Buying a home in Phoenix: property taxes, payments and Open Doors help

#Phoenix property taxes against other big cities

Phoenix has the lowest effective property tax rate among the 20 large cities we cover: 0.4% of value, and the median owner pays $1,816 a year — the smallest bill of the group. Arizona as a whole has the fourth-lowest ratio of any state at 0.43%.

On the median-priced home, property tax runs $186 a month less than it would at the national ratio of 0.89%. At this tax level, principal and interest make up 84% of the median home’s monthly payment. Your actual bill depends on the county’s assessment and the school, city and special districts that tax the parcel, so check the listing’s last bill.

#A city where more households own

More Phoenix households own than rent: 57.6% of occupied homes are owner-occupied, the highest share among the cities we cover, though below the 67.8% across Arizona.

The median Phoenix home is above the Arizona median. Figures cover the City of Phoenix only; Scottsdale, Mesa and the other Valley cities have their own prices and tax rates.

#The monthly payment on a median Phoenix home

Open the mortgage payment calculator to change the price, down payment or rate.

#Open Doors: Phoenix’s down-payment loan

The City of Phoenix Housing Department’s Open Doors program helps first-time buyers (as FHA defines them) with up to 10% of the purchase price, based on need. The rules:

• Household income at or below 80% of area median income.
• A home inside Phoenix city limits priced at or below $470,250.
• At least $1,000 of your own money, or more if the first-mortgage lender requires it.
• An 8-hour pre-purchase homebuyer education class plus housing counseling.
• An interest-free deferred loan with no monthly payments, fully forgiven after an affordability period of up to 15 years; selling, moving out or refinancing sooner triggers repayment.

The city’s median value is $15,350 under the price limit. The city says reservations for funding are limited, so ask an approved lender whether money is available before you write an offer.

#No transfer tax in Arizona

Arizona’s constitution bars real estate transfer taxes, so neither the state nor Phoenix adds one at closing; you pay recording fees, title insurance, lender charges and prepaid items. With no transfer tax, closing costs on the median home tend to sit nearer the low end of the CFPB’s 2%–5% range, about $9,098–$22,745. The closing cost calculator estimates the pieces.

#What a Phoenix paycheck supports

The median Phoenix household earns $85,246. Using Freddie Mac’s guideline of keeping housing under 30% of gross income, that is a $2,131 monthly budget — enough for about $291,000 with 10% down at today’s average rate, $163,900 below the median value. Covering the median home within the guideline takes about $133,000 a year. The affordability calculator shows the range across debt-to-income limits.

Summer heat drives up cooling bills, so ask for a year of utility history along with the HOA documents. To compare markets, see Denver and Las Vegas; statewide programs are on the Arizona guide. The rent vs buy calculator starts at the city’s median rent of $1,712/mo.