Poverty rates are falling in the Valley but one big stumbling block to the decline is that rent is taking a larger share of household income.
According to the US Census Bureau’s latest American Community Survey, the poverty rate in Arizona was 12.5% last year.
It is the first time in a decade that the state’s poverty rate dipped below the overall U.S. rate and represents a decline of six-point decline during that time frame.
The Valley’s poverty rate has dropped even faster. In 2022, the poverty rate in the Phoenix-Mesa metropolitan area was 26.9%. It has fallen a staggering nine points since then to 18%.
Arizona has one of the highest rates of decline for poverty in five years. The 11% drop is the eighth best of states and territories tracked by the Census Bureau.
Nearly all census-designated ethnicities experienced a decline in the poverty rate over five years.
White, non-Hispanic Arizonans had the lowest overall poverty rate of 9% but were the only number to not change compared to 2018. The poverty rate for Hispanics declined four points to 16%. Native Americans also experienced a four-point drop but had the overall highest poverty rate in the state with nearly a third living at or under the poverty line.
While a drop in the poverty rate is good, it is happening at the same time rent is becoming a bigger burden on households.
For most of the last decade the median share of income spent on rent by Arizona households was under 30% and was below the figures for the U.S. This all changed in the past two years when the median share of household income going to rent increased to 32%, surpassing the national number.
The income divide is stark. Income brackets for households making under $50,000 annually are 45% of households in the state.
Rent eats up more than 40% of income for most of these households, and the share gets worse the lower down the income bracket.
Those households making between $35,000 and $49,999 spend over 50% of their income on rent. For households earning $20,000 to $34,999 that number is 72%. Arizona households making under $20,000 spend over 80% of their income on rent.
On the other side of the income spectrum, households making between $50,000 and $74,999 spend about 19% of their income on rent and those making above that threshold are in the single digits.
Valley cities where rent accounted for the largest share of household incomes are in the West Valley. Avondale tops the list at 38% and a nine-point increase in five years. Glendale, Peoria, Goodyear, and Phoenix are also in the top five.
