Arizona’s economy has always been built on the backs of five key industries: Copper, cotton, cattle, climate, and citrus. Today, Arizona produces more copper than any other state in the US and is also one of the top five cotton-producing states. And with its 300 days of sunshine and iconic landmarks like the Grand Canyon, Arizona continues to be a popular destination for tourists and snowbirds. However, like the rest of the country, Arizona was hard hit by the pandemic last year. According to one measure, Arizona ranked 22nd for an average credit card balance of $5,157.
Arizona Consumer Debt
According to the latest Household Debt report from the Federal Reserve, the following is a breakdown of the average consumer debt in Arizona by type.
Total household debt: $41,390
- Mortgage: $40,000
- Student Loans: $5,410
- Credit card debt: $5,157
- Auto loans: $5,480
According to figures released by the state of Arizona, bankruptcy filings have decreased by over 20% from last year. 12,900 people filed for bankruptcy compared to 16,933 the previous year.
Arizona’s employment and income
In a right-to-work state like Arizona, employees are legally allowed to decline union membership and avoid paying dues. This means that if someone is already a member of a union and wants to resign, they cannot be fired as a result of their resignation.
In Arizona, employment is considered to be at-will, which means that either the employer or the employee can end the relationship at any time and for any reason. It’s important to keep this in mind when thinking about employment, as it is not guaranteed to be a long-term arrangement.
There are many factors that contribute to job security and salary protection, but two of the most important ones are flexibility and opportunity. Arizona workers have both of those factors working in their favor, but they also have less job and salary security. That’s why it’s important for workers to be proactive about securing raises and protections in case they are let go.
Arizona Banking and Taxes
Although its income tax rate is among the lowest in the nation, at 2.59-4.5%, and its state sales tax is only 5.6%, Arizonans still pay some of the highest taxes in the country when local taxes are factored in. For example, residents of Winslow, Holbrook, and Pinetop-Lakeside all pay a 9.43% sales tax rate, while those in Kearney pay an astonishing 11.2%.
Housing Market in Arizona
The metropolitan areas of Tucson, Scottsdale, and especially Prescott are the most in-demand locations in Arizona. Surprisingly, the demand for housing is increasing in the metropolitan area of Prescott while there is struggling to meet expectations with a low inventory of housing. Because of high demand, prices for homes have increased by 29.5% since July 2020, with homes selling for a median price of $395,000. In 2021, 2,421 homes were sold compared to last year’s 2,715 (a decrease of 294 homes sold).
Homeownership in Arizona is on the rise, and with the recent increase in the homestead exemption from $150,000 to $250,000, even more, people are considering buying a home.
- In Arizona, only four percent of people own their homes outright.
- The average monthly mortgage payment is $1,434.
- Median rent payments are $1,052 per month.
When you’re struggling to make rent payments, Arizona has an emergency rental assistance program to help you out. And for those having trouble with their mortgage, the state offers the “Save Our Home” program to lend a hand.
Retirement in Arizona may not be as golden as one might hope. The state’s motto, “Ditas Deus,” meaning “God enriches,” could be interpreted as a hint that retirees will need to move to Mexico to find financial enrichment. The average Arizonian has $407,029 saved for retirement, but this falls far short of the estimated $1,000,000 needed for a comfortable lifestyle. Thus, many retirees may find themselves struggling to make ends meet.
As the cost of living in Arizona’s metropolitan areas continues to rise, many residents are choosing to migrate to more affordable states like Georgia. For retirees who rely on Social Security for at least 90% of their income, a low cost of living is a top priority.
Arizona Insurance Premiums
As is the case with most states in the U.S., Arizona follows a fault-based system when it comes to car accidents. This means that those who have been injured or had their property damaged in an accident must be able to prove liability in order to receive compensation for their losses. Given that the average auto insurance premium in Arizona is $1,417 per year, it is important for victims of accidents to be aware of this requirement.
The cost of health insurance can be quite expensive, with the average annual premium costing around $5,877. This is significantly more than the average annual home insurance premium of $1,283.
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