Denver vs Phoenix: cost of living compared
Phoenix is 20% cheaper than Denver overall. State income tax tops out around 2.5% in AZ vs 4.4% in CO.
Indexes use a US average of 100: below 100 is cheaper than the national average. Housing and transportation are derived from median home prices, rents and commute times; figures come from BLS, Census ACS, Numbeo and the MIT Living Wage Calculator.
The big picture
Moving between Denver and Phoenix means a noticeable shift in your overall cost of living. Denver generally presents a significantly higher cost burden than Phoenix. This difference is primarily driven by housing expenses, which are substantially greater in the Mile High City. While other categories show some variation, housing stands out as the main factor contributing to Denver's elevated cost profile compared to the Valley of the Sun.
Housing
Housing costs are a major differentiator. Both buying a home and renting a one-bedroom apartment are considerably more expensive in Denver than in Phoenix. Denver's housing stock often includes a mix of older and newer construction, with a strong demand for properties. Phoenix, known for its sprawling development, offers a wider range of newer homes and generally lower property values, making homeownership and renting more accessible.
Taxes and everyday costs
Daily expenses vary across categories. State income tax is notably lower in Arizona. Transportation costs are roughly similar, though Phoenix is a car-dependent metro. Food and healthcare expenses are somewhat higher in Denver, while utilities, particularly for cooling, can be more expensive in Phoenix. Miscellaneous goods and services also tend to be pricier in Denver, contributing to higher day-to-day spending.
Lifestyle trade-offs
These metros offer distinct lifestyles. Denver, nestled against the Rocky Mountains, experiences four distinct seasons, including significant snowfall, and offers abundant outdoor recreation. Phoenix, in the Sonoran Desert, is known for its hot, dry summers and mild winters. Both are car-centric, with similar average commute times. Denver has a slightly more urban feel in its core, while Phoenix is more spread out.
Bottom line
For households considering a move, the financial impact is substantial. A move to Phoenix generally means a much more affordable cost of living, primarily due to significantly lower housing expenses and a more favorable state income tax. While some utility costs might be higher in Phoenix, the overall budget relief, especially in housing, makes it a considerably less expensive place to live compared to Denver.
| Measure | Denver, CO | Phoenix, AZ |
|---|---|---|
| Overall cost of living (US avg = 100) | 128 | 102 |
| Housing index | 146 | 105 |
| Transportation index | 104 | 100 |
| Food index | 105 | 96 |
| Healthcare index | 108 | 98 |
| Utilities index | 98 | 112 |
| Misc index | 108 | 92 |
| Median home price | $548,000 | $388,000 |
| Median 1-bedroom rent | $1,950/mo | $1,450/mo |
| Average commute | 28 min | 28 min |
Compare any two metros with the free cost of living tool, or see the true monthly cost of a specific Phoenix home with the True Cost Calculator.