This Popular Retirement Mecca Beat California And New York For The Title Of America's Most Expensive State In 2025
When naming the most exorbitantly priced living arrangements in the United States, the preposterously priced housing in Los Angeles or the costly island living in Hawaii tend to top the list. The third most expensive has surprisingly been named as Arizona. It would seem that Arizona has now taken the dubious honor of being the most expensive state to reside in in the country. But without featuring a majorly expensive vacation destination like Duck Key in Florida, why does the state still top the list?
Most of the blame for the state's exceedingly high price tag comes from simply trying to stay cool under the Southwestern sun. In Surprise, Arizona, a town of 143,000 people, the total energy bill for each household is nearly three times that of Monroe, Louisiana. And because a lot of former California residents have now been priced out of that state, they have fled to all the available homes in Arizona, causing the housing market to skyrocket. The result is that one-third of Arizonians pay 30% of their entire household income to simply keep a roof over their head and beat the heat.
Cost of living in Arizona has been steadily increasing
The cost of living in Arizona has been following this disheartening trend for some time now. A study from InBusiness in 2024 revealed that Arizona had the fourth lowest "purchasing power" in the country, with lower scores indicating the most expensive with the least disposable income after adjusting for cost of living. Arizona's annual disposable income came out to a measly $55,333, which is 2.9% lower than the national average. With its reputation as a retiree state, some of the more budget-conscious folks in that category might do well to steer clear of famously expensive cities like Scottsdale, but also lesser-known cities like Chino Valley and Anthem, whose annual costs of living are $60,016 and $63,221, respectively.
All of this has turned savvy potential homebuyers away from areas in the country like the Southwest and onto more realistic terrain like the South and the Midwest. Last year, the thriving border town of McAllen, Texas, was named as having the lowest cost of living. States like South Dakota and South Carolina have seen an increase in their populations in recent years, and given the abundance of natural beauty in those states, coupled with lower housing costs, it's easy to see why.