Whether you’re planning your next move, or if you’re worried about the cost of living growing in your own state, it’s important to know what states are the most expensive.
Not only should you know what states are the most expensive, but you should also know what exactly makes them expensive. For example, salaries might be lower in Texas compared to New York, but with no state income tax, the cost of living balances out.
While it can all seem overwhelming, don’t worry, because we did the math and gathered a list of the most expensive states to live in. Read on to learn more.
How We Calculate the Most Expensive States to Live In
To calculate the most expensive states to live in, we’ve looked at data, news articles, and much more. That said, what it comes down to is the following:
- The cost of housing
- Impact of income taxes
- Property tax rates and how they’re calculated
- The cost of goods including groceries, restaurants, and general services
- Median salary compared to the cost of living
Aside from these factors, you also have to consider moving to or from a state with a high cost of living. In these cases, we recommend using this moving cost calculator.
It’s one of the best online tools you can use and factors in many of the calculations we take into account when ranking the most expensive cities to live in.
1). Hawaii
Hawaii is by far one of the most expensive states to live in. Moving there will cost you a fortune and the limited housing situation drives up the price of real estate and rent. Due to being on an island far off the coast of California, most goods are more expensive in Hawaii than in the rest of the United States. This can make a grocery bill double what it costs somewhere else! The tourist situation also drives up the cost of living.
What’s more, Hawaii also has a state income tax, property tax, and other taxes you have to pay. This can make the cost of living seem even higher, even if you have a nice salary.
2. California
When it comes to cost, California is among the highest for housing, groceries, amenities, and just about everything else – except for maybe shipping. The high prices are based on the desirability of the area, along with proximity to Hollywood, the Pacific coast, and the temperate climate. Cities like Los Angeles, San Francisco, and San Diego are the most expensive places to live in California, with their suburbs not too far behind.
High income taxes, property taxes, business taxes, and skyrocketing rent and housing prices make it hard for people to survive in California’s most expensive pockets as well. The only reason California isn’t ranked number one is because there are some pockets of affordable places to live.
3. New York
New York is another expensive state, and a lot of the high prices come from the five boroughs (New York City), which is one of the most expensive and populated cities on the planet. Unfortunately, the prices don’t get much more forgiving when you move out of the city, with real estate prices on Long Island skyrocketing. Furthermore, property taxes and state income taxes drive up the cost of living in New York even further.
The only reason New York isn’t ranked higher is due to the low cost of living areas upstate. For example, some houses in Oswego County are selling for less than $100,000, which is unheard of elsewhere in New York.
4. Massachusetts
Believe it or not, Massachusetts ranks among the most expensive states to live in due to the cost of groceries. You’ll have one of the highest grocery bills in the country, along with high taxes, expensive rent, and expensive real estate. This makes moving to Massachusetts without a lot of money or a high-paying job very challenging.
Massachusetts also has expensive cities, with Boston being close to New York City, Los Angeles, and even Miami in rent prices. Plus, when you venture out towards Cape Cod and other coastal towns, the price doesn’t get much better.
5. Alaska
Alaska is another expensive state and one we were shocked to learn about. What makes this state expensive is how far it is from other states, so most goods have to be flown in or shipped at great distances. This makes groceries in Alaska expensive compared to other states – more so than Hawaii. Alaskan houses are also 26% more expensive than other houses (on average), and Anchorage is among the most expensive cities to live in.
That said, there are some pockets of affordable housing in Alaska when you venture out towards the frontier.
Understanding the Most Expensive States to Live In
In this article, we covered the most expensive states to live in, so now you can make a choice whether you want to move to or away from one of these states. Even if you don’t plan on moving to one of the states we covered, knowing which states cost the most is always helpful.
