Tucson, AZ
Phoenix's quieter twin. Tucson ran HPI **+55.1% over 5 years** but YoY has cooled to **+2.20%** — the Sun Belt slowdown is here. Single-county metro (Pima, 1.04M). Permits **4.44 per 1,000** — strong nationally but **#5 of 7 in Arizona**. **Cap rate proxy 3.81% — TIGHT**, the worst in queue except for SF/LA. Migration +2,185 steady. Anchored by U of Arizona, Davis-Monthan AFB, Raytheon, and mining.
The numbers that matter most
What an investor checks first when sizing up a new metro — affordability ratio, rent vs income, cap rate proxy, and where the market is moving. Each metric shown vs. state and national medians for instant context.
moderate
Price to income
4.22×
The single most-cited 'is this market still cheap' check. Below 3× and you're in an affordability tailwind.
- vs Arizona
- 4.54×-0.31
- vs U.S.
- 3.43×
Benchmark
ACS median home value ÷ median HHI
comfortable
Rent to income
24.8%
What share of a typical household's income goes to rent. Below 30% means tenants can absorb modest rent increases.
- vs Arizona
- 27.4%-2.7
- vs U.S.
- 23.3%
Benchmark
(HUD FMR 2BR × 12) ÷ median HHI
tight
Cap rate proxy
3.8%
Rough first-pass yield assuming a 35% expense ratio. Not an underwriting number — a 'is this even worth modeling' filter.
- vs Arizona
- 3.8%=
- vs U.S.
- 4.4%
Benchmark
(FMR 2BR × 12 × 0.65) ÷ ACS median home value
steady
Net migration
+0.21%
Forward-looking demand signal. Positive net migration drives rent growth and absorbs new supply.
- vs Arizona
- 0.31%
- vs U.S.
- 0.04%+0.17
Benchmark
IRS net migration ÷ population
pipeline growing
Permit pipeline
4.44
permits per 1,000 residents
Forward-supply indicator. Above ~5 means the metro is building meaningfully relative to its size; below 2 means supply is tight.
- vs Arizona
- 5.73
- vs U.S.
- 3.49+0.96
Benchmark
Census BPS permits TTM ÷ population × 1,000
softening
Unemployment
4.1%
Tighter unemployment means higher wages, more rental demand, lower vacancy.
- vs Arizona
- 3.8%
- vs U.S.
- 4.0%
Benchmark
BLS LAUS, latest month
Section index — click any row to jump
What the data says about Tucson
Tucson is Phoenix's quieter twin. Across 1 county — Pima (the entire metro is the county and the county is the entire metro) — the metro packs 1.04 million residents with a household income of $67,929 (Census ACS) and a median home value of $286,900. The HUD Fair Market Rent for a 2-bedroom is $1,402. The House Price Index ran +55.1% over five years (FHFA HPI) — solid Sun Belt territory, beating the U.S. metros average of +34.3% by 21 percentage points.
The interesting fact is the cooldown is here. Recent year-over-year HPI is +2.20% — moderate, slowing. Not negative like Phoenix and Las Vegas (which have flipped) but the Sun Belt rocket has clearly cooled. Inside Arizona, Tucson ranks #5 of 7 by 5-year HPI — Phoenix, Flagstaff, Lake Havasu, and Prescott all ran harder. #2 by population, #2 by permits. The price-to-income ratio is 4.22 (moderate) and the cap rate proxy is 3.81% — tight. Tucson is no longer cheap.
Tucson is a single-county metro — one of the simplest geometries in the queue:
- Pima County (1.04M pop, $286,900 MHV) is the entire metro. 4,631 permits TTM = 4.44 per 1,000 — solid by national standards (above 3.49) but below the Arizona state median of 5.73. The relevant submarkets are inside Pima: Tucson proper, Marana, Oro Valley, Sahuarita, Vail, Catalina Foothills.
The 78% single-family / 21% 5+ multifamily mix is typical Sun Belt — heavy on detached SFR construction. Permit YoY is +9.5% — modest acceleration, not breakout. Tucson's geography is constrained by mountains on three sides and federal land (Saguaro NP, Coronado NF), so sprawl moves south-southeast toward Sahuarita and northwest toward Marana — not in all directions like Phoenix.
What's changing: net IRS migration is +2,185 returns (IRS SOI) — +0.21% of population. Steady inflow but well below the Arizona state median of +0.31%. Phoenix and Flagstaff pull most of the in-state inflow; Tucson gets the remainder. Owner-occupancy 64.8%, bachelor's-or-higher 35.9%, unemployment 4.1% matching national. The labor market is anchored by the University of Arizona, Davis-Monthan Air Force Base, Raytheon (now RTX), Asarco mining, and Banner-University Medical Center. It's a defense + university + healthcare metro — diversified but not a growth juggernaut.
What does an investor do?
- If you're hunting cash flow: Tucson is rough. 3.81% cap proxy on a $286K median is the wrong end of the queue — only Phoenix, LA, SF, and the coastal CA metros are tighter. The math doesn't work for buy-and-hold rental at current prices.
- If you're playing appreciation: Maybe. +55.1% over 5 years is real, but the +2.20% YoY is the warning sign. The Sun Belt cooldown is hitting Tucson; the next 12-24 months could be flat or negative. If you must have Arizona exposure, Phoenix has the bigger swing in either direction; the smaller Mountain West metros (Flagstaff, Prescott) have stronger fundamentals.
- If you already own here: Hold but don't add. Tucson's structural fundamentals — diversified employer base, U of A, Davis-Monthan — are sticky enough to avoid a Phoenix-style correction. The 64.8% owner-occupancy is mid-tier, not top-tier. Don't expect another five-year +55% run, but don't expect a collapse either.
Where prices are and where they've been
FHFA House Price Index — repeat-sales index across the metro, sized against this metro's median household income and benchmarked against the Indiana metros average and U.S. metros average.
5-year price appreciation
+55.1%
FHFA HPI · Q1 2020 → Q4 2025
+2.2% YoY
$286,900 median home value
Tucson home prices climbed 55.1% over the last 5 years according to the FHFA repeat-sales index — a steady appreciation pace for a Midwest metro of this size. The 1-year change of 2.2% suggests steady appreciation continuing.
See the chart below for how the metro's appreciation curve stacks up against the Indiana metros average and the U.S. metros average. The gap between the metro and the national line is the "catch-up" or "lag" signal — and the slope tells you whether the gap is widening or closing.
How to read it
- 01Tucson ran **+55.1% over five years** — solid Sun Belt territory, beating the U.S. metros average (+34.3%) by 21 points but trailing Phoenix and the rest of the Arizona Mountain West.
- 02**Recent YoY is +2.20%** — moderate, slowing. Not negative like Phoenix and Las Vegas (which have flipped) but the Sun Belt cooldown has clearly arrived in Tucson too.
- 03Inside Arizona, Tucson ranks **#5 of 7** for 5-year HPI — Phoenix, Flagstaff, Lake Havasu, and Prescott all ran harder. **#2 by population, #2 by permits**.
- 04U.S. metros ran **+34.3%** over the same window. Tucson outperformed the national by ~21 percentage points — but the gap is narrowing fast.
- 05The takeaway: Tucson is **Phoenix's quieter twin** — same desert sprawl, slower run-up, slower cooldown. The cycle has started to roll over but it's not breaking like the bigger Sun Belt metros.
Where the value tier sits — top 1 counties by home value
| County | Median home value | Median HHI | Price-to-income | Verdict |
|---|---|---|---|---|
| Pima County | $286,900 | $67,929 | 4.22× | moderate |
How to read the FHFA House Price Index
FHFA HPI is a repeat-sales index — it tracks the price change of the same properties over time, smoothing out new construction and luxury transactions. It's built from the mortgage data the GSEs (Fannie Mae, Freddie Mac) already see, which makes it free of MLS survey error and immune to listing-feed gaps.
- 01Repeat-sales method. Tracks the same properties over time, so new construction and luxury transactions don't skew the trend.
- 02Federally sourced. Built from GSE mortgage data — no MLS survey error, no commercial license required to publish.
- 03Slope, not level. Watch the slope of the line, not the absolute index value — a steepening curve is a more reliable buy signal than the level.
The rent ladder
HUD Fair Market Rent by bedroom count, sized against this metro's median household income and benchmarked vs Indiana and the U.S.
Typical 2-bedroom rent
$1,402
/ month · HUD FMR FY 2026
24.8% of median HHI
A typical 2-bedroom in costs the median household 24.8% of their income — 1.5 points above the U.S. average (23.3%) 2.7 points below Arizona (27.4%).
HUD calls anything above 30% "rent-burdened." This metro sits comfortably under that line, which means tenants can absorb modest rent increases — and landlords have headroom on rent hikes before pushing tenants out of the market.
Fair Market Rent — by bedroom count
| Bedroom | Monthly | Annual | % of median HHI | Verdict |
|---|---|---|---|---|
| 1 BR | $1,081 | $13.0K | 19.1% | comfortable |
| 2 BR | $1,402 | $16.8K | 24.8% | comfortable |
| 3 BR | $1,950 | $23.4K | 34.4% | rent-burdened |
Why HUD Fair Market Rent matters
FMR is HUD's 40th-percentile rent estimate by bedroom count — refreshed every fiscal year, sourced from Census surveys (not commercial listing data), and used as the cap for Section 8 voucher payments. Three things investors should know:
- 01Defensible benchmark. Federal source, no commercial license required to publish or compare against.
- 02Section 8 ceiling. A property at or below FMR is voucher-eligible — government-paid rent at the FMR cap.
- 03Conservative estimate. 40th percentile means more than half of actual market rents in the metro come in higher.
Labor market direction
U.S. Bureau of Labor Statistics — LAUS (unemployment) + CES (nonfarm employment), benchmarked against the U.S. average.
Unemployment rate
4.1%
BLS LAUS · latest month
Tucson's labor market is softening, with unemployment running at 4.1% — 0.1 points above the U.S. metros average (4.0%).
For an investor, tighter unemployment means higher wages, more rental demand, and lower vacancy. The trend chart below shows how the metro's unemployment has moved over the last 30 months.
Unemployment rate
4.1%
Nonfarm jobs
—
Median household income
$67,929
ACS 5-year
How to read the labor market
Two BLS series tell you almost everything you need about a metro's labor market: LAUS (unemployment, refreshed monthly) and CES (nonfarm payroll counts, refreshed monthly). LAUS is the tightness signal; CES is the size and direction signal.
- 01Unemployment is rental demand. Tighter labor markets mean higher wages and lower vacancy — landlords have pricing power when employers are competing for workers.
- 02YoY change is the trend signal. A negative pp YoY change means the labor market tightened over the last year — usually a leading indicator for rent growth.
- 03Nonfarm growth is supply absorption. Positive nonfarm payroll growth absorbs new housing supply and supports the rent + price trajectory together.
What's being built
U.S. Census Bureau, Building Permits Survey — trailing 12 months, broken out by structure type, with the YoY change as the directional signal.
Total permits TTM
4,631
Census BPS · trailing 12 months
+9.5% year-over-year
4.44 permits per 1,000 residents
Tucson pulled 4,631 building permits over the trailing 12 months, a modest expansion 9.5% year-over-year. That works out to 4.44 permits per 1,000 residents, vs the U.S. metros average of 3.49.
Single-family vs multifamily mix matters: 5+ unit permits are lumpy (developers file for entire projects at once), while single-family permits are smoother and more reliable as a demand signal. The chart below breaks out the monthly mix.
Single family
3,597
trailing 12 months
2–4 unit
48
trailing 12 months
5+ unit
986
trailing 12 months
How to read the supply pipeline
Census BPS publishes building permit counts every month at the county level, by structure type. Single-family permits are the smooth signal — they reflect ongoing builder demand. 5+ unit permits are lumpy and project-level — one apartment approval can spike a month.
- 01Permits per 1,000 residents. The size-adjusted comparison number. Above ~5 means the metro is building meaningfully relative to its population; below 2 means supply is tight.
- 02YoY change is the direction. Year-over-year change in TTM permits tells you whether builders are leaning in or pulling back. Watch this number for trend reversals.
- 03Mix matters for cap rates. Heavy 5+ unit permitting tends to compress cap rates; single-family-dominated pipelines preserve them.
All 1 counties, ranked by population
Census Bureau (population, ACS demographics) + Census Building Permits Survey.
How to read it
- 01**Pima County is the entire metro** — 1.04 million residents, 4,631 TTM permits = 4.44 per 1,000.
- 02Tucson is a **single-county metro** — one of the simplest geometries in the queue (only Las Vegas with Clark County is smaller). All metro activity happens in Pima.
- 03**78% single-family / 21% 5+ multifamily mix** — typical Sun Belt. Heavy on detached SFR construction in the southern, eastern, and northwestern corridors out of Tucson proper.
- 04Tucson runs **4.44 permits per 1,000 residents** — solid, above the national 3.49, but **below the Arizona state median of 5.73**. By Arizona standards, Tucson is the slow builder.
- 05**Permit YoY is +9.5%** — modest acceleration. Not the +59.7% Birmingham number or +29.6% Grand Rapids — Tucson is steady, not breakout.
How to read the map
- 01**Pima County (the entire metro) at 4.44 per 1,000** — solid by national standards but moderate by Sun Belt standards.
- 02Single-county metros compress the visualization — **the relevant submarkets are inside Pima County**: Tucson proper, Marana, Oro Valley, Sahuarita, Vail, Catalina Foothills, the Tucson Mountains.
- 03The southern submarkets (Sahuarita, Vail) and the northwestern submarkets (Marana, Oro Valley) are where most new construction is happening — outside the city limits but inside Pima.
- 04Tucson's geography is constrained by mountains on three sides and federal land (Saguaro NP, Coronado NF) — sprawl moves south-southeast toward Sahuarita and northwest toward Marana, not in all directions like Phoenix.
| # | County | Population | Median HHI | Home value | Permits TTM | YoY |
|---|---|---|---|---|---|---|
| 1 | Pima County | 1,042,393 | $67,929 | $286,900 | 4,631 | +9.5% |
Similar metros nationally
5 metros closest to Tucson by population and median household income — head-to-head on the metrics that matter for an investor.
Peer set
5
metros nearest by population + HHI
Tucson is closest in size to Tulsa, Fresno, Birmingham, Rochester.
The table below ranks every metric — green cells mark the best value in the column, rust cells mark the worst. Tucson is highlighted as the focal row.
| Metro | Pop | Med HHI | Home value | P/I | Cap proxy | HPI 5y | Permits/1k | Migration | Unemp |
|---|---|---|---|---|---|---|---|---|---|
★Tucson | 1.04M | $68K | $287K | 4.22× | 3.8% | +55.1% | 4.44 | +0.21% | 4.1% |
Tulsa, OK | 1.02M | $68K | $204K | 3.01× | 4.6% | +52.6% | 4.94 | +0.13% | — |
Fresno, CA | 1.01M | $72K | $363K | 5.05× | 3.6% | +47.8% | 2.31 | -0.08% | — |
Birmingham-Hoover, AL | 1.11M | $70K | $226K | 3.25× | 4.4% | +44.7% | 3.82 | -0.08% | 2.2% |
Rochester, NY | 1.09M | $74K | $190K | 2.55× | 6.5% | +66.5% | 1.73 | -0.19% | 3.7% |
Greenville-Anderson, SC | 0.93M | $69K | $243K | 3.52× | 4.3% | +64.9% | 8.85 | +0.32% | 4.6% |
How to read this comparison
Peer metros are picked by population + median household income — the closest five matches nationally — so the comparison is apples-to-apples on size and economic class. Sun Belt entrants like Las Vegas and Nashville are included when they fall in range, which is why this peer set spans both the Midwest and the Sun Belt.
- 01Green = best in column. The cell with the most-favorable value for that metric, accounting for whether higher or lower is better.
- 02Rust = worst in column. The cell with the least-favorable value. Combined with the green markers, this is your at-a-glance "where does my metro win and where does it lose."
- 03Cap proxy is the yield lens. Cap rate proxy = (FMR 2BR × 12 × 0.65) ÷ median home value. A first-pass yield filter, not an underwriting number — but it puts the peer set on a single comparable scale.
Where people are moving in from
IRS Statistics of Income — Tax Year 2022. Excludes intra-metro suburban churn.
Net migration
+2,185
tax returns · IRS SOI · TY 2022
+0.21% of metro population
3,002 from top origin
Tucson absorbed +2,185 net IRS migrants — +0.21% of population. Steady inflow but well below the Arizona state median of +0.31%. Phoenix and Flagstaff are pulling most of the in-state inflow; Tucson gets the remainder.
The IRS data lags by ~2 years (households file taxes the year after they move), but it's the only nationwide county-to-county migration data sourced from administrative records, not survey estimates. The table below shows the top origin counties — the gravitational sources of new residents.
Top origin counties — where new residents are coming from
| Origin county | Tax returns |
|---|---|
| Maricopa County, AZ | 3,002 |
| Pinal County, AZ | 782 |
| Cochise County, AZ | 773 |
| Los Angeles County, CA | 703 |
| San Diego County, CA | 602 |
| Santa Cruz County, AZ | 489 |
Who lives in Tucson
U.S. Census Bureau · American Community Survey 5-Year Estimates · 2019–2023 vintage.
Who lives here
- Median age
- 39.7
- Owner-occupancy
- 64.8%
- Bachelor's+
- 35.9%
Tucson relatively young Midwest metro: Median age 39.7, 64.8% owner-occupancy 35.9% holding a bachelor's degree or higher. Stable, educated, and mostly homeowner-driven.
The catch: 48.5% of renter households are rent-burdened (paying 30%+ of income on rent) — high enough to flag as a constraint on rent growth even though the headline rent-to-income ratio looks comfortable.
- Median household income
- $67,929
- Median age
- 39.7
- Bachelor's+ degree
- 35.9%
- Owner-occupancy rate
- 64.8%
- Vacancy rate
- 9.3%
- Rent burdened (30%+)
- 48.5%
Data sources
| Metric | Source | Type | Vintage |
|---|---|---|---|
| Home prices | FHFA — House Price Index | Index | Q4 2025 |
| Fair market rents | HUD — Fair Market Rents | Administrative | FY 2026 |
| Unemployment rate | BLS — Local Area Unemployment Statistics | Survey | Dec 2025 |
| Nonfarm employment | BLS — Current Employment Statistics | Survey | Dec 2025 |
| Building permits | Census — Building Permits Survey | Survey | Mar 2026 TTM |
| Migration flows | IRS — Statistics of Income, Migration Data | Administrative | Tax Year 2022 |
| Demographics | Census — American Community Survey 5-Year | Survey | 2019–2023 |
| Household income | Census — American Community Survey 5-Year | Survey | 2019–2023 |
Page last refreshed: April 9, 2026