(The Center Square) – The Common Sense Institute released a report this week showing that Phoenix had its lowest metro inflation rate year-over-year from April 2024 to April 2025.
The report showed the city’s inflation increased by only 0.3%.
And April is the eighth consecutive month that Phoenix’s inflation has been below 2%.
At the national level, year-over-year inflation is 2.3% from April 2024 to April 2025, the lowest since 2021.
But the economic news hasn’t been entirely good in Phoenix, Arizona’s capital and its largest city with a population of more than 1.6 million people. Phoenix’s inflation has increased 30.7% since April 2019, compared to the national average of 25.5%.
Housing costs have been the driver of Phoenix’s inflation, Glenn Farley, CSI’s director of policy and research, told The Center Square.
He said Phoenix’s inflation rate was above the national average after the COVID-19 pandemic, but that shifted 12 months ago when the city’s inflation started running below the national average.
The report says the city’s housing costs fell 0.1% from April 2024 to April 2025 .
Farley described Phoenix’s housing market as “frozen” since early 2024.
“Prices and rental costs aren’t going up anymore. But they’re also not coming down,” he said. “That’s gonna keep inflation basically flat in that roughly zero to 1% range, at least in the short term.”
In the long term, the policy and research director said he expects Phoenix’s inflation to increase to 2% to 2.5%.
Phoenix has always had a reputation as an affordable place to live, Farley said. But he added that due to inflation, the city has become more expensive and has lost “that affordability.”
Jennifer Mellor, the Greater Phoenix Chamber’s chief innovation officer, also said housing costs have driven the city’s inflation.
“We have one of the hottest housing markets in the country right now due to the influx of people who are moving here,” the CIO told The Center Square. “And so we’ve had a pretty substantial increase in housing costs and related expenses.”
According to Zillow, in March 2020, the average Phoenix home cost $284,616. Five years later, an average home in the city costs $422,080.
Mellor said rental and housing are becoming more expensive, and new construction costs are rising due to tariffs on aluminium and steel.
The CIO said inflation impacts the Chamber, its members and their communities. She added that other things impacting them are wage increases and health care costs.
The Chamber has 2,400 members who employ over 700,000 employees in the Phoenix area, Mellor said. Members include utility companies, health care companies, service entities and sole proprietorships.
Chamber members have implemented hiring freezes, not because of bad economic conditions but due to economic uncertainty, Mellor said. She added that uncertainty means inflation continues to be a concern.
