%, with local jurisdictions able to add up to 2%, resulting in a maximum combined rate of 8.25%. The average combined state and local sales tax rate in Texas is 8.20%.

Property taxes represent a significant divergence in the overall tax burden. Arizona generally has relatively low property tax rates, with the average effective property tax rate ranging from approximately 0.51% to 0.61%. This results in a median annual property tax bill of around $1,666 to $1,800 for homeowners.

Conversely, Texas is recognized for having some of the highest property tax rates in the nation. The average effective property tax rate in Texas is significantly higher, typically ranging from 1.63% to 1.8%. This translates to a median annual property tax bill of approximately $3,872 to $3,971. These taxes are primarily levied by local entities, including school districts, counties, and cities.

Economic Landscape and Income

The economic environment and earning potential are important considerations when evaluating a location’s overall affordability. Both Arizona and Texas possess diverse economies, but they differ in their primary industries and income levels.

Median household incomes in Arizona were approximately $76,872 in 2023, with average annual salaries around $53,444 in August 2025. Major industries driving Arizona’s economy include manufacturing, particularly in electronics and aerospace, alongside a strong presence in mining, tourism, healthcare, and information technology.

Texas exhibits a slightly higher median household income, at about $76,292 in 2023, while average annual salaries are close to $52,885 as of August 2025. The Texas economy is largely fueled by the energy sector, encompassing oil, natural gas, and wind power, alongside significant contributions from advanced manufacturing, information technology, and professional services. Texas also boasts a large workforce, ranking second in the U.S. for employment.

Childcare costs represent a substantial expense for families in both states. In Arizona, infant care averages around $14,040 annually, while Texas childcare can range from $6,000 to $22,800 per year, depending on the child’s age and type of care.

Vehicle registration fees also add to annual expenses. In Arizona, these fees include an $8.00 registration fee, a $4.00 title fee, and a Vehicle License Tax (VLT) calculated based on the vehicle’s assessed value and depreciation. Texas charges a standard $50.75 for cars and light trucks, with additional local and processing fees that can bring the total to around $80-$90.