Living in the top 10 most expensive cities in the US comes with a price, but people have reasons for choosing these costly places. Some seek better job opportunities, great weather, or a cosmopolitan lifestyle with abundant dining, culture, and entertainment options.
However, isolation can also drive up costs in some places, where goods have to travel long distances, leading to higher prices. It’s worth noting that recent inflation, the worst in 40 years, has made these expensive cities even pricier.
Interestingly, there’s a silver lining amidst rising prices. Research by economist Edward Wolff suggests that inflation has unexpectedly benefited middle-class households by helping reduce wealth inequality.
While these macro-level insights might not provide immediate relief to city dwellers grappling with soaring expenses, they offer a glimmer of hope amid budget constraints.
To assess the true cost of living in these cities, we rely on data from the Council for Community and Economic Research. Their cost of living index compiles prices for various items in 265 urban areas, including housing, groceries, utilities, transportation, healthcare, and miscellaneous services.
We also consider factors like household incomes, home prices, and unemployment rates to provide a comprehensive view of local living costs.
What you'll learn:
🔟 Oakland, California
- Cost of living: 45.9% above the U.S. average
- City population: 433,797
- Median household income: $82,236
- Median home value: $848,600
- Unemployment rate: 4.2%
Oakland is situated at one corner of what seems like a Bermuda Triangle around San Francisco Bay, where affordable prices are hard to come by. To its west, you have San Francisco, renowned for its exorbitant real estate prices and famous landmarks like Alcatraz and Fisherman’s Wharf. To the south, Silicon Valley beckons, home to tech giants that offer six-figure salaries like Halloween candy.
While Oakland might appear more affordable compared to its pricier neighbors, consider this: even though the median household income in Oakland is 18% higher than the national average, median home values are three times the U.S. median.
The costs of rent and other housing-related expenses are similarly steep, nearly tripling the national average. Groceries, utilities, transportation, and healthcare expenses all run about a third higher than what the average American pays.
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9️⃣ Boston, Massachusetts
- Cost of living: 49.7% above the U.S. average
- City population: 654,281
- Median household income: $79,283
- Median home value: $659,700
- Unemployment rate: 3.5%
Boston boasts an unparalleled array of universities, hospitals, historic sites, and opportunities in tech and biotech, making it a highly desirable place to live. While the city’s popularity comes with a steep price tag, it’s not as astronomical as some other East Coast cities that frequently come up in conversations about high living costs.
Boston accommodates a high concentration of students, recent graduates, and young professionals who need some degree of affordability as they begin their careers. Groceries, for instance, are “only” 14% more expensive than the national average. Healthcare costs run 20% higher than the typical American’s expenses, and miscellaneous goods and services are 21% pricier.
However, housing-related expenses are a significant challenge, standing 124% above the national average. Renters and homeowners both pay more than double the national average for their accommodations.
For example, the average monthly rent for an apartment in Boston is $3,747, compared to the national average of $1,369, according to C2ER. The average price of a Boston home is $921,897, while the national average is $452,510.
To compound the financial burden, Massachusetts isn’t particularly tax-friendly for middle-class families or retirees.
8️⃣ Seattle, Washington
- Cost of living: 49.9% above the U.S. average
- City population: 733,904
- Median household income: $110,781
- Median home value: $848,100
- Unemployment rate: 2.3%
Just a few years ago, Seattle’s economy sizzled like its coffee, driving up prices significantly. While COVID-19 provided a brief respite from the continuous cost hikes, Seattle remains one of the nation’s most expensive cities.
The reason is apparent. As a major tech industry hub, Seattle is flooded with high-paying jobs. Both Microsoft (MSFT) and Amazon.com (AMZN) call this area home, along with numerous smaller high-tech companies.
As is the case in every city on this list, housing costs are the primary culprits behind Seattle’s steep living expenses. Housing-related expenses, including insurance, are more than three times the U.S. average, according to C2ER.
However, the high prices don’t stop there. Groceries, transportation, healthcare, and miscellaneous goods and services all range from 24% to 32% higher than what the typical American pays. Surprisingly, utilities are only about 5% above the national average.
While Washington state’s taxation policies for retirees present a mixed picture, it is one of the most tax-friendly states for middle-class families.
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7️⃣ Los Angeles, California
- Cost of living: 50.6% above the U.S. average
- City population: 3,849,306
- Median household income: $70,372
- Median home value: $812,800
- Unemployment rate: 5.4%
Los Angeles, a city known for its excess and glamour, extends far beyond the realm of Hollywood and Rodeo Drive shopping. Despite being one of the priciest U.S. cities to reside in, the median annual incomes in L.A. are only marginally higher, at $655 above the national average.
Yet, the allure of the nation’s second-largest city remains irresistible. From Hollywood and Beverly Hills to Venice Beach, L.A. boasts an array of famous locales. For those seeking cultural richness beyond the glitz, the city is home to numerous vital museums and the world-class Los Angeles Philharmonic.
However, brace yourself for the city’s infamous traffic, which contributes to transportation costs soaring 29% above the national average. While groceries, utilities, healthcare, and miscellaneous goods and services are only moderately more expensive, ranging from 12% to 17% above the U.S. average, housing expenses are the true budget drain.
Housing-related costs, encompassing rents and mortgages, run nearly 140% above the national average in Los Angeles. For instance, the average home price in L.A. stands at $1.1 million, compared to the national average of $452,510. Meanwhile, the average rent is 2.3 times higher than the U.S. average.
Lastly, the City of Angels grapples with an elevated unemployment rate, standing above 5%.
6️⃣ Orange County, California
- Cost of living: 51.2% above U.S. average
- County population: 3,167,809
- Median household income: $100,559
- Median home value: $832,300
- Unemployment rate: 3.4%
Orange County, commonly known as The O.C., is synonymous with affluence, even inspiring a TV series in the 2000s. This region, located to the southeast of Los Angeles, encompasses several major cities, including Anaheim, Santa Ana, and Irvine.
However, it’s the smaller, upscale communities like Newport Beach, where the median home value reaches $2 million, that cement Orange County’s reputation as a haven for Southern California’s wealthiest and most renowned residents.
The average home price across Orange County is $1.2 million, making it the fifth priciest market in the country. Interestingly, apartment rents are just slightly more than double the national average, at $2,919 per month.
On the whole, housing in The O.C. costs 156% more than the typical American’s expenses. Other budget pressures include groceries, about 12% pricier than the national average, and transportation, which runs 29% higher. Conversely, healthcare costs are slightly lower than the national average, and utilities are approximately 10% cheaper.
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5️⃣ Washington, District of Columbia
- Cost of living: 52.2% above U.S. average
- City population: 670,050
- Median household income: $90,088
- Median home value: $669,900
- Unemployment rate: 4.9%
The nation’s capital, Washington, D.C., presents a tale of two cities when it comes to living expenses. Housing-related costs, encompassing rents and mortgages, stand out as the most substantial burden, at 2.5 times the national average, according to C2ER. However, other expenses are relatively manageable. In fact, D.C.’s healthcare costs are slightly below the national average.
Groceries run about 9% above the national average, while utilities are approximately 12% more expensive. Miscellaneous goods and services are pricier by 19%. Fortunately, transportation costs are not excessively onerous, at less than 9% above the U.S. average.
An extensive bus and metro system in the District of Columbia keeps transportation affordable, with options like the DC Circulator bus, which costs just $1 and serves popular destinations including Georgetown, Union Station, and the National Mall.
Additionally, numerous museums and historical sites in the city are free to visit.
Despite these advantages, the average home price in D.C. stands at $1.2 million. Meanwhile, the average rent for an apartment is $3,320 per month, which is $1,851 more than the U.S. average.
4️⃣ Brooklyn, New York
- Cost of living: 68.6% above U.S. average
- Borough population: 2,641,052
- Median household income: $67,567
- Median home value: $793,300
- Unemployment rate: 5.8%
Technically one of New York City’s five boroughs, Brooklyn has, over the past couple of decades, emerged as a thriving metropolis in its own right. In fact, if Brooklyn were an independent city, its population would rival Chicago, the nation’s third-largest city.
Once considered an affordable alternative to Manhattan, Brooklyn has now become a place where housing costs are nearly four times higher than the national average. Surprisingly, despite these high living expenses, the median household income in Brooklyn is actually lower than the U.S. median, falling nearly $17,000 short of Manhattan’s median income.
However, it’s not all budget-busting expenses in Brooklyn. Healthcare and utilities costs are only about 6% higher than their respective national averages, while transportation expenses are just 14% above the U.S. average. Groceries and miscellaneous goods and services, on the other hand, are both roughly 25% more expensive than their U.S. averages.
Adding to the financial challenges for Brooklyn residents is New York’s reputation as one of the least tax-friendly states for both retirees and middle-class families.
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3️⃣ San Francisco, California
- Cost of living: 78.6% above U.S. average
- City population: 815,201
- Median household income: $121,826
- Median home value: $1,306,400
- Unemployment rate: 2.9%
San Francisco, driven by a booming tech industry and high-paid workers, boasts some of the nation’s highest living costs, making it a challenging place to make ends meet even with substantial paychecks.
Housing is the major contributor to these high costs, with an average home price reaching a staggering $1.5 million in San Francisco, the highest among the 11 most expensive U.S. cities.
Renters in the city don’t fare much better, with an average monthly apartment rent of $3,585, 2.6 times the national average. In fact, housing-related expenses in San Francisco are over four times greater than the national average.
Moreover, grocery bills, utilities, healthcare, and transportation expenses all run anywhere from 30% to almost 40% higher than what the typical American pays. Miscellaneous goods and services are also nearly a quarter more expensive than the national average.
2️⃣ Honolulu, Hawaii
- Cost of living: 84.0% above U.S. average
- City population: 345,532
- Median household income: $73,434
- Median home value: $733,000
- Unemployment rate: 3.2%
Living in Honolulu, a remote Pacific paradise, comes at a premium due to the necessity of shipping most goods to the island, either by boat or plane, substantially driving up prices.
Honolulu boasts the highest grocery prices among all 265 urban areas surveyed by C2ER. For instance, items like milk and bananas cost nearly twice the national average, while potatoes are about three times more expensive. On the whole, a typical supermarket visit costs 50% more than it would on the mainland.
Bills take a significant chunk out of residents’ paychecks too. Utilities cost 41% more than mainland expenses, transportation is 25% pricier, and healthcare expenses are over 18% higher.
However, the most significant budget strain in Honolulu is housing, with housing-related costs exceeding three times the national average. The average home price in Honolulu stands at a daunting $1.6 million.
On a positive note, Hawaii is known for being tax-friendly for middle-class families and retirees.
1️⃣ Manhattan, New York
- Cost of living: 127.7% above U.S. average
- Borough population: 1,576,876
- Median household income: $84,435
- Median home value: $940,900
- Unemployment rate: 4.8%
Manhattan, New York’s most expensive borough, is not just costly to visit but even more so to live in. With limited space and prime location, Manhattan’s median home value ranks second only to San Francisco among the most expensive cities in the U.S.
Apartment rents in the borough average a staggering $4,569 per month, surpassing all other cities tracked by C2ER. Meanwhile, the average home price in Manhattan stands at $2.4 million.
Beyond housing, Manhattan residents face a premium of 35% on groceries, while transportation costs run 16% above the national average. Miscellaneous goods and services are 37% more expensive, with activities such as going to the movies costing 60% more for a ticket and yoga classes nearly double the national average.
Furthermore, Manhattan is densely populated, hosting almost 70,000 residents per square mile, significantly higher than cities like San Francisco, which is known for its population density but still only houses 17,376 residents per square mile according to the U.S. Census Bureau.
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