Phoenix's cost of living much lower than surrounding suburbs, new study finds

By Mignon A. Gould

Phoenix's cost of living is as much as 65% less than its surrounding suburban enclaves.

The cost to live in Phoenix is $52,951 compared to $56,604 in Tempe, $63,242 in Gilbert and $87,476 in Scottsdale.

That’s according to new research from GOBankingRates analyzing the difference in cost of living in 25 major U.S. cities and their top three suburbs. The study also compares annual expenses to median household incomes to reveal where residents can save the most money. 

The study identified 15 out of the 25 major metros that have lower annual cost of living than nearby suburbs with high livability scores. The other 14 in addition to Phoenix were Los Angeles, Chicago, Dallas, Philadelphia, Boston, San Francisco, Detroit, Minneapolis, Denver, Baltimore, St. Louis, Orlando, Charlotte and San Antonio.

Although Phoenix had the lowest cost of living in relation to its suburban cities, it did not have the most savings opportunities. The capital city, which has a median household income of $77,041, had leftover savings of $24,090 after housing, grocery and other expenses were factored in. It took second place to Gilbert’s median household income of $121,351 and $58,109 in savings. In third place was Tempe with median household income of $77,643 and savings of $21,039. Scottsdale was in last place with a median household income of $107,372 and savings of $19,896.

Phoenix also came in 62.7% lower than Arizona’s average annual cost of living of $86,167. The Grand Canyon State ranked No. 36 for cheapest places to live in the nation. Based on that separate study from GOBankRates, the lowest cost of living index in Arizona was health at 92.7 and the highest was housing at 131.9.

For annual cost of living, Phoenix ranked No. 10 overall out of the 25 major metros. New York City was by far the most expensive, topping the list at No. 1 and Portland, Oregon landed at No. 25.

Despite having one of the lower costs of living in the Valley, Phoenix did not measure up when it came to a best place to retire, according to U.S. News & World Report. For those at retirement age, Surprise got the top nod in the state at No. 83 — the only Arizona location in the top 100 of the 250-city list — based on quality of life, overall value, tax rates, senior population/migration trends and health care. Gilbert was the second best in the state at No. 127.

GOBankingRates researched the U.S. Census 2023 five-year American Community Survey to find the 25 largest metropolitan statistical areas and the difference in cost of living from the most popular major city to the best three suburbs in the area. The qualifying suburbs had at least 5,000 households and were within a metropolitan statistical area but were not named as a principal city. The best suburbs were those with the highest livability index scores, which was sourced from AreaVibes.

Final Thoughts


Phoenix continues to stand out as a smart value play in the Valley, especially when you compare it to nearby suburbs like Scottsdale, Gilbert, and Tempe. Lower overall living costs mean buyers can stretch their housing budget further without giving up access to jobs, amenities, and lifestyle. For first-time buyers, downsizers, or anyone watching monthly expenses, Phoenix offers a compelling balance of affordability and opportunity right now. As prices and costs remain elevated across the metro, knowing where your dollar goes furthest matters more than ever. If you’re weighing Phoenix versus the suburbs, this data is a strong reason to explore what’s available inside the city.