Cost of Living by State: All 50 States Compared

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The cost of living by state ranges widely. In the Missouri Economic Research and Information Center (MERIC) composite index for 2025, Oklahoma is the cheapest state to live in, with a score of 84.7. Hawaii is the most expensive, at 183.9. Hawaii is also the state with the highest home prices: its median home value is $875,900 in the Census Bureau’s 2024 American Community Survey (ACS), nearly four times Oklahoma’s $222,100.

A household moving from one end of the scale to the other faces more than twice the overall price level and roughly four times the housing cost, enough to change whether a down payment, a retirement budget or a career move is realistic. Cost is a real factor in migration: nearly 15 million Americans relocated last year, many of them chasing lower costs.

How a State Cost-of-Living Index Works

A cost-of-living index compares prices in each state against a national baseline set at 100. A score below 100 means the state is cheaper than the U.S. average. A score above 100 means it is more expensive. The distance from 100 reads directly as a percentage:

• 84.7 (Oklahoma): prices about 15% below the national average
• 148.5 (Massachusetts): prices about 48.5% above it
• 183.9 (Hawaii): prices about 84% above it

The composite score combines subindexes for categories such as housing, groceries, utilities, transportation and healthcare. Each subindex uses the same baseline of 100, so a state can sit near average on groceries while far above average on housing. That is why the composite alone can mislead. Oklahoma’s housing subindex is 68.8, about 31% below average, which does much of the work in pulling its overall score down. Hawaii’s housing subindex is 299.0, roughly three times the national level.

Two limits matter when you read any ranking built on an index like this.

A statewide score is an average. It blends expensive metro areas with cheaper small towns. A state near the middle of the ranking can contain cities that cost far more than its score suggests, and an expensive state can contain affordable areas.

The categories are prices of goods and services, not taxes. State income, sales and property taxes are a separate layer of cost, and so are state taxes on retirement income. Two states with similar index scores can leave very different amounts in your pocket once taxes are counted, and the income adjustment below ignores them too. If income tax is a deciding factor, see the states with no income tax.

The Cheapest States to Live In

The five most affordable states in the 2025 MERIC index are:

1. Oklahoma (84.7)
2. Mississippi (86.0)
3. West Virginia (88.0)
4. Alabama (88.1)
5. Kansas (88.4)

The cheapest states cluster almost entirely in the South and the Midwest, and the pattern holds across groceries, utilities, transportation and healthcare.

Housing is where the gap becomes concrete. With Oklahoma’s median home value at $222,100, a 10% down payment comes to about $22,200. The same 10% on Hawaii’s median home is about $87,600. (This is a simple illustration: it assumes a home bought at each state’s median value and ignores closing costs, mortgage insurance and local price differences.) A buyer who has saved $25,000 is near the threshold for a median home in Oklahoma and far from it in Hawaii.

When a Cheap Ranking Hides Rising Prices

Tennessee shows why the composite score and the housing market can tell different stories. Its composite index of 90.1 puts it among the 10 most affordable states. Yet its median home value has climbed to $332,600, well above Oklahoma’s, after years of rising demand as more people moved in. An index captures prices at one point in time, so a state that ranks cheap today can become less so if inbound migration keeps pushing up housing costs.

The Most Expensive States to Live In

At the top of the ranking, the gaps are wider than at the bottom. Hawaii leads by a large margin with a composite score of 183.9. It is followed by:

• Massachusetts (148.5)
• California (143.1)
• District of Columbia (137.8)
• New York (125.8)

The District of Columbia is not a state but is ranked alongside them. Massachusetts, sometimes assumed to be the most expensive state, sits second, about 35 points below Hawaii.

The spread is not symmetric: the cheapest states are moderately below average, while the most expensive can be dramatically above it. Most of that asymmetry comes from housing.

The State With the Highest Home Prices

Hawaii’s median home value of $875,900 is the highest of any state, and its median monthly rent of $1,942 is the second highest, so renting does not offer a clear escape from its housing costs.

California’s housing subindex of 199.4 is about double the national average. That figure reflects decades of difficulty expanding the state’s housing supply. California also has the highest median gross rent of any state, $2,104 per month. For a renter, that makes California the most expensive state on that single measure, even though Hawaii is more expensive overall. In 2025, California was the top state for outbound moves in North American Van Lines’ migration data, with housing costs and the overall cost of living cited as primary reasons.

So a renter comparing Hawaii and California should look at rent, where California is higher, and a buyer at home values, where Hawaii is higher. The composite index blends both into one housing number.

Why Some Places Have a Higher Cost of Living

Housing drives the largest share of local cost differences, so the factors that move housing prices explain most of the ranking.

Supply. When a state adds homes more slowly than demand grows, prices and rents rise. California’s long-running shortage is the clearest case.

Demand and migration. People moving in compete for the existing stock. Tennessee’s rising home values alongside a still-low composite score show demand working its way into prices.

Incomes. Higher local incomes let residents bid more for housing and services, which raises prices for everyone in that market, including people who don’t earn those incomes.

Other categories (groceries, utilities, transportation, healthcare) vary too, but none produce gaps on the scale of Hawaii’s 299.0 housing subindex against Oklahoma’s 68.8.

The Salary Illusion: Income Versus Cost of Living

A high-cost state often pays more, so comparing prices alone overstates the difference in living standards. A rough way to compare purchasing power is to divide median household income by the state’s composite index (expressed as a decimal):

Adjusted income = median household income ÷ (composite index ÷ 100)

The result estimates what a typical household’s income would be worth at national average prices. Using Census median household incomes:

Massachusetts’ median household earns nearly $39,000 more than Oklahoma’s, yet after adjusting for prices it has less purchasing power.

The calculation works in the other direction, too. New Jersey has a composite score of 115.3, which places it among the more expensive states. Its median household income of $104,294 is among the highest of any state, trailing only Massachusetts and the District of Columbia. The same formula gives an adjusted income of about $90,500, well above both Oklahoma and Massachusetts, because its incomes outpace its prices.

How to Use the Ranking to Choose a State

A ranked list tells you where prices are lowest. It does not tell you where you would be better off. To turn the ranking into a decision:

1. Start with your housing situation. If you rent, compare rents. If you plan to buy, compare home values and the down payment each would require. If you already own outright, housing costs carry less weight and other categories matter more.
2. Look at the subindexes that match your budget. A household with high medical spending should weigh healthcare costs. A long-distance commuter should weigh transportation.
3. Estimate your income in each state. Divide the income you would actually earn by the index, as shown above, rather than comparing prices in isolation.
4. Add taxes separately. Income, property and sales taxes are not part of the price categories and can shift the result.
5. Narrow to the area, not just the state. Check costs in the specific city or county you are considering.
6. Consider the trend. A state with rising home values, such as Tennessee, may not stay cheap by the time you buy.

Affordability for Retirees by Region

For retirees, the cheapest states are still mainly in the South and Midwest, but the index applies differently. Retirees usually live on fixed or semi-fixed income, so a higher-paying state no longer offsets higher prices, and the raw index matters more.

The categories also carry different weights in retirement. A retiree who owns a home outright is less exposed to housing costs, the main source of differences between states, but remains exposed to property taxes. Healthcare becomes a larger share of spending for many older households, so that subindex deserves more attention than the composite alone gives it.

The Bottom Line

Anyone weighing a move, a home purchase or a retirement budget should treat the state ranking as a starting point. Compare rents or home values for your situation, divide your expected income by the index, and add income, property and sales taxes separately. Then check the specific city or county and its housing trend, since a state like Tennessee can rank cheap while its home values keep rising.