The Grand Canyon State has long been one of the most desirable places to live in the country over the past few decades. It has beautiful nature and diverse ecosystems, plus sunshine all year-round. There are abundant entertainment options, thriving arts and culture, and convenient access to destinations like Nevada, Mexico and California. Whether you already live in the state or are considering moving, you may wonder how much to buy a house in Arizona.
The cost of living in Arizona will depend on various factors, including which city or town you live in, what type of house you own, mortgage rates from lenders and other details. If you’re entering the homebuying process in Arizona, here’s a general idea of what to expect for an average home cost in Arizona.
Location Greatly Influences The Home Price
Like any state, base property prices in Arizona will vary depending on location. Even within a city, home prices may vary widely depending on the type of home you’re moving into, how old it is, where it’s located and other factors.
The state of Arizona has a few major geographic hubs. Surrounding the capital city of Phoenix, the state’s largest city, are other big cities, including Mesa, Chandler, Gilbert, Glendale, Scottsdale, Peoria, Tempe, Surprise and San Tan Valley. This central geographic area is known as “The Valley.”
Down south in the state resides Arizona’s second-largest city, Tucson. Up north is Flagstaff, which is a short drive away from Sedona and Las Vegas. Tucson and Flagstaff are home to state universities and large college student populations, which is something to consider when purchasing property.
Using data from Redfin, a residential real estate brokerage that lists properties up for sale, the following were average home prices in these three distinct areas of Arizona as of December 2022.
- Average cost of a home in Phoenix, Arizona: $410,000
- Average home cost in Tucson, AZ: $300,000
- Average cost of a home in Flagstaff, AZ: $549,000
Overall, the state of Arizona has a much lower average home price compared to some other states in the country, such as California, New York and Hawaii. It’s also more expensive than some states, particularly compared to states in the Midwest.
Redfin reports the median sales price of homes throughout the U.S. in December 2022 was $388,310. Arizona ranked in the top five states homebuyers were searching to move to between October 2022 and December 2022. The high demand for housing in Arizona may have contributed to the 1.3% year-over-year increase in the median sale price in 2022.
Down Payment And Closing Costs
Again, like in any state, your down payment requirements and closing costs will largely depend on the type of mortgage you get for your home. For how much down payment for a house in Arizona, you may be able to pay as little as 3% down with a conventional mortgage from Arizona Central Credit Union or 3.5% down with a Federal Housing Administration (FHA) loan. That would equal $12,300 for 3% down on a $410,000 home in Phoenix or $14,350 for a $410,000 home.
To avoid paying private mortgage insurance (PMI), you’ll typically need to pay at least 20% for a down payment with a traditional mortgage. For the same average home in Phoenix, a 20% down payment equates to $82,000.
Closing costs in Arizona, which are the expenses and fees homebuyers pay to complete the purchase, generally range between 2% and 5% of the mortgage. For the same average $410,000 home in Phoenix, those costs would equate to $8,200 to $20,500.
Arizona is also considered an “escrow state,” which means an escrow agent oversees real estate transactions. Arizona escrow fees are typically calculated by charging $2 for every $1,000 of the home’s purchase price. This means that the same Phoenix house costing $410,000 would require an $820 escrow fee. Additionally, fees may be added to the escrow fee.
Consider A Down Payment Assistance Program
There are many paths to homeownership, whatever your unique financial situation is. In addition to low down payment loans, there are various down payment assistance programs in Arizona that can help you offset some of the costs associated with purchasing a home.
Arizona Central Credit Union offers two helpful programs:
- Home in Five Program: The Home in Five Program is available to Maricopa County (Phoenix-area) residents with a household income of less than $112,784. It helps people who are purchasing a single-family home, condominium or townhouse that will be used as their primary residence. The program provides down payment assistance in the form of a grant for 4% of the home’s purchase price. First responders, K-12 teachers, U.S. military personnel, and veterans may qualify for an additional 1% down payment assistance.
- WISH Down Payment Program: The WISH Down Payment program is open to all Arizona residents, regardless of their county. The program offers eligible low- and moderate-income households 4-to-1 matching grants of up to $22,000 for a home purchase. To qualify, you must be a first-time homebuyer. The money can be used toward closing costs or towards a down payment.
Create an account to learn about your eligibility for these programs. You can also research Arizona state and local resources and nonprofit organizations to get assistance with a down payment toward a home purchase.
For example, the Home Plus program, administered by the Arizona Industrial Development Authority, offers a 30-year, fixed-rate mortgage and up to 5% in down payment assistance. To qualify, homebuyer households must make $122,100 per year or less. This program is open to all homebuyers throughout Arizona, including those who aren’t first-time homebuyers.
Secure Home Financing Through Arizona Central Credit Union
For many people, purchasing a home is one of the biggest investments they’ll ever make. A home can provide shelter, a comfortable place to live and a valuable financial asset. Whatever your financial situation is, you may have options to purchase a home in Arizona.
To learn how much home you can afford, visit our mortgages page. There, you can prequalify for a mortgage, compare mortgage options and more.
