Learn About the Cost of Living in Tucson, Arizona MSA

How are we doing?

The cost of living in the Tucson Metropolitan Statistical Area (MSA) was 3.1% below the national average in 2024, ranking Tucson fourth among peer western MSAs. The cost of living varied widely across the 12 comparison MSAs, with San Diego reporting a cost of living 11.9% above the U.S., while El Paso was 10.1% below. Tucson experienced modest inflation between 2009 and 2021, averaging 1.2% annually. Arizona reported a similar average of 1.1%. Inflation accelerated sharply in 2022, reaching 7.7% in Tucson and 10.3% statewide. While inflation moderated in 2024, rates remained above the 2009-2021 average, with Tucson at 4.7% and Arizona at 2.6%.

Why is it important?

The cost of living is measured by Regional Price Parities (RPPs), which compare prices and living expenses across states and MSAs for a wide variety of items, including housing, food, and healthcare. The cost-of-living measure compares how expensive it is to live in one city or state versus another, helping to assess the cost of maintaining a similar standard of living across locations. Cost-of-living differences are important when evaluating wages, household income, economic competitiveness, and quality of life. A region with lower living costs may allow households to maintain a similar standard of living with less income than would be required in a higher-cost area. Tracking inflation is also important because rising prices can reduce purchasing power over time, particularly when wage growth does not keep pace with the rising cost of living.

How do we compare?

Data on the cost of living can be grouped into four major categories: Goods, Housing, Other Services, and Utilities. In 2024, Tucson’s overall cost of living was 3.1% below the national average, while housing costs were 8.2% below the national average. The Housing category includes housing costs for both homeowners and renters. The Goods category includes typical consumer purchases of tangible items such as groceries, clothing, and vehicles. In 2024, goods prices in Tucson were 3.8% below the national average. The cost of Other Services was nearly identical to the national average, at 0.2% below the U.S. average. Utility costs were substantially lower, 10.5% below the national average. Other Services include items such as legal, healthcare, and recreational services.

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What are the key trends?

The Implicit Regional Price Deflator measures the rate of inflation over time. Inflation in the Tucson MSA remained relatively modest between 2009 and 2021, averaging 1.2% annually. During this period, most years recorded inflation rates below 3%. Inflation accelerated sharply in 2022, reaching 7.7% in Tucson and 10.3% statewide. Inflation moderated in subsequent years, declining to 5.1% in Tucson in 2023 and 4.7% in 2024. Arizona followed a similar pattern, with inflation falling to 4.6% in 2023 and 2.6% in 2024. Despite the decline, inflation remained above the long-term average observed between 2009 and 2021.

How is it measured?

The Bureau of Economic Analysis (BEA) ) calculates Regional Price Parities (RPPs) using data collected for the Consumer Price Index, along with rent data and owner equivalent costs collected from the Census Bureau’s American Community Survey. Major expenditure categories include housing, goods, utilities, and other services. Expenditure weights are constructed using data from the BLS Consumer Expenditure Survey and BEA Personal Consumption Expenditures. RPPs are indices that allow prices to be compared across regions and are expressed relative to the national average, which equals 100 in each year. The Implicit Regional Price Deflator uses the same data but is adjusted to track price changes over time within a region.