In this article, we look at the 20 most expensive US states to live in. If interested, you can also read our recent piece on the 20 States with Highest Minimum Wage and Low Cost of Living.
Consumers in the United States are experiencing the impact of burgeoning prices like never before. The cost of living in the country has increased considerably since the advent of the coronavirus pandemic. According to a report by Bloomberg in November last year, goods that cost $100 before the pandemic were now worth around $120. Prices have surged over the last three-to-four years by nearly as much as they did in a decade prior to Covid-19.
A survey conducted by the Bank of America Corporation (NYSE:BAC) in September 2023 highlighted that 67% of the employees felt that inflation was rising quicker and higher than their salaries were, reiterating the stressful impact the cost of living crisis has had on Americans. The figure was up from Bank of America Corporation (NYSE:BAC)’s last survey held in 2022, in which it was measured at 58%. In order to ensure the financial wellness of its employees, the company announced to increase its minimum wage from $22 to $23 last year, and plans on raising it further to $25 by 2025. The move would enable all employees of Bank of America Corporation (NYSE:BAC) to earn at least $48,000 per annum.
Another company that has been active in making cost of living adjustments to employees’ wages and salaries is Amazon.com, Inc. (NASDAQ:AMZN), which in September last year, announced to raise the hourly wage of its delivery and warehouse workers from $19 to $20.5 per hour. Amazon.com, Inc. (NASDAQ:AMZN) has been working to improve the financial well-being of its employees for quite some while now, starting first in 2018, when it raised the company’s minimum wage to $15 per hour, which at the time was double than that of the federal minimum wage in the United States. While declaring the increase in wage then, Amazon.com, Inc. (NASDAQ:AMZN) also stated that it would engage policymakers in Washington and across the country to increase their minimum wage levels.
While some companies are making the right moves by increasing wages, a lot of others are just not able to do so due to the financial challenges facing them. In 2022, Microsoft Corporation (NASDAQ:MSFT) doubled its merit increases for certain employees, but a year later in May 2023 held back on raising salaries for full-time employees citing economic challenges and business priorities. The salary freeze has continued at Microsoft Corporation (NASDAQ:MSFT) for well over a year now. However, the company’s executive vice president of Microsoft’s cloud and AI group, Scott Guthrie, stated this month that Microsoft Corporation (NASDAQ:MSFT) was considering resuming performance-based increments for some employees.
Similarly, Intel Corporation (NASDAQ:INTC) in February last year cut salaries of its employees after a loss in market share and a lower sales forecast. The deduction ranged from 5% for mid-level employees to 25% for top executives, including Intel Corporation (NASDAQ:INTC)’s chief executive Pat Gelsinger, whose salary also got slashed. Hourly wage workers, however, remain unaffected.
By the way, before we dive deep into the list of the costliest states in the US to live in, you can also read about 20 Countries With The Cheapest Cost Of Living For US Citizens.
Pixabay/Public Domain
Methodology
The most expensive US states to live in are ranked in ascending order of their cost of living index. The cost of living index reflects the differences in prices of goods and services across regions or times in comparison to the national average. For instance, if a product costs $100 on average in the United States, and costs $120 in New York, the state of New York would have a cost of living index of 120.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
Let’s now head over to the list of the most expensive states in the US.
20 Most Expensive US States To Live In:
20. Delaware
Cost of Living Index: 102.1
We begin with Delaware, where the overall cost of living is slightly higher than the United States on a whole. Grocery, transportation, and healthcare is particularly expensive in the state, while housing and utilities are on the lower side compared to the national average.
19. Virginia
Cost of Living Index: 102.9
The cost of living in Virginia is nearly 3% higher than the national average. However, this is offset by the state’s annual median household income of $87,249, which is approximately 17% higher than the national median household income per annum in the United States.
18. Montana
Cost of Living Index: 103.1
Montana is among the most expensive US states to live in. A transport ride that costs $100 elsewhere in the US would cost 9% higher in the state. Housing and grocery prices are also on the higher side in Montana. Utilities, however, are on the cheaper side in the state, costing 7.5% lower than the national average in the United States.
17. Utah
Cost of Living Index: 103.4
Next on our list of the most expensive US states to live in is Utah, where according to Expatistan, a family of four has an average monthly expense of $5,162. It is one of the costliest states in the country, with housing nearly 11% higher than the national average in the United States. Healthcare, however, is cheaper in the state; a medical bill of $100 anywhere else in the country would only cost $91 in Utah.
16. Colorado
Cost of Living Index: 105.6
The cost of living in Colorado is nearly 6% higher than the national average in the United States. According to the Colorado Property Group, the cost of living per year in the state is approximately $53,374. One area of respite for the consumers is utilities, which are around 9% cheaper than the national average.
15. Arizona
Cost of Living Index: 107.9
Arizona is among the most expensive US states to live in, with the cost of living close to 8% higher than the national average. Housing in particular is quite costly in the state, having an index of 124.1. However, utilities and healthcare are much more affordable in the state, with indices of 95.3 and 93.8 respectively, according to the Missouri Economic Research and Information Center (MERIC).
14. Maine
Cost of Living Index: 109.2
Grocery, housing, utilities, transportation, and healthcare are all between 5-20% more expensive in Maine than the national average in the United States. It is one of the costliest states in the US.
13. Rhode Island
Cost of Living Index: 110.4
While transportation is relatively (7.5%) cheaper in Rhode Island than the national average, expenses related to housing, transportation, grocery, utilities, and healthcare are generally on the higher side. Therefore, the state has a 10.4% higher cost of living index than the United States on the whole and ranks among the costliest states in America to live in.
12. Connecticut
Cost of Living Index: 112.1
Housing in Connecticut is around 23% higher than the national average, while the price of utilities is also over 30% more. It is one of the most expensive US states to live in.
11. New Jersey
Cost of Living Index: 114.2
New Jersey is the eleventh most expensive state in the US to live in, with a cost of living index of 114.2. Compared to the national average, housing is 35.8%, utilities 8.3%, and transportation 4.7% more expensive in the state.
10. New Hampshire
Cost of Living Index: 115.1
New Hampshire is one of the most expensive states in the United States to live in. A major cause of this is the surging prices of houses and rental rates, which stem from the state not having enough houses to meet demand. The state’s cost of living index was measured at 115.1 in 2023. Housing and transportation remained between 9-10% higher than the national average, while utilities were 31% higher.
9. Oregon
Cost of Living Index: 116.6
Next up is Oregon, where the average home price is over $660,000, according to The Observer. What makes the state so costly to live in is its housing, gasoline prices, and the state’s growing reputation as a major business hub – which has led to an influx of well-paid talented professionals from across the country, resulting in higher property prices and rentals.
8. Vermont
Cost of Living Index: 117.1
Vermont is one of the most expensive US states to live in with a cost of living index of 117.1. The costliest of all is housing in the state, with an index of 133.1. The price of utilities is also 20% higher than the national average. However, the costs associated with transportation and healthcare tend to hover around the average.
7. Washington
Cost of Living Index: 117.3
While the cost of utilities continues to remain on the lower side, the cost of housing, grocery, transportation, and healthcare has been on a steady rise in Washington for some years now. As a result, its overall cost of index is 16% higher than the national average in the United States.
6. Maryland
Cost of Living Index: 117.8
The cost of housing is surging in Maryland, and in 2023 was 46.4% higher than the national average. Expenses related to groceries and utilities also remain on the higher side. It is one of the most expensive US states to live in.
5. Alaska
Cost of Living Index: 119.1
The primary reason behind Alaska’s high cost of living is its scarce farmland, comprising less than one million acres, which has meant that much of the food in the state comes from other regions in the United States. Groceries are 23%, utilities 58%, and healthcare 48% more expensive in Alaska than America’s national average.