Most Expensive States to Live in 2024
Defining Expensive States
The United States has the world’s 26th most expensive cost of living. However, the cost of everyday expenses varies widely from state to state.
The cost of living includes all expenses that cover a person’s needs, including food, housing, healthcare, and transportation. Costs of living can vary widely from state to state, with the highest found in major metropolitan areas. The most expensive states to live in are located in the Northeast, on the Pacific Coast, and in non-contiguous states.
Housing costs drive the cost of living expenses since this is where Americans spend the largest portion of their income. Thus, areas where competition for housing is high will be the most expensive. Other factors that impact the cost of living include transportation costs, proximity to resources, childcare costs, and local taxes.
The cost of living index compares prices across states to better understand where they are the most expensive. The index uses the average cost of living in the U.S. as a baseline of 100. Expenses can be compared to this baseline to understand relative costs in different parts of the country. Any index above 100 represents a cost of living higher than the national average. The higher the index, the less a dollar will stretch.
The Cost of Living in the United States
To better understand the relative cost of living in the most expensive states, it’s helpful to have a better picture of the average costs in the nation. The average American household spends $61,334 a year to cover their expenses. Americans spend an average of $1,784 a month, nearly 35% of their income, on housing. The median price of a single-family dwelling in the United States is $273,992. The average cost of renting a two-bedroom apartment is $1,164 a month.
The average American household spends another 16%, or $9,826, on transportation. Annual healthcare costs are an average of $5,177 a year. Groceries and eating out cost the average American household $7,317 a year or $609.75 a month. Utilities cost an average American family $370.16 each month.
The average family of four in the United States requires $68,808 a year to cover their basic necessities like shelter, food, healthcare, and childcare. The median household income in the United States is $67,521 a year.
When determining the most expensive states in the United States, a cost of living index is used to compare prices to the national average. However, costs alone do not tell the whole story. While the most expensive states to live in may have the highest dollar cost, local wages may be adequate for a high quality of life despite a high cost of living.
The Most Expensive States to Live
| State | COLI Index |
|---|---|
| Hawaii | 179 |
| District of Columbia | 148.7 |
| Massachusetts | 148.4 |
| California | 134.5 |
| New York | 125.1 |
| Alaska | 124.4 |
| Maryland | 119.5 |
| Oregon | 115.1 |
| Washington | 115.1 |
| New Hampshire | 115 |