You need this salary in Phoenix to achieve the ‘American Dream’

Once upon a time, Americans believed in the American Dream. You could get married and have a kid or two. You could afford a house and a car and a pet, and still have money left over to handle grocery and medical bills. All it took was the right amount of hard work and determination.

These days, though, America is fraught with uncertainty and skepticism. A 2024 Pew Research study found that only 53 percent of people still believe that the American Dream is possible. According to new research published by GoBankingRates, we have a sense of exactly how much money it would take to achieve that dream in Phoenix and two other Arizona cities.

In Phoenix, according to the study, a household would need to earn $135,977 a year to afford the whole spouse-house-kid-pet-car lifestyle. That’s actually a bit less than Mesa, the Valley’s biggest suburb, where a household income of $138,194 is what it takes to live that good life. Tucson is a good deal cheaper, requiring an income of $116,779 to live the stereotypical American Dream.

To create its ranking, GoBankingRates examined the 50 largest cities in the country via several metrics: mortgage costs, pet care, groceries, health care, utilities, transportation and education. The study followed the 50/30/20 budget rule, in which 50% of income is spent on needs, 30% on wants and 20% for savings and debt repayment.

Phoenix ranked 20th on GoBankingRates’ list while Mesa ranked 18th, just behind Atlanta, Las Vegas and Sacramento. Tucson came in at 32nd, behind Fort Worth and ahead of Jacksonville. Yet for many households across Arizona, these numbers are largely aspirational. According to a 2023 Census report, the median household income across Arizona was just slightly more than $77,000.


Though the homebuying market in Arizona has slightly improved over the past several months, potential buyers have remained cautious, and for good reason. A recent Zillow study found that the average American household today would need to make at least $100,000 a year to afford a home worth $367,969. That means that in Phoenix, where the average value of a home is nearly $457,000, home buyers would need a significant raise in order to buy a home.

According to GoBankingRates, the cost of an annual mortgage in Phoenix is nearly $30,000, while a Mesa mortgage will set you back $31,400 a year. Both of these are even higher than certain cities in California, such as Fresno ($27,702 in annual mortgage costs) and Bakersfield ($27,881). Couple that with the cost of other essentials, and it’s easier to understand why the number of renter households is growing at a faster rate than homeowning households.

Those essentials aren’t cheap. Grocery costs are often among the first metrics by which Americans notice inflation. While not as exorbitant as San Francisco’s and New York City’s identical annual costs of $10,565, Phoenix and Mesa grocery costs average out at just more than $8,800 per year. The annual cost of groceries in Tucson remains on the lower end of the list at around $8,600.

Health care costs are where Phoenix and Mesa are most closely giving major cities a run for their money. At $7,049 each, they’re outpricing even notoriously expensive cities such as Seattle, San Diego and Los Angeles. That matches current trends in medical cost inflation — according to a June 2024 study by Peterson KFF Health System Tracker, prices for medical care grew faster than overall inflation.

So, where does this leave the state of the American Dream in 2025? What does it look like for the average Arizonan household to not only survive, but thrive? According to a GoBankingRates study on perceptions of wealth across America, it may simply be a matter of achieving comfort.

“In essence, living within or below your means is often more impactful than accumulating a particular dollar figure,” said Tyler Rayman, wealth management associate with Greenleaf Trust. “Financial security is not about how much you have — it is the confidence that you can meet your obligations, weather unexpected challenges and pursue your goals without undue financial stress.”