Cost of Living, City by City

July 05, 2023

Cost of Living, City by City

So many Americans are alarmed by the persistence in the cost of living today. As inflation rises, rent prices rise, and discretionary income declines for those in lower salary ranges, cost is pressuring everyone.

The questions they ask vary from where can I buy a house for less than $300,000, or which cities are affordable, to which cities offer the lowest rent prices vs income levels?

Renters do want to move and so do home owners, yet opportunities are slim, and risks are high.

Renters, entrepreneurs, and long-term vacationers are investigating cities, zip codes and states that offer a lower cost of living. The rising cost of living in the US is a key pain point for everyone, and particularly long-term tenants. The difficulty for those doing their research however is in finding recent data related to neighborhoods and zip codes.

Bureau of Labor Statistics Inflation Report

In May, inflation subsided further, this time down to 3.6% from April’s 4.1% reading. That’s good news but it’s not enough for the FED who are expected to raise the central bank a couple of more times.

That raise will exacerbate the cost of living by making credit more expensive for landlords (mortgages) and food and rent more expensive for tenants. As landlords renew their mortgages in 2024 and 2025, many will have to sell their properties. That’s not good for tenants who may have nowhere to go when forced to vacate the unit.

Inflation rate by month, last 12 months. Screenshot courtesy of BLS.

Inflation growth rate by month, last 12 months. Screenshot courtesy of BLS.

The big issue with rising credit rates, is it makes it tough for business to increase market supply to meet the demands of a growing population.

Cost of Living Index, State by State

The state of Missouri compiled their own list of cost-of-living estimates in the 1st quarter of 2023. They found the New England and West Coast regions had the highest cost of living index rating.

Here are the states with the lowest cost of living:

Cost of Living Index, State by State. Screenshot courtesy of meric.mo.gov/data/cost-living-data-series

Anticipating the Risk of Relocation

Americans are mobile, yet stuck. From locked-in mortgages to zero rental vacancy rates, and massive property taxes to frightening cost of living in destination cities, the frustration is mounting.

And there’s the risk. When houses, apartments are in limited availability and the economy is beginning to recede, change brings risk. That makes everyone hold the fort, if they have one. It’s best to make a serious review of the cost of living in the desired destination before any tenant commits to relocating. Cheap apartment rent is only part of the challenge.

Image Credit: Robert Bye via Unsplash

So when Americans actively view the cost of living, city by city, online as you’re doing, it’s a sign of discontent and a willingness to leave communities and cities and states they actually like. The case of California is on point. Given the employment and career opportunities, technology, climate and lifestyle benefits, it would have to be particularly negative if Californians were to leave.

But then again many are leaving for Florida, Texas, Nevada, Tennessee and other locales after selling their high-priced homes. Relocators show their improvement of lifestyle and affordability is appreciated afterward. Why suffer in an ultra-priced city and state when you can live for half the price somewhere else?

Many are leaving the Golden State due to high property prices, high rents, high food and some of the highest property taxes in US along with relentless regulations that make business impossible.

Searching for the Right City Profile

To prepare for their exit, movers are looking at cities with a lower cost of living, but also good job markets, lifestyle benefits, low crime, quality schools, modern infrastructure and more.

So the question is more than just which cities offer the lowest cost of living. Living in the bush in Alaska might provide the lowest cost of living. It’s the ongoing lifestyle value that’s driving decisions, something for landlords to be aware of.

Helpful Cost Comparison Websites

There are some helpful websites you can access to learn more.

Numbeo (numbeo.com/cost-of-living/prices_by_city.jsp) offers comparisons by apartment price, house price, rent prices, type of food, transportation, clothing, and utility bills.

Salary.com (salary.com/research/cost-of-living) has a cost of living calculator geared to your salary, comparison from your current location to where you’d like to relocated to and a review for each US state and city.

Numbeo Cost of Living City by City. Screenshot courtesy of Numbeo.

Only Hamilton, Bermuda tops the most expensive US cities to live in. New York, Honolulu, San Francisco, Oakland, Seattle, San Jose, and San Diego top the list. These cities are plagued with a lack of developable land which makes real estate, taxes, and all costs are much higher and hard to fix.

Rental Vacancy Rates Region by Region USA

Rental Vacancy Rates region by region, USA. Screenshot courtesy of Census.gov

What’s Included in Cost of Living Calculators?

What’s included in various cost-of-living calculators can actually skew numbers one way or another. For renters considering moving to an urban location, transit, rent prices and food prices might be the dominant factors, so a worthy calculator should be customizable for the interests of renters.

Typically in a cost of living calculator, you will see these factors listed:

Transportation (gasoline, car repairs, parking, tolls)
Food (grocery stores and restaurants)
Entertainment (beverages, movie tickets, cable TV, internet fees, sporting events, food)
Healthcare (insurance premiums, medication, doctor fees)
Housing Costs (price of homes, mortgage rates, property taxes, utilities)
Rental Costs (rent prices, utilities)
Employment (job types, industries, salaries, unemployment rate, proximity to work)
Education (quality and type of K13, specialized colleges and universities)

Please do raise your concerns about the cost of living with NARPM, NAA, and your elected representative.

See more on rent prices, city by city, home prices city by city, along with our checklist for movers. Review the rental housing reports on Nashville, Atlanta, Las Vegas, and major trends in the housing market.