Posted by Preston Guyton on Tuesday, January 24, 2023 at 2:42:44 PM By Preston Guyton / January 24, 2023 Comment
![What Are the Most Expensive States to Live In 2023? (1) What Are the Most Expensive States to Live In 2023? (1)](data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==)
For homeowners, one of the best ways to ensure that a mortgage stretches as far as possible is to live in a low-cost-of-living (COL) area. If COL is low, the amount of square feet you can buy for your money tends to go up.
The problem is that prices seem to be going up everywhere. When the consumer price index (CPI) recently reported that the index of all items increased 6.5% before seasonal adjustments over the last 12 months, it was considered good news because of how high inflation was in 2022. Higher costs on everything from groceries to mortgages have taken a bite out of everyone's pocket, making the area you live all the more critical in 2023.
Not everyone has access to low COL areas. Many homeowners have no choice but to buy in a high COL area for work or to be near family. For others, there's some flexibility in planning. That's why we've tabulated the latest statistics that show the most expensive states to live in throughout 2023. Here's what we found.
The Cost of Living Index
First off: what affects the cost of living? Finding the most expensive state to live in requires tabulating numbers from the price of groceries to the cost of housing. And these numbers will inevitably vary from state to state. Your cost of living is also at the mercy of your circ*mstances. High childcare costs won't affect you if you don't have children. Those costs can make or break your budget if you have five children.
To help address this issue, many turn to the Cost of Living Index. This index compares by geography, such as town to town, and state to state. It factors in several common expenses, including:
- Food
- Shelter/homes
- Transportation
- Energy
- Clothing
- Healthcare
- Childcare
By tracking typical prices across these categories, you can estimate what living in a particular area might cost. You can also use this number to track changes over time. For instance, did a state go up in COL relative to the others, or did it go down?
You'll find several different COL indexes, each using its own methodology. One of the most popular comes from the Economic Policy Institute, which regularly updates its family budget calculator to give people a sense of how much they can expect to pay in different areas.
If you're considering moving to one of the states on this list, that calculator can identify your actual COL. After all, even a statewide COL index will not apply equally to every town or city within that state.
The Most Expensive States in 2023
The average family in the U.S. pays about $61,000 a year in living expenses. That provides the context for the places in the U.S. where those living expenses can be far above the median. Let's look at what the data is saying about the highest cost of living states, according to World Population Review.
- Hawaii. Tops on the list lands Hawaii, with a COL index of 193.3. The price of housing is the sore spot here, scoring 315, while other categories—like healthcare (115) bring down the average a bit. Hawaii also boasts a poverty rate among the lowest in the nation. For that, it has a high average income to thank.
- New York. Considering high COL areas tend to be states with dense population centers, New York's entry on this list shouldn't be too much of a surprise. Its COL index scored much lower than Hawaii's at 148.2. Again, housing was the main culprit here, driving up the average score compared to other categories, like groceries and utilities. Housing scored 230.1, lower than Hawaii's but still considerably above the national average.
- California. High gas prices in California drive up its transportation costs, one reason it ranks as the third-highest COL state in the nation. At 131.1 on the index rating, its transportation costs are much higher than New York's 108 rating, for example. And with a single-family home priced at $683,996 on average, California's housing costs might not be as exaggerated as Hawaii's and New York's. However, they can still be a significant cause for concern.
- Massachusetts. Though Massachusetts doesn't have the higher housing prices of California or New York, it still clocks in at 177 for real estate, landing it at number four on the list. However, Massachusetts generally performs well in the other categories, with groceries, utilities, and transportation all within ten points of each other, just under 120.
- Oregon. Closely trailing Massachusetts is Oregon, comparing favorably to Massachusetts in every category except transportation, where Oregon's 125.9 is higher than Massachusetts' 111. Higher gas prices on the west coast tend to drive up these costs for the Pacific states. However, Oregon is the first on the list to crack a utility index of less than 100. Overall, its score of 130 puts it nearly on par with Alaska and the second tier of high COL states as the high scores begin to level off.
Understanding where your state stacks up requires a grasp of the different categories that typically impact the cost of living: food, housing, utilities, and transportation. While you might save on transportation, you could pay more for housing and vice versa. Still, an overall high COL tells you to expect to spend more out of pocket across the board.
FAQs
States With Highest Cost of Living
Hawaii is the state with the highest cost of living in the US, with a cost of living index of 184. This is due to its isolated location and the high demand for housing, food, and energy.
What is the most expensive state to live in right now? ›
According to several studies on cost of living, Hawaii is the most expensive U.S. state to live in. Prices are typically double in Hawaii compared to those on the mainland, and the continued rise in inflation is making costs ranging from housing to health care much more expensive.
What are the top 10 states with the highest cost of living? ›
10 Most Expensive States To Live In
- New Hampshire. State Cost of Living Index: 114.7. ...
- Connecticut. State Cost of Living Index: 115.4. ...
- Vermont. State Cost of Living Index: 116.4. ...
- Oregon. State Cost of Living Index: 122.2. ...
- Maryland. State Cost of Living Index: 124.1. ...
- Alaska. State Cost of Living Index: 125.5. ...
- New York. ...
- 3. California.
What is the cheapest state to live in 2023? ›
1. Mississippi. Coming in as the cheapest state to live in in the United States is Mississippi with a cost of living index score of 83.3. It also has the lowest average housing costs in the nation at 33.7% below the national average.
Where is best to live in 2023? ›
10 World's Best Countries To Relocate And Live In 2023, According To A New Data
- New Zealand. What is this? ...
- Australia. Australia boasts a thriving economy based on market principles and is considered a prosperous nation. ...
- Netherlands. ...
- Germany. ...
- Finland. ...
- Norway. ...
- Switzerland. ...
- Canada.
What state to move in 2023? ›
Georgia. With Atlanta voted as the best place to move in 2023, The Peach State is expecting to see a lot of growth. This Southern state boasts an unemployment rate significantly lower than the national average at only 2.9%.
Which state is cheapest to live? ›
Cheapest States to Live In
- Michigan. ...
- Arkansas. ...
- Ohio. ...
- West Virginia. Average Weighted Cost of Living Index: 90.18. ...
- Indiana. Average Weighted Cost of Living Index: 90.15. ...
- Tennessee. Average Weighted Cost of Living Index: 89.56. ...
- Missouri. Average Weighted Cost of Living Index: 89.54. ...
- Iowa. Average Weighted Cost of Living Index: 89.52.
What state has the most expensive housing? ›
1. Hawaii. Hawaii is known for its beautiful beaches, warm climate, and breathtaking scenery. However, it is also the most expensive state to buy a house, with a Zillow Home Value Index of $834,582.
What is the least affordable state to live in? ›
Here's the full list of the top 10 most expensive states to move to in 2023:
- Hawaii (average house price: $636,400)
- District of Columbia (average house price: $618,100)
- California (average house price: $538,500)
- Massachusetts (average house price: $398,800)
- Colorado (average house price: $369,900)
What is the #1 expensive state? ›
Most Expensive States in the US
# | State | Cost of Living Index |
---|
1 | Hawaii | 184 |
2 | District of Columbia | 152.2 |
3 | Massachusetts | 149.7 |
4 | California | 137.6 |
47 more rows
Hawaii. 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.
Is New York or California more expensive? ›
Which City Is More Affordable: Los Angeles or New York City? Both NYC and LA are among the most expensive cities in both the U.S. and the world. However, the average cost of living in LA is also 24-27% lower than that of NYC.
Where are retirees moving to in 2023? ›
Cities Where Retirees Are Moving
Rank | City | Moved Out2 |
---|
1 | Mesa, AZ | 1,338 |
2 | Henderson, NV | 1,968 |
3 | San Antonio, TX | 1,963 |
4 | North Las Vegas, NV | 1,190 |
11 more rowsApr 17, 2023
Where is the best state to live in America? ›
▲ Overall Rank | State | Quality of Life |
---|
1 | Wyoming | 36 |
2 | Vermont | 22 |
3 | South Dakota | 39 |
4 | New Hampshire | 37 |
40 more rowsJan 12, 2023
What are the three most affordable states to live in? ›
The three cheapest states to move to in terms of housing costs are: West Virginia, with an average price of $123,000; Mississippi, with an average price of $125,000; and Arkansas, with an average house price of 133,600. You can view the 10 cheapest states to move to below.
Where not to go in 2023? ›
World's most dangerous destinations for 2023
- Venezuela (83,76)
- Papua New Guinea (80.79)
- South Africa (76,86)
- Afghanistan (76,31)
- Honduras (74.54)
- Trinidad & Tobago (71.63)
- Guyana (68,74)
- El Salvador (67,79)
Where is the highest quality of life? ›
According to the Human Development Index, some countries provide a better quality of life than others. The Human Development Index (HDI) is calculated based on three main factors: life expectancy, education, and per capita income. In 2021, Switzerland was ranked first in the HDI, followed closely by Norway and Iceland.
What is the fastest growing city 2023? ›
Texas emerges as the leader in the fastest-growing cities in the United States, with Georgetown retaining its position as the fastest-growing city overall.
Which state is everyone moving to? ›
What States Are Americans Moving To? The most popular state people moved to in 2022 was Florida, while the state people most often moved from was California. Texas was the second-most popular state for Americans on the move, while North Carolina came in third.
What states are people leaving the most? ›
Top states residents are leaving
The annual 2022 United Van Lines National Movers study is out! But it wasn't good news for New Jersey or New York. A similar report from United Van Lines showed New Jersey as the top outbound state, followed by Illinois, New York, Michigan, and Wyoming.
North Dakota takes the cake as the best state in the U.S. to save money in. With the third lowest debt-to-income ratio in the country for Q3 2022—and the second lowest percentage of income spent on housing costs and rent—North Dakotans are able to keep more money in their pockets.
What is a reasonable cost of living increase for 2023? ›
While the 2022 COLA adjustment was 5.9%, government inflation data showed costs grew at a faster pace for much of last year. Now, the 8.7% COLA for 2023 is outpacing current inflation, with a 5.8% increase over the past 12 months for the consumer price index for urban wage earners and clerical workers, or CPI-W.
What is the official cost of living increase for 2023? ›
Each year, the Social Security Administration applies a COLA to payments made to those receiving Social Security and Supplemental Security income (SSI). For 2023, the COLA increase is 8.7%, which is significantly larger than the COLAs in recent years. What Is a Pay Period & How Do Pay Periods Work?
Will cost of living go down in 2023? ›
Prices are currently coming down in some markets, and the national median price was ever-so-slightly lower in February 2023 than it was in 2022, but experts do not expect dramatic drops. In many areas where prices are falling, the declines have not significantly improved affordability.
What is the average US home price in 2023? ›
Average home price in the United States: $436,800
The median home sales price is $436,800 as of the first quarter of 2023. That's a 32% increase from 2020, when the median was $329,000.