Personal Finance
4 Surprising Cost of Living Statistics From Across the U.S.
As someone who moved from Los Angeles, California to Springfield, Missouri, I know a thing or two about cost of living expenses and how they differ across various areas of the country. In fact, as you can imagine, it was a big reason why my wife and I chose to move here back in 2015. Since then, cost of living expenses have been an even larger topic in the United States as inflation has affected pricing and remote work means that employees may be able to move to locations where the cost of living is lower.
All of this got me looking at some cost of living data. While doing so, there were a few numbers, figures, and facts that jumped out to me. In turn, I’ve compiled some of my favorite selections that I think will shock you — or at least open your eyes to how impactful cost of living expenses can be.
4 Mind-Blowing Cost of Living Stats and Facts
The average home value in California is $600k more than in Mississippi
With a budget of around $800,000, you could purchase one average home in California… or four in Mississippi. That’s because the average home value (according to Zillow as of September 2024) for California is around $785,000 compared to just $183,000 in the Magnolia State. Yet, that’s not even the largest spread!
Average home values in Hawaii are currently over $858,000 — exceeding The Golden State’s average by more than $70,000. Meanwhile, the state with the lowest average home values is actually West Virginia, coming in just shy of $170,000. That’s a 5:1 ratio if you’re keeping score.
Fortunately for homeowners and unfortunately for prospective buyers, average home values in all four states have been on the rise compared to one year prior. Year over year, California values have increased 6% while West Virginia’s average is up 5.3%. Increases in Hawaii and Mississippi were more modest, coming in at 1.9% and 1.4% respectively.
It should also be noted that these are average home values, not necessarily what homes in those states are currently selling for. Of course, there’s also a large discrepancy on that front, even if it is a bit less pronounced. Looking at median sale price data from June 2024, California’s $746,000 result topped Hawaii by a few thousand dollars. On the other end, West Virgian’s median sale price of $218,000 was a bit less than Mississippi’s $233,000. Still, this means that one could theoretically purchase three homes in either of those two lower-cost-of-living states for a sum that still wouldn’t cover the median price in either of the top states.
As I recently wrote about, housing markets can vary greatly from city to city and even neighborhood to neighborhood — not to mention that other exceptions can always pop up. So, although these generalities may be helpful to point you in the right direction, you also shouldn’t let them discourage you if you are looking to move to one of those “more expensive” areas.
$100 is actually worth less in New Jersey than in New York
This seems backward, right? But, the “real value” as calculated by Go Banking Rates shows that a C-note is worth $91.20 in the Garden State compared to $92.40 across the Hudson. Alas, while many of us just think of the Big Apple when we think of New York, there’s much more to the Empire State. As a result, this “backward” trend continues with additional data.
In New Jersey, the median household income is $97,126 while it’s $81,386 in New York. Also interesting is that the typical home value in Jersey is $513,054 — significantly more than the $425,053 seen in New York. However, when it comes to cost of living expenditures, New York is 14% more expensive than New Jersey ($44,649 annually versus $50,801).
This brings up a pretty important point when it comes to cost of living figures as major metropolitan areas can heavily skew a state’s results in terms of averages. For that reason, if you really want to drill down and see where the most affordable places are (and where your $100 will go furthest), you’ll want to look at more granular data.
By the way, what’s the state where your Ben Franklin bill is worth the most? That would be Arkansas, where it’s really worth $113.40. Compare that to California where you’ll get just $87.50 in value according to the numbers.
Kansas has the lowest cost of living of any Midwestern state
First, I need to acknowledge that defining regions in the United States is difficult. Nevertheless, I’m going to declare with confidence that Kansas is the lowest cost of living index of any state in the Midwest. According to Council for Community & Economic Research data (conveniently served here by the Missouri Economic Research and Information Center), Kansas’s index number was 87 in the second quarter of 2024. For context, the national average is an even 100 while the most expansive state, Hawaii, had an index of 188.4.
The Sunflower State’s index does put it in third behind Oklahoma (which I’m calling a Southern State) at 85.3 and West Virginia’s 84.3. For what it’s worth, neighboring Missouri — which is where I live and where the site behind this map is based — wasn’t too much higher, with an index of 88.6. That landed the Show Me State in seventh overall compared.
So why do I find this particular stat interesting? Well, personally, I would have anticipated that some of the upper Midwestern states might have lower costs of living — especially some of the less populated ones like the Dakotas. In reality, though, North and South Dakota ranked 14th and 13th, respectively.
Also, Wyoming (which either falls into the Western Region or Rocky Mountain Region depending on how specific you’re getting) also had a higher index. The least populated state in the country had an index of 92.8 for a 17th-place ranking. This goes to show that population or lack thereof may not necessarily correspond to lower cost of living conditions.
Massachusetts and Washington are low-key expensive
Going back to that map from the Missouri Economic Research and Information Center, I was taken aback to see that, in addition to California and Hawaii, there was one other state colored in red (denoting an index of over 123.5): Massachusetts. For the record, the District of Columbia also falls in this category but, of course, isn’t a state. Anyway, with an index of 139.9, the Bay State is ranked 49 of 52! That puts it above its Northeastern peers, including New York and New Jersey.
On the other side of the country, Washington (the state, not D.C. this time) ranks 46th. That puts it behind only California and Hawaii on the West Coast. Maybe I’m off base here, but I find both of these particular two rankings to be truly shocking.
What can we learn here? I suppose it’s that you can’t always guess where cost of living expenses might be lower. As a result, if you’re seriously considering relocating, you’ll definitely want to research first rather than assume.
While you don’t have to be a rocket scientist to figure out that states such as California will be more expensive to live in than the likes of Arkansas or that large cities cost more than suburbs and rural areas, the truth is that many of us may take cost of living differences for granted. In my mind, there are a few reasons for this. First, we as humans become accustomed to what we know — so we might not realize that things are different elsewhere.
Secondly, even if we are aware of the discrepancies in the cost of living, it’s often assumed that salaries in more expensive areas make up for the higher costs. Although that’s often true, as mentioned earlier, remote work opportunities have largely turned this concept on its head. Now, more and more Americans could potentially engage in what’s called “geo-arbitrage” — which is a fancy way of saying “living where it’s cheaper while having a high-paying job.”
Overall, while there are several factors that will determine where the best place for you and your family to reside, those looking to move might want to keep some of these cost of living stats and resources in their back pocket. Who knows — perhaps, like us, you too can find a more affordable lifestyle outside of your current state.
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