Deciding whether to rent or buy a home is one of the biggest financial challenges you’ll face. Either way, you may be faced with high monthly payments, but how much of a difference in costs is there in the Arizona real estate market? Whether you’re currently focused on short-term savings goals or long-term financial stability, the decision to rent or buy depends on several factors.

The Arizona real estate market has seen significant growth in recent years, especially in major cities like Phoenix, Tucson and Scottsdale. Home prices have increased due to population growth, low interest rates and a strong economy. However, the market varies widely across the state, with some areas offering more affordable options for fixed-rate mortgages or homeowners insurance than others.

What Renting vs. Buying Involves

Renting in Arizona can be less expensive in the short term because the upfront costs are lower compared to the costs of buying. Renters typically pay a security deposit as well as first and last month’s rent, but avoid the significant down payment and closing costs associated with a home purchase. Additionally, renting offers predictable monthly expenses because renters are not responsible for property taxes, repairs or maintenance.

Buying a home in Arizona requires a significant initial investment, including a down payment, closing costs, and any upfront repairs or renovations. Monthly mortgage payments may be higher than rent, but they help build equity in the property. Homeowners also benefit from potential tax advantages, such as deductions on mortgage interest and when paying property taxes.

GOBankingRates recently conducted a study to determine the cost difference between renting and buying based on factors such as general cost of living, median household income, average home value, mortgage payments, or rental costs. Here are the key findings from these seven major cities in Arizona.

Curious to see what it looks like in other regions? Here are the costs of renting and buying in each state.