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.

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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.

Phoenix

• Population: 1,609,456

• Median household income: 72,092 USD

• Average property value: 431,906 USD

• Average monthly expenses: 2,071 USD

• Average monthly mortgage payments: $2,557

• Average monthly rent: $1,739

• Monthly living expenses for homeowners: $4,629

• Monthly living expenses for tenants: $3,810

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Tucson

• Population: 541,033

• Median household income: 52,049 USD

• Average property value: 334,925 USD

• Average monthly expenses: $1,890

• Average monthly mortgage payments: 1,983 USD

• Average monthly rent: $1,540

• Monthly living expenses for homeowners: $3,873

• Monthly living expenses for tenants: 3,429 USD

Consider this: The 5 worst cities in California to buy property in the next 5 years, according to real estate agents

Table Mountain

• Population: 503,390

• Median household income: $73,766

• Average property value: 443,952 USD

• Average monthly expenses: $2,042

• Average monthly mortgage payments: $2,629

• Average monthly rent: $1,708

• Monthly living expenses for homeowners: $4,670

• Monthly living expenses for tenants: $3,750

Chandler

• Population: 275,618

• Median household income: 99,374 USD

• Average property value: 534,200 USD

• Average monthly expenses: $2,044

• Average monthly mortgage payments: 3,163 USD

• Average monthly rent: 2,035 USD

• Monthly living expenses for homeowners: 5,207 USD

• Monthly living expenses for tenants: $4,079

Gilbert

• Population: 267,267

• Median household income: 115,179 USD

• Average property value: 584,424 USD

• Average monthly expenses: $2,076

• Average monthly mortgage payments: 3,461 USD

• Average monthly rent: $2,200

• Monthly living expenses for homeowners: 5,537 USD

• Monthly living expenses for tenants: $4,276

Attention: According to real estate agents, these are the 3 best cities in Florida to buy property in the next 5 years

Glendale

• Population: 248,083

• Median household income: 66,375 USD

• Average property value: 419,081 USD

• Average monthly expenses: $2,087

• Average monthly mortgage payments: 2,482 USD

• Average monthly rent: $1,739

• Monthly living expenses for homeowners: $4,569

• Monthly living expenses for tenants: 3,826 USD

Scottsdale

• Population: 240,537

• Median household income: 104,197 USD

• Average property value: $830,727

• Average monthly expenses: $2,052

• Average monthly mortgage payments: 4,919 USD

• Average monthly rent: $2,135

• Monthly living expenses for homeowners: 6,971 USD

• Monthly living expenses for tenants: $4,187

^{Methodology: For this study, GOBankingRates determined the average cost of living for homeowners and renters in the 100 most populous cities in the U.S. First, GOBankingRates determined the 100 most populous cities based on the U.S. Census American Community Survey. For each city, several factors were determined including total population, total number of households, median household income, all based on the U.S. Census American Community Survey. Cost of living indices were obtained from Sperling’s BestPlaces and the nationwide average expenses for all residents were used based on the U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey for all residents. Single-family home value was obtained from the Zillow Home Value Index and assuming a 10% down payment and using the nationwide average 30-year fixed mortgage interest rate based on the Federal Reserve Economic Data, the average mortgage rate can be calculated. The average rental cost was obtained for each city from the Zillow Observed Rental Index. The average rental cost and average mortgage cost can be used along with the average expense cost to calculate the total cost of living for renters and homeowners. Cities were sorted by order from least expensive to most expensive, then sorted by total population to show the cost of living for homeowners and renters in the 100 cities with the highest population. All data was collected as of July 15, 2024 and is current.}

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This article originally appeared on GOBankingRates.com: Renting vs. Buying Real Estate: See the Cost Difference in 7 Arizona Cities