Minneapolis vs Phoenix: cost of living compared
Phoenix is 6% cheaper than Minneapolis overall. State income tax tops out around 2.5% in AZ vs 7.05% in MN.
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
Comparing overall expenses, Phoenix generally presents a somewhat lower cost of living than Minneapolis. This difference is largely driven by housing costs, which are noticeably higher in Phoenix. However, other categories like groceries, healthcare, and miscellaneous goods and services tend to be more affordable in Phoenix, helping to balance the overall picture. Utilities in Phoenix are somewhat more expensive, while transportation costs are roughly similar between the two metros.
Housing
Housing costs show a significant difference, with Minneapolis offering more affordable options for homeownership. The median home price in Minneapolis is considerably lower than in Phoenix. For renters, however, the median cost for a one-bedroom apartment is roughly similar in both cities. Minneapolis typically features a mix of older, established homes and newer developments, while Phoenix often has a newer housing stock with many master-planned communities.
Taxes and everyday costs
Daily expenses vary. Phoenix benefits from a significantly lower state income tax rate compared to Minneapolis. Groceries and healthcare expenses are generally lower in Phoenix, while utilities, especially for cooling, can be somewhat higher. Transportation costs are quite similar, with average commute times being nearly identical. Miscellaneous goods and services are also a bit more affordable in Phoenix.
Lifestyle trade-offs
Beyond costs, the metros offer distinct lifestyles. Minneapolis experiences four distinct seasons, including cold, snowy winters, and has a strong focus on outdoor activities around its many lakes. Phoenix is known for its hot, dry desert climate with abundant sunshine year-round. Both cities are car-dependent, though Minneapolis has a more developed public transit system. Phoenix offers a sprawling, often newer urban landscape, while Minneapolis has a more established, denser core.
Bottom line
For those considering a move, the financial impact depends heavily on housing choices. While Phoenix has a lower overall cost of living index and more favorable income tax, its higher home prices could be a major factor. Conversely, Minneapolis offers more affordable homeownership but has higher costs in several other categories and a higher state income tax. Renting costs are comparable, so the decision may hinge on homeownership aspirations and climate preferences.
| Measure | Minneapolis, MN | Phoenix, AZ |
|---|---|---|
| Overall cost of living (US avg = 100) | 108 | 102 |
| Housing index | 94 | 105 |
| Transportation index | 98 | 100 |
| Food index | 102 | 96 |
| Healthcare index | 105 | 98 |
| Utilities index | 108 | 112 |
| Misc index | 98 | 92 |
| Median home price | $328,000 | $388,000 |
| Median 1-bedroom rent | $1,450/mo | $1,450/mo |
| Average commute | 27 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.