State Comparison
Arizona vs New Mexico
Side-by-side comparison of 16 financial metrics using documented public datasets and estimates, with sources listed below.
Overall Score
Cost of Living
Housing
Taxes
Income & Employment
Business
Insurance & Living
Key Takeaways
- 1
Arizona leads in 7 of 16 financial metrics, making it the more favorable state overall.
- 2
Housing: Median home prices are $423,000 in Arizona vs $321,000 in New Mexico — a $102,000 difference.
- 3
Taxes: Arizona has a 2.5% top income tax rate while New Mexico has a 5.9% top rate. Property tax rates are 0.48% vs 0.63%.
- 4
Cost of Living: Arizona's index is 107.6 and New Mexico's is 89.9 (national average = 100).
Run the Numbers
Use our free calculators with real Arizona and New Mexico data to model your specific scenario.
Frequently Asked Questions
Is Arizona or New Mexico more affordable?
New Mexico has a lower cost of living index (89.9) compared to Arizona (107.6), where 100 is the national average. However, affordability depends on your specific situation — compare housing, taxes, and income together for a complete picture.
Which state has lower taxes — Arizona or New Mexico?
It depends on what you earn, spend, and own — the three rates below apply to different bases (income, purchases, and home value), so they cannot be added into a single burden figure. On the headline rates alone, Arizona is lower on more of them. Arizona has a 2.5% top income tax, 5.6% state sales tax, and a 0.48% effective property tax rate. New Mexico has a 5.9% top income tax, 4.875% state sales tax, and a 0.63% effective property tax rate.
What are housing costs in Arizona vs New Mexico?
The typical home value in Arizona is $423,000 compared to $321,000 in New Mexico (Zillow Home Value Index, June 2026). For renters, HUD's FY2026 Fair Market Rent for a 2-bedroom unit — the 40th-percentile gross rent, not an average — is $1,709/month in Arizona vs $1,308/month in New Mexico.
Which state is better for starting a business — Arizona or New Mexico?
LLC filing costs are $50 in Arizona vs $50 in New Mexico, with annual fees of $0 and $0 respectively. Arizona's 2.5% top tax rate compared to New Mexico's 5.9% rate may also factor into your decision.
Should I move from Arizona to New Mexico?
It depends on your priorities. Arizona wins in 7 of 16 metrics we compared. Use our free calculators to model your specific financial scenario — including salary, property tax, and cost of living for each state.
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Related Comparisons
Comparing Arizona and New Mexico
When deciding between living in Arizona or New Mexico, the financial picture goes beyond just one metric. This comparison analyzes 16 key financial indicators drawn from the U.S. Census Bureau (American Community Survey), the Tax Foundation, HUD Fair Market Rents, Zillow's Home Value Index, the NAIC's insurance databases, the U.S. Department of Labor, C2ER's Cost of Living Index, and state agencies, to give you a comprehensive overview.
Arizona (AZ) has a median household income of $81,486 with a cost of living index of 107.6. New Mexico (NM) has a median household income of $67,816 with a cost of living index of 89.9. Income figures are Census ACS 1-year estimates (table B19013, 2024); the cost-of-living index is C2ER's Q1 2026 survey via MERIC, where 100 is the national average of surveyed cities.
These numbers are estimates. Individual circumstances vary based on location within each state, family size, profession, and lifestyle. Use our free Arizona calculator or New Mexico calculator to model your specific financial scenario.
Sources per metric are named in each row's note above. Last reviewed . Some values are estimates; consult a qualified professional for financial advice.