Money / Economy
6 min Read
By Cynthia Measom
Depending on where you live in the U.S., costs will vary for things like the food you eat, the energy you consume, the healthcare you require and the transportation you use. And sometimes, these cost differences are astronomical.
For example, in one state, you’ll pay over 200% more for housing than the national average, and in another you’ll pay 51% more than the national average for healthcare.
To find the most expensive states to live in, GOBankingRates looked at annual living expenses for all 50 states, utilizing the 2021 Consumer Expenditure Survey, which is the most recent data from the Bureau of Labor Statistics. The cost of living indexes were gathered for housing, groceries, utilities, healthcare and transportation and overall annual expenditure totals for each living expense were calculated.
Final rankings for the most expensive states to live in were determined by the overall annual expenditures of each state.Here are the 10 most expensive states to live in, in reverse order.
10. New Hampshire
- State Cost of Living Index: 114.7
- State Annual Expenditures: $76,766
In New Hampshire, housing, utilities and transportation are all above the national average. However, healthcare there is the second-most expensive out of all the states on this list. It’s 28.7% over the national average, costing $7,017 per year, while the national average cost for healthcare is more than $1,500 less annually at $5,452.
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One reason for the higher cost is that, unlike some other states, New Hampshire has less oversight or accountability than other states when it comes to healthcare costs, according to NH Business Review.
9. Connecticut
- State Cost of Living Index: 115.4
- State Annual Expenditures: $77,235
The cost of groceries in Connecticut is just a bit below the national average at approximately 99%. However, you’ll pay the most for utilities here.
Utilities are 27% higher than the national average — $5,376 versus $4,223. The high utility costs are partially due the region relying on natural gas to fuel its power plants, according to CT Insider.
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8. Vermont
- State Cost of Living Index: 116.4
- State Annual Expenditures: $77,904
In Vermont, the costs for groceries, utilities, healthcare and transportation are all above the national average. However, utilities and transportation are the most expensive at 22% and 21.3% above the national average, respectively.
According to Vermont Public, Vermont is at the end of the energy pipeline, which makes energy more expensive for the state. Also, natural gas is mostly used by people in their homes, not by big industrial consumers who could offset the energy costs.
7. Oregon
- State Cost of Living Index: 122.2
- State Annual Expenditures: $81,786
In Oregon, housing costs are 56% more expensive than the national average — $20,696 annually versus $13,258. When it comes to the housing market, supply and demand are a big issue in Oregon.
Ever since the pandemic, droves of people have been moving to the state from places like Seattle and San Francisco. However, housing isn’t the only cost-of-living expense that stands out in Oregon — transportation costs are also 25% above the national average.
6. Maryland
- State Cost of Living Index: 124.1
- State Annual Expenditures: $83,058
In Maryland, all cost-of-living expenses are higher than the national average except for healthcare, which is 5.6% lower. The highest expense in the state is housing, which is 57% higher than the national average. Supply and demand is a big issue here, as well.
5. Alaska
- State Cost of Living Index: 125.5
- State Annual Expenditures: $83,995
When it comes to the cost of living related to healthcare, Alaska’s is much more than any other state on this list at 51.7% above the national average. Limited competition among medical providers, high compensation for provides and higher hospital profit margins all contribute to the higher healthcare costs, according to Alaska Common Ground.
Grocery costs in Alaska are 38.4% higher than the national average due to its geographical location. Much of Alaska’s food is brought in by container ships over the water.
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4. New York
- State Cost of Living Index: 135.7
- State Annual Expenditures: $90,821
The housing cost-of-living index in the state of New York is a whopping 94% higher than the national average, whereas groceries are about 9% higher. The cost of living related to utilities is the most reasonable at only 0.6% above the national average, while healthcare and transportation are 3% and 5.6% above the national average, respectively.
3. California
- State Cost of Living Index: 138.7
- State Annual Expenditures: $92,829
It’s no secret it costs a lot more to buy a home in many areas of California than it does elsewhere in the U.S. California’s housing cost-of-living index is on par with New York’s, coming in 94% higher than the national average. Groceries are approximately 12% higher than the national average, while the utilities cost-of-living index is approximately 22% higher.
2. Massachusetts
- State Cost of Living Index: 149.9
- State Annual Expenditures: $100,325
Massachusetts housing cost-of-living index is the second-highest on this list at approximately 117% over the national average. Inflation, land costs, labor and materials all contribute to the higher expense, according to CBS News Boston.
The transportation cost-of-living index is also notable in Maryland at 34% over the national average, and the utilities cost-of-living index is about 21% higher than the rest of the country.
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1. Hawaii
- State Cost of Living Index: 186
- State Annual Expenditures: $124,486
Hawaii is truly a paradise, but it is also the most expensive state in America to live in. The cost of living in Hawaii overall is 86% higher than the national average, and the cost of housing in Hawaii is a jaw-dropping 207% above the national average.
If you’re wondering why housing is so expensive in the Aloha State, strict housing regulations have forced a shortage. “Hawaii has the most burdensome housing regulations in the nation,” said Joe Kent, executive vice president for the Grassroots Institute of Hawaii. “On average, it takes over 10 years for home builders to turn a raw piece of land into a house, and sometimes it takes even longer.”
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Methodology: GOBankingRates surveyed annual living expenses in all 50 states, using the 2021 Consumer Expenditure Survey (latest available) data from the Bureau of Labor Statistics. The itemized costs of living evaluated were housing, groceries, utilities, healthcare and transportation, collectively termed “necessities”, as well as overall annual expenditure totals. Based on each state’s respective cost of living index for each category, sourced from the Missouri Economic Research and Information Center’s 2022 Q3 Cost of Living Data Series, the study calculated the annual cost of each necessity and overall expenditures. Final rankings were determined solely by the overall annual expenditures of each state. GOBankingRates GOBankingRates also found the median household income of each state from the 2021 American Community Survey. All data was collected on and up to date as of January 3, 2023.
