Abigail Tierney
Research expert covering U.S. politics and economics
Cost of living in the U.S.- statistics & facts
The cost of living refers to the monetary cost of goods and services necessary to maintaining a certain standard of living. The cost of living usually changes overtime and there are various methods to measure the cost of living across different geographic areas. The OECD price level index, for example, is used to compare the cost of living across different countries. For the most meaningful comparisons across countries, costs should be measured using purchasing power parity rates.
As one of the largest countries in the world, there are significant cost of living disparities between different states and geographic areas in the United States. In both Maryland and Washington D.C., the median household income in 2023 exceeded 105,000 U.S. dollars. Families in these states can also expect to pay some of the highest rates for housing or services such as child-care. At the other end of the spectrum, households in Louisiana and Mississippi saw median household incomes closer to the 50,000-dollar mark. Accordingly, Mississippi had one of the lowest cost of living index scores in the United States at 86.3.
With many people priced out of homeownership opportunities, the number of renters in the U.S. has also increased. Despite the fact that renting is a greater monthly expense than a mortgage payment in many states, the soaring rates of down payments has many unable to pay large sums of money upfront, especially for millennials who have been held back both by student loan debt, and recent dramatic increases in monthly rent. Americans looking for a studio apartment can expect to spend more than 1,000 U.S. dollars per month on average, making it even more difficult to put money aside to save for eventual homeownership.
As one of the largest countries in the world, there are significant cost of living disparities between different states and geographic areas in the United States. In both Maryland and Washington D.C., the median household income in 2023 exceeded 105,000 U.S. dollars. Families in these states can also expect to pay some of the highest rates for housing or services such as child-care. At the other end of the spectrum, households in Louisiana and Mississippi saw median household incomes closer to the 50,000-dollar mark. Accordingly, Mississippi had one of the lowest cost of living index scores in the United States at 86.3.
Calculating the cost of living
The Consumer Price Index (CPI) is one of the most used indices to track price changes of consumer goods over time. The CPI for all urban consumers in the U.S. has seen year-on-year growth almost every year for the last three decades, growing the most dramatically between 2020 and 2023. While CPI is a useful tool for tracking price changes for a collection of goods over time, different goods are impacted by inflation at different rates.Housing
Housing is one of the most important and necessary monthly expenditures for residents of any country. In the U.S., just over 65 percent of Americans own their home. This is a rate that has recovered slightly from the 2008 financial crisis, before which nearly 70 percent of Americans owned their home. Average house prices of new homes sold in the U.S. have skyrocketed over the last decades with preliminary data for 2023 showing the average sale price of a new home was 511,100 U.S. dollars.With many people priced out of homeownership opportunities, the number of renters in the U.S. has also increased. Despite the fact that renting is a greater monthly expense than a mortgage payment in many states, the soaring rates of down payments has many unable to pay large sums of money upfront, especially for millennials who have been held back both by student loan debt, and recent dramatic increases in monthly rent. Americans looking for a studio apartment can expect to spend more than 1,000 U.S. dollars per month on average, making it even more difficult to put money aside to save for eventual homeownership.
Abigail Tierney
,
Mar 13, 2025
Abigail Tierney
Research expert covering U.S. politics and economics
