The 20 Most Expensive States to Live in the U.S.
The cost of living has been steadily rising in the United States. According to The Guardian, the inflation rate rose to 6.8% in 2021, after nearly 40 years. The inflation rate was attributed to certain factors such as supply chain issues, strong consumer demand, etc. Since the United States is a federal nation, you cannot expect all the states to be affected by inflation in the same way.
As a result, there are some states which are more expensive to live in than others. Even before the inflation, some states consistently remained expensive. If you are curious about some of the most expensive states to live in, in 2022, here are the top 20 most expensive states below.
20. Maine
The overall cost of living in Maine is high, except for housing. According to UpNest, the average rent in the state is $853 per month, which is $200 less than the national average. If you choose to live in the state due to the cheap housing rates, you must prepare to pay highly for utilities. Since Maine generally has long winters, you should expect to pay $465 per month for electricity, gas, and water.
19. Nevada
In Nevada, housing is the main thing that will drain your pockets. If you opt to rent a house in the state, you will spend around $1,060 per month, which is $37 more than the national median monthly rent. Seeing how expensive renting is, you may opt to buy a house, which is still not cheap. For example, a typical home is worth $242,400, which is $37,500 more than the national median home value.
18. Delaware
Delaware’s cost of living has been on the rise due to the instability of gas prices. Amazingly, the high gas prices have mainly caused the prices of utilities and food to rise, and not housing. Housing is low because the state has been able to manage its insurance and construction costs so that recovery becomes possible.
17. Minnesota
The most expensive thing that you can pay for in the state is gas. For instance, the state sells its gas at around $4.70 per gallon. Due to the high cost of gas in the area, it trickles down to other sectors like food. Since nearly everything will cost highly due to the high oil prices, you would need to earn quite well to reside here.
16. Vermont
One of the most expensive things that you will spend on in Vermont is healthcare. In fact, it is the state with the most expensive healthcare service in the United States. On average, you may spend around $6,103 per year, which is more than the national average of $5,640. If you decide to apply for a health insurance plan, it is not going to be any cheaper.
There has been a rise in premium costs over the years. By 2021, the premium had risen by 3.5%. Besides healthcare, the state pays highly on taxes. For instance, its sales tax is 6%, while its property tax is 1.83%.
15. Florida
Normally, some people rent houses because it is cheaper than buying them. However, renting a house in this state is even more costly. For instance, a one-bedroom apartment could cost you $835 a month. The high housing costs have to do with the ever-rising population in Florida. Additionally, property taxes have also been rising, and that has led buyers to sell or rent houses expensively.
14. Virginia
The greatest expense in the state is housing, with its median home cost at $258,400, which is considered a lot if you reside from Oklahoma. However, there are some cities in Virginia with affordable housing. Generally, houses in Richmond are cheaper than the ones in Great Falls. If you are fond of taking trips, you will find it expensive to move around within Virginia.
As of 2021, the gas prices rose to $3.07 per gallon, which was more than the national average of $2.58 per gallon. So, if you habitually commute with a car, you can save costs by occasionally taking public transits.
13. Rhode Island
The prices of houses have been rising in this state for quite some time. By 2021, real estate prices were up by 15.3%. If you want to live in a one-bedroom house in Rhode Island, you can expect to pay nearly $2,000 per month.
12. Oregon
Everything about transportation is high in Oregon. For instance, you will spend a lot on car insurance, maintenance, and gasoline. Altogether, the expenses are, on average, 7% higher than the rest of the United States. To minimize transport costs in this state, you will have to cut down fuel costs by carpooling or using public means.
11. Colorado
The cost of housing has skyrocketed in Colorado, with Boulder, Denver, and Colorado Springs being the most affected cities. Certain factors like its booming population and the 2008 Great Recession are the cause of the high housing costs.
With a high population, you can expect the demand for houses to rise. Based on the laws of demand, the prices of houses will have to increase. After the Great Recession, investors were determined to make a lot of money.
Therefore, they focused on building luxury homes since they felt they were a safer bet. Since then, more luxury homes have been available, which explains the general high cost of housing in Colorado.
10. Alaska
One obvious reason the state is expensive is due to its far distance. For instance, to travel to the state, you will need to go via Canada. So if you work in the delivery sector, you will feel the pinch more since you would roughly spend around $830 to $1,270 per day by road.
Its far distance also impacts significantly on the cost of healthcare. Generally, there are few doctors in the state since some doctors find the state remote. If you are lucky to have access to a doctor in the state, you would have to pay them a lot since they are scarce in the region.
9. Connecticut
In Connecticut, you have to be prepared to pay all manner of taxes and expensively at that. For example, you will pay income taxes within 3-7%, sale tax of 6.35%, and corporate income tax of 7.50%.
With the high taxes, you would assume that the jobs pay well, but they do not. First, they are hardly any job opportunities in the state. Additionally, it takes a while for a person’s salary to be raised. Since you are not earning as much as you would like to, it becomes expensive for you to pay off these taxes.
8. New Hampshire
In New Hampshire, you have to hope that your child does not get admitted to the hospital. The costs of child care are expensive, and they are especially tough on minimum wage earners. For instance, some minimum wage workers end up spending 85% of their pay to place their infants in child care. So if your child is likely to get admitted, this is a state you wouldn’t consider living in unless you are earning more than the minimum wage.
7. Maryland
Maryland is a state that pays its workers handsomely. For instance, most workers get paid roughly $33.29 an hour. Since the workers are paid well, they have to pay high income taxes. The state’s high income tax ranges from 2.5% to 5.75%.
So before you get too excited about the state’s salaries, think about the high income taxes you would pay. Income tax is not the only tax you have to worry about. You will pay highly on inheritance tax, gas tax, and sales tax. For instance, if you buy alcohol in Maryland, you will have paid a tax of around 9%.
6. Massachusetts
Housing is the major contributor to the high cost of living in the state. Not only is housing expensive, but visiting the state is also expensive. The population in the state has been increasing so massively that they are competing with the houses.
With the high demand for the scarce houses, it is no wonder that houses are expensive to rent or buy. Another factor that makes life expensive in Massachusetts is food. For instance, there is a 6.25% tax on meals when you get takeout, have it delivered, or eat from a restaurant.
5. New York
This listicle would be incomplete without this state since it is known for being one of the most expensive states to live in. Nearly everything is expensive in New York, from entertainment, transportation, insurance, parking fees, etc. Since it is a city where most billionaires live, it is no wonder that everything is expensive in the state.
4. New Jersey
If you explored New Jersey, you would realize that more people rent houses in the state than actually buy them. That is because buying a house is expensive since an average house costs $500,628 in the state.
If you wonder why people are willing to settle here despite the high cost of living, it is due to its low crime rates. Since low crime rates are a sign of high quality of life, it is the reason why houses are expensive since the profits could be used for security. Besides buying houses expensively, you need to brace yourself for high estate taxes in New Jersey.
For instance, if your assets (house and investment accounts) total more than $675,000, the state’s government would take 11% of tax on it after your death.
3. Washington
One of the reasons for the high cost of living in Washington is the commuting costs. Washington residents spend a lot of money on transport due to the state’s high traffic jams. According to Washington Post, the state ranks third in traffic congestion. So, to lessen the costs, you may have to walk to your place of work if it is not so far from your home.
Another reason the state is costly to live in is its high income tax rates. For high income earners, the rates fall between 6-9%. However, most Washington residents pay around 8.5% in taxes above $60,000. Since the average salary in the state is $84,081, it is no wonder the income taxes are high.
2. Hawaii
Most Hawaiians live with roommates due to the high cost of housing in the state. In some cases, some people have even moved out of the state. The major reason for the high housing costs is its land-use and zoning regulations.
Hawaii’s housing regulations determine the use of property, e.g., agriculture. That means if you identified an area that may be affordable, you would not be able to settle in the area if the government wants to use the land.
As a result, you will be forced to live in an expensive area. Another expense to worry about is its high tax rates. As of 2020, the state had the third highest budget per capita in the country at $12,896. Its total is inclusive of unfunded state liabilities.
That means the overspending of the state’s government costs its residents dearly. The residents end up paying high taxes without sometimes seeing value for their money.
1. California
There are a lot of factors that could attract you to this state. For instance, it is known for its wine, movies, beaches, theme parks, etc. As good as these factors are, the cost of staying in this state is high.
Some of the factors that make living in California difficult are the high cost of gas and housing. The reason housing is expensive is due to its strict housing regulations. Each house should be able to preserve the environment by limiting carbon emissions.
Since some builders cannot meet this requirement, houses are few in the state. Since the houses are fewer than people, the demand for them has caused their costs to increase.
Conclusion
Hopefully, you have understood some of the reasons why it is expensive to live in some states. If you still hope to live comfortably in any of these states, ensure that your salary exceeds the minimum wage. Despite the high costs, you can expect to enjoy quality utilities, transport, security, etc.
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Written by Dana Hanson
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