The most expensive cities in the U.S. are usually costly for a good reason – several, really. Residents are willing to pay extra for everything from housing to food to gas if it allows them to live someplace with a wealth of employment opportunities or great weather. Others are looking for cosmopolitan living, with a host of restaurants, museums and other cultural options on tap.
However, in some cases, simple isolation plays a leading role in high prices. When pretty much everything has to be imported over long supply lines, prices are bound to be higher.
We should also note that the worst bout of inflation to hit the U.S. economy in 40 years has made the nation's most expensive cities to live in even pricier than the last time we checked.
And yet, surprisingly, there's actually something of a silver lining to these metro areas' fast-rising prices. As counterintuitive as it may seem, recent research by esteemed New York University economist Edward Wolff shows that "inflation has been a great boon to middle-class U.S. households’ balance sheets, and has therefore helped to mitigate the increase in overall wealth inequality."
Something tells us that city dwellers coping with the daily reality of relentlessly rising costs probably take little solace in such long-term, macro-level developments. But, hey, at least something good might come out of their increasingly stretched budgets.
But back to the data. To determine just how much the most expensive cities to live in the U.S. really cost, we turned to the latest data from the Council for Community and Economic Research. Its cost of living index collects scores upon scores of prices across 265 urban areas, covering housing, groceries, utilities, transportation, healthcare, and miscellaneous goods and services (such as getting your hair done or going to a movie). We also gathered data on household incomes, home prices and unemployment rates for each city to provide context for local living costs.
Take a closer look at the 11 most expensive cities to live in the U.S.
Source: C2ER's Cost of Living Index, 2022 Annual Average Data, published January 2023. Index data is based on average prices of goods and services collected during the first three quarters of 2022, with index values based on the new weights for 2023. Population data, household incomes, home values, poverty rates and other demographic information are from the U.S. Census Bureau. Local unemployment rates, courtesy of the U.S. Bureau of Labor Statistics, are not seasonally adjusted, and are as of April 5, 2023 for the month of February 2023, which is the latest available data.
Most expensive cities to live in the U.S.
11. San Diego
|Cost of living:||43.7% above U.S. average|
|Median household income:||$93,042 (U.S.: $69,717)|
|Median home value:||$768,800 (U.S.: $281,400)|
|Unemployment rate:||3.6% (U.S.: 3.5%)|
San Diego, with its miles of beaches and nearly ideal climate, is paradise for those who love the outdoors. Be it surfing, sailing, hiking, biking, golfing or just exploring Balboa Park, this city on the Pacific has something for everyone.
And for those who prefer more sedentary activities, San Diego offers a world-class zoo, museums, professional sports teams and a wide-ranging restaurant scene.
Top employers include the U.S. Navy, Qualcomm (QCOM) and the University of California, San Diego.
So what's not to like? Well, living in San Diego can really stretch a budget. Housing costs are 122% higher than the national average. The average home price in San Diego stands at a whopping $1 million vs a national average of $$452,510. Average apartment rent comes to $3,057 a month, vs the U.S. average of $1,369.
And the bleeding doesn't stop there. Groceries, utilities and miscellaneous goods and services all cost about 12% more than what the typical American pays. Transportation expenses are especially stiff, or nearly 32% higher than the U.S. average.
Helpfully, California ranks as one of the most tax-friendly states for middle-class families.
10. Oakland, California
|Cost of living:||45.9% above U.S. average|
|Median household income:||$82,236|
|Median home value:||$848,600|
Oakland anchors one corner of a sort of Bermuda Triangle around San Francisco Bay where affordable prices go missing. The second corner is San Francisco, as famous for its sky-high real estate as it is for Alcatraz and Fisherman's Wharf. The third corner is Silicon Valley, home to tech giants handing out six-figure salaries like candy on Halloween.
Compared to its neighbors to the west and south, Oakland might seem a bargain. But consider this: although median household income in Oakland is 18% higher than the national level, median home values are three times higher than the U.S. median.
Rents and other costs for keeping a roof over one's head are similarly elevated in Oakland. Total housing-related expenses are almost triple the national average, according to C2ER. Groceries, utilities, transportation and healthcare costs all run roughly a third more than what the typical American pays.
9. Boston, Massachusetts
|Cost of living:||49.7% above U.S. average|
|Median household income:||$79,283|
|Median home value:||$659,700|
With its unparalleled collection of universities, hospitals, historical sites, and tech and biotech employers, it's easy to see why Boston is such an appealing place to live. And while there's no question the city's popularity comes at a high cost, it's not nearly as high as some East Coast cities that are often mentioned in the same breath as Boston.
After all, the high concentrations of students, recent grads and young professionals require some level of affordability to get by while they're starting out. Groceries, for example, are "only" 14% more expensive than the national average. Healthcare runs 20% more than what the typical American pays, and miscellaneous goods and services are 21% more pricey.
Housing-related costs, however, are a killer, or 124% higher than the national average. Renters and homeowners pay more than twice the national average for their domiciles. For example, the average apartment rents for $3,747 a month in Boston. That compares with a national average of $1,369 a month, according to C2ER. The average price of a Boston home comes to $921,897 vs $452,510 nationally.
8. Seattle, Washington
|Cost of living:||49.9% above U.S. average|
|Median household income:||$110,781|
|Median home value:||$848,100|
Just a few years ago, Seattle's economy was as hot and strong as its coffee, which put relentless upward pressure on prices. COVID-19 offered some respite from the persistent cost increases, but the Emerald City still remains one of the priciest cities in the nation.
It's not hard to divine why. As a major hub for the technology industry, Seattle is awash in high-paid jobs. Microsoft (MSFT) and Amazon.com (AMZN) are both based in the area, as are many smaller high-tech companies.
As with every city on this list, housing costs are the main driver of Seattle's sticker shock. Housing-related costs, including insurance, for renters and homeowners are more than three times the U.S. average, according to C2ER.
But the high prices hardly end there. Groceries, transportation, healthcare and miscellaneous goods and services run anywhere from 24% to 32% higher than what the typical American pays. Utilities, however, run only about 5% above the national average.
Although the state of Washington presents a mixed picture when it comes to taxes on retirees, it does happen to be one of the most tax-friendly states for middle-class families.
7. Los Angeles, California
|Cost of living:||50.6% above U.S. average|
|Median household income:||$70,372|
|Median home value:||$812,800|
Few cities can top Los Angeles for excess and glamor, but most of its residents don't work in Hollywood or shop on Rodeo Drive. While high living expenses make L.A. one of the most expensive cities to live in the U.S., median annual incomes are a paltry $655 above the national level.
And yet the allure of the nation's second-largest city remains strong. From Hollywood to Beverly Hills to Venice Beach, few cities can claim as many famous locales. For those who seek culture beyond the Kardashians, L.A. boasts a number of important museums and the world-class Los Angeles Philharmonic.
Just be forewarned that L.A.'s notorious traffic helps push transportation costs 29% above the national average. And although groceries, utilities, healthcare and miscellaneous goods and services are only about 12% to 17% costlier than the U.S. average, housing bleeds residents dry.
Indeed, housing-related expenses, including rents and mortgages, run almost 140% above the national average in Los Angeles. For example, the average price of a home in L.A. comes to $1.1 million, vs the national average of $452,510. Average rent, meanwhile, is 2.3 times higher than the U.S. average.
Lastly, there's another thing that's unhelpfully elevated in the City of Angels. While the U.S. unemployment rate sits at 50-year lows, Los Angeles' rate stands well above 5%.
6. Orange County, California
|Cost of living:||51.2% above U.S. average|
|Median household income:||$100,559|
|Median home value:||$832,300|
Several large municipalities make up the county, which abuts Los Angeles to the southeast, including Anaheim, Santa Ana and Irvine. But it's the smaller, tonier enclaves such as Newport Beach (median home value: $2 million) that cement Orange County's reputation for sheltering some of Southern California's richest and most famous.
In fact, the average home price for all of Orange County sits at $1.2 million according to C2ER. That makes it the fifth priciest market in the country. However, at $2,919 a month, apartment rents are only a bit more than twice the national average.
All in all, housing in the O.C. costs 156% more than what the typical American pays. Other budget-stressors include groceries, which cost about 12% more than the U.S. average, and transportation, which is 29% pricier. On the other side of the ledger, healthcare costs are slightly lower than the national average, and utilities are about 10% cheaper.
5. Washington, District of Columbia
|Cost of living:||52.2% above U.S. average|
|Median household income:||$90,088|
|Median home value:||$669,900|
The nation's capital is a tale of two cities when it comes to living costs. Housing-related expenses, including rents and mortgages, are by far the most burdensome at 2.5 times the national average, according to C2ER, but other expenses aren't too bad. In fact, D.C. healthcare costs are a bit below the national average.
Groceries run about 9% above the national average, while utilities are about 12% more expensive. Miscellaneous goods and services are pricier by 19%. Happily, transportation expenses aren't overly onerous, at less than 9% above the U.S. average. A wide-ranging bus and metro system makes getting to and around the District of Columbia affordable. The DC Circulator bus, for example, costs just $1 and its routes reach popular spots including Georgetown, Union Station and the National Mall.
And, of course, numerous museums and historical sites are free to visit, too.
Be that as it may, the average price of a home in D.C. stands at $1.2 million. Meanwhile, the average apartment rents for $3,320 a month – or $1,851 a month more than the U.S. average.
4. Brooklyn, New York
|Cost of living:||68.6% above U.S. average|
|Median household income:||$67,567|
|Median home value:||$793,300|
Technically, Brooklyn is one of the five boroughs that make up New York City, but in the past couple of decades it has emerged as something of a metropolis unto itself. Indeed, if Brooklyn were an independent city, its population would be on par with Chicago, the third-largest city in the nation.
Once upon a time, Brooklyn was considered a viable alternative for those who couldn't afford to live in Manhattan. Not anymore. Housing-related expenses, including rents and mortgages, are almost four times higher than the national average.
And yet, the median household income in Brooklyn is actually lower than the U.S. median. It's also almost $17,000 lower than the median household income in Manhattan.
Happily, not everything in Brooklyn is eye-wateringly expensive. Healthcare and utilities costs are only about 6% higher than their respective national averages. And transportation expenses run just 14% above what the typical American pays. Groceries and miscellaneous goods and services, however, are both about a quarter more expensive than their U.S. averages.
3. San Francisco, California
|Cost of living:||78.6% above U.S. average|
|Median household income:||$121,826|
|Median home value:||$1,306,400|
Years of relentless growth driven by high-paid tech workers have given San Francisco some of the highest living costs in the country, meaning even those with fat paychecks can struggle to make ends meet.
Houses are famously expensive – a seemingly insurmountable obstacle for aspiring homeowners. The average home price is a staggering $1.5 million in San Francisco, according to C2ER's cost of living index, and the median home value is by far the highest among the 11 most expensive cities to live in the U.S.
Renters don't fare much better. The average rent for an apartment in San Francisco is $3,585 a month. That's 2.6 times the national average. Indeed, overall, housing-related costs in San Francisco are more than four times greater than the national average.
And the nosebleed prices don't stop there. Groceries, utilities, healthcare and transportation expenses all run anywhere from 30% to almost 40% more than what the typical American pays. Even miscellaneous goods and services are nearly a quarter more expensive than the national average.
2. Honolulu, Hawaii
|Cost of living:||84.0% above U.S. average|
|Median household income:||$73,434|
|Median home value:||$733,000|
To enjoy the perks of living in such a remote Pacific paradise, Honolulu residents pay more than they would on the mainland for pretty much everything – and it's not hard to understand why. Most goods sold in Hawaii must arrive either by boat or by plane, which jacks up the price considerably.
Honolulu has by far the most expensive groceries of all 265 urban areas surveyed for by C2ER. For example, milk and bananas cost almost twice the national average, while potatoes are about three times more expensive. Overall, a trip to the supermarket costs 50% more than what a shopper would shell out back on the mainland.
Bills take a big bite out of folks' paychecks too. Utilities cost 41% more than what folks pay on the U.S. mainland. Transportation is 25% more expensive, and locals shell out upwards of 18% more for healthcare.
But, as always, housing is the biggest income-eater. Housing-related costs are more than three times the national average in Honolulu. Heck, the average home carries a price of $1.6 million.
1. Manhattan, New York
|Cost of living:||127.7% above U.S. average|
|Median household income:||$84,435|
|Median home value:||$940,900|
If you've ever been to Manhattan, you don't need us to tell you that it's an expensive place to visit.
But it's even more expensive to live there.
With space at a premium and location paramount, the median home value in Manhattan is second only to San Francisco on our list of most expensive cities to live in the U.S. Average apartment rent stands at a stunning $4,569 a month, blowing away every other city tracked by C2ER. Meanwhile, the average home price is $2.4 million.
The budget-busting doesn't stop there. Residents pay a premium of 35% at the grocery store, while transportation runs 16% above average. Meanwhile, miscellaneous goods and services are 37% more expensive. For example, if you want to go to the movies, you'll pay 60% more for a ticket. Yoga classes cost almost double the national average. All of this and more conspire to make Manhattan the most expensive city in the nation – by a lot.
By the way, you'll need to like crowds if you hope to make it in the Big Apple: Manhattan packs in almost 70,000 residents per square mile, according to the U.S. Census Bureau. For context, San Francisco, which has one of the highest population densities in the U.S., hosts a mere 17,376 residents per square mile.
Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
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