Cost of Living Index by State 2025

Cost of living refers to the amount needed to cover basic expenses, such as food, shelter, transportation, and healthcare. However, costs of living can vary significantly across regions. Cost of living indexes help a person better understand and quantify these differences. Cost of living indexes are used by employers when determining wages or government agencies when determining the need for interventions, such as annual adjustments to Social Security benefits. Individuals also use these metrics when considering relocating, especially for a job.

Cost of living indexes are calculated by first determining a baseline for comparison. When comparing costs across states, the average cost of living in the United States is used as the baseline set at 100. States are then measured against this baseline. For example, a state with a cost of living index of 200 is twice as expensive as the national average. Likewise, living in a state with an index of 50 will cost about half the national average.

The Cost of Living in the United States

A closer look at the national costs of living is needed to better understand costs across states. The average household in the United States spends $61,334 a year on expenses. On average, 34.9% of spending, or roughly $1,784 a month, is dedicated to housing and housing-related costs. The median price of a single-family home in the United States is $273,992. Nationwide, the average rent for a two-bedroom apartment runs $1,154 a month.

The average American household dedicates a further 16% of spending to transportation, an average of $9,826 a year. Annual healthcare costs average another $5,177 annually. Food, including groceries and eating out, costs another $7,317 a year or $609.75 a month. The average monthly cost for utilities in the U.S. is $370.16.

Nationwide, the median household income is $67,521 a year, while personal income for individuals is $35,805. The living wage for the United States is $68,808 annually for a family of four.

Top 10 States with the Lowest Cost of Living Index

Highlighted States with the Lowest Cost of Living Index

Mississippi

• Cost of Living Index: 83.3
• Groceries: 92.2
• Housing: 66.3
• Utilities: 90.4
• Transportation: 86.7
• Health: 94.7
• Miscellaneous: 90.9

Mississippi has the lowest cost of living in the U.S., with a cost of living index of 83.3. Most notably, Mississippi’s housing index is 66., the lowest in the country. The median price for a single-family home in Mississippi is $140,818, and the average rent for a two-bedroom apartment is $991. Mississippi also has the lowest transportation costs in the nation.

The living wage in Mississippi is $80,523 for a family of four. Meanwhile, the median income for a family of four is $70,656. Despite the low cost of living, the poverty rate in Mississippi is the highest in the nation; nearly 20% of Mississippi residents live in poverty. Mississippi is also consistently ranked as one of the worst states to live.

Kansas

• Cost of Living Index: 86.5
• Groceries: 91.7
• Housing: 72.6
• Utilities: 100.2
• Transportation: 97.3
• Health: 100.4
• Miscellaneous: 88.4

The cost of living index in Kansas is 86.5, the second-lowest in the nation. Housing is especially cheap, with an index of 72.6. The average single-family dwelling in the state costs $176,898. Should a family choose to rent, they’ll spend an average of $995 a month for a two-bedroom apartment. Utilities and healthcare costs in Kansas are slightly higher than the national average.

A family of four in Kansas requires an annual income of $89,353 to cover their expenses. Meanwhile, the median income for a family of four is $92,980. Poverty rates in the state are slightly lower than the national average. Kansas also has one of the nation’s lowest unemployment rates at 2.5%.

Alabama

• Cost of Living Index: 87.9
• Groceries: 98.2
• Housing: 70.1
• Utilities: 100.7
• Transportation: 92.7
• Health: 91.2
• Miscellaneous: 94.3

Alabama has a cost of living index of 87.9, the third-lowest in the country. Alabama has the second-lowest housing costs across states, with the average single-family house selling for $170,184. Rent for a two-bedroom apartment runs an average of $1,046 across the state. While utilities and groceries are closer to the national average, Alabama’s health and transportation costs are among the lowest in the nation.

The living wage in Alabama for a family of four is $80,777. Meanwhile, the median income for a family of four is $80,845 a year. Alabama also has one of the highest poverty rates in the country, with 15.6% of residents living at or below the poverty line.

Highlighted States with the Highest Cost of Living Index

Hawaii

• Cost of Living Index: 193.3
• Groceries: 152.9
• Housing: 315
• Utilities: 164.2
• Transportation: 133.7
• Health: 115.3
• Miscellaneous: 126.7

Hawaii’s cost of living index is 193.3, the highest in the nation, meaning the cost of living in the state is almost twice the average. The state is also the most expensive in the U.S. across all metrics except healthcare. Hawaii’s housing costs are three times the national average, with a typical single-family home averaging $730,511. Renters pay an average of $2,399 for a two-bedroom apartment in the state. Groceries also cost 50% more than the national average, as most goods have to be shipped to the island.

Despite the high cost of living, however, Hawaii has one of the country’s lowest poverty rates. While the living wage for a Hawaiian family is $107,702 a year, the median income for a family of four is $118,223.

New York

• Cost of Living Index: 148.2
• Groceries: 118.4
• Housing: 230.1
• Utilities: 99.8
• Transportation: 108.7
• Health: 102.5
• Miscellaneous: 113.7

New York’s cost of living index is 148.2, the second-highest in the country. Housing in New York is the second most expensive in the United States, costing about 1.5 times the national average. The typical price for a single-family home in New York is $373,880. Rent runs $1,659 for an average two-bedroom apartment in the state. However, averages are much higher in New York City, where a two-bedroom unit costs an average of $5,874.

The living wage for a family of four in New York is $110,255. The median income for a family of four is $111,054 annually.

California

• Cost of Living Index: 142.2
• Groceries: 113.7
• Housing: 201.9
• Utilities: 124.3
• Transportation: 131.7
• Health: 110.7
• Miscellaneous: 110.3

California has the nation’s third-highest cost of living index at 142.2. California’s transportation costs are the second-highest in the country, due in part to high gas prices in the State. Housing in California is twice the national average, with a typical single-family home priced at $683,996. The average rent for a two-bedroom apartment in California is $1,884. Costs run much higher in major metropolitan areas, such as Los Angeles and San Francisco.

The living wage for a family of four in California is $110,255, while the median family income is $105,232. California also has the highest rate of homelessness in the nation.