Considering a move to a new city? The allure of large urban centers often includes amenities, convenient public transportation, and better job prospects. However, the cost of living in these cities can be significant, with high prices for rent, housing, groceries, and transportation. To help you gauge the financial commitment of city living, we’ve compiled a list of the 10 most expensive cities in the U.S.
Whether you’re relocating for business, planning a vacation, or looking to buy a house, understanding the expenses associated with these cities can be crucial in making an informed decision, especially in light of the worst bout of inflation in 40 years that the nation is just only recovering from.
Methodology
To identify the most expensive cities in the United States, we’ve gathered data on population, household incomes, average monthly and home values from the U.S. Census Bureau, Bureau of Labor and Statistics, and Zillow.
We’ve also gathered data on the cost of utilities, groceries, and transportation for each city using the Payscale cost of living calculator. These metrics allow us to offer a comprehensive overview of the cost of living in each city, aiding homeowners, real estate investors, lenders, and realtors in making informed decisions.
What Is The Average Cost Of Living In The US?
To accurately depict how expensive the cities we’ll be talking about are, it’s important to set a baseline that helps us better understand how much more one has to pay to live in these cities. The numbers we’ll be reporting will be in comparison to the U.S average. So to better understand our findings, we’ve provided numbers that depict the average cost of living in the U.S.
- Median household income: $74,580
- Median home price: $347,716
- Average monthly rent: $2,075
- Poverty rate: 11.5%
- Unemployment rate: 3.8%
The Top 10 Most Expensive Cities in the United States
1. New York City, New York
Image by Luca Bravo on Unsplash
- Cost of living: 128% above U.S. average
- Median household income: $76,607
- Median home value: $732,100
- Average monthly rent: $3,499
- Poverty rate: 17.2%
- Unemployment rate: 5.1%
- Population: 8.336 million
It should come as no surprise that New York City ranks among the most expensive cities in the nation. New York City not only holds the title for the most expensive city in the U.S but also stands out as one of the priciest in the world and is used as the benchmark for rating the cost of living index of other cities, where the cost of living index is set at 100.
New York City consists of five boroughs, each with varying cost of living and real estate prices. For instance, Manhattan, with a 1.7 million population of NYC’s 8.3 million, is the most expensive borough in NYC with a cost of living 237% higher than the national average.
Food, Healthcare, Transportation, and Goods and Services cost 11%, 13%, 11%, and 19% respectively more than the National average. The smallest disparity comes from utilities at just 3% higher than the National average.
On the less attractive side, New York has a staggering population density of 29,302.66 people per square mile which means you’d have to get used to the crowd if you are looking to live there.
Getting a home in New York City might also be trickier than some of the other cities on this list, with their squatter rules which allows an individual to occupy a property without the homeowner’s permission and can even claim rights to occupy the property in just 30 days.
Income tax in the state of New York ranges from 4% to 10.9% of your income, with an additional 3.078% – 3.876% for residents of New York City. Although, on the bright side, taxes on property in New York City are the lowest in the state, set at an average of just 0.91% of property value, compared to that of counties outside the city ranging from 1.07% to 3.27%. Additionally, New York has a sales tax rate of 4%, with each county adding an additional sales tax ranging from 3% to 4.5%.
2. Honolulu, Hawaii
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- Cost of living: 84% above U.S. average
- Median household income: $99,816
- Median home value: $860,005
- Average monthly rent: $2,750
- Poverty rate: 9.3%
- Unemployment rate: 2.7%
- Population: 1,016,508
Known for its beautiful beaches, and home to the only royal palace in the United States, this famous vacation destination also comes with a high cost of living, with housing costing about 147% more than the National Average.
One of the major contributors to Honolulu’s position on this list is the hIgh cost of groceries. Despite efforts to increase local food production, Hawaii still relies heavily on imported goods, leading to exorbitant prices due to shipping and storage costs with groceries costing 50% more than the national average.
Much of the imported food may spoil before reaching consumers, contributing to waste and driving prices even higher. In fact, Honolulu is the second-most expensive city in the country for groceries, trailing only behind Kodiak, Alaska (a borough plagued with a similar issue).
Additionally, transportation costs an astonishing 26% more than the national average. Utilities in Honolulu are also a major expense, surpassing the national average by a staggering 42%. These factors combine to make Honolulu a city where the cost of living is notably higher than in many other parts of the United States.
Honolulu does not let up when it comes to taxes too, with Hawaii having one of the highest income tax rates in the entire country ranging from 1.40% to 11% for singles over $200,000 and couples over $400,000. Ironically, Hawaii has the lowest property tax rate at 0.29% of the home value. Sales tax ranges from 4% to 4.5%.
3. San Francisco, California
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- Cost of living: 79% above U.S. average
- Median household income: $136,689
- Median home value: $1,236,502
- Average monthly rent: $3,244
- Poverty rate: 10.5%
- Unemployment rate: 4.5%
- Population: 808,437
San Francisco, CA, is renowned for its high cost of living, with its Bay Area having some of the strongest economies in the world which attracts talent and infuses a lot of money in the region, subsequently resulting in high housing costs.
With the high cost of living and work-from-home wave, San Francisco experienced a massive drop in the first year of the COVID pandemic with an outmigration of about 52,200 people, although it’s starting to recover, ranking 9th for population growth among California counties. Despite that, San Francisco still has a staggering population density of 18,634.65/sq mi.
This has not reflected too much on the cost of living as it is as high as ever. With utilities and groceries costing 32% and 31% respectively more than the national average, and transportation at 38%.
Taxes in San Francisco, much like the rest of California, are quite high. The state’s income tax rates are among the nation’s highest, with a peak rate of 12.3% for incomes above $572,980, along with an additional 1% surtax for those exceeding $1 million. However, property taxes in San Francisco are relatively modest, set at 0.72% of the home value due to proposition 13.
| Proposition 13, enacted in 1978, is a key factor in California’s property tax code. This proposition limits property tax rates to 1% of a home’s assessed value and restricts annual increases to 2%, except in cases of ownership change or construction. This law has helped keep property tax payments in California below the national average, providing significant savings for homeowners. |
In California, the base sales tax rate is 6.00%, applicable statewide to the purchase price of taxable goods. In addition to this, many cities and counties impose their own sales taxes, which can range from 1.25% to 4.75%. This brings the maximum combined sales tax rate to 10.75%. However, in San Francisco, the local sales tax rate is $3.88, making the total sales tax rate $9.88.
4. Los Angeles, California
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- Cost of living: 51% above U.S. average
- Median household income: $76,244
- Median home value: $953,501
- Average monthly rent: $2,750
- Poverty rate: 16.6%
- Unemployment rate: 5.5%
- Population: 3.822 million
Los Angeles, CA, is pretty much synonymous with Hollywood and America’s entertainment industry in general. This plays a massive role in the city’s economy. LA is also home to one of the busiest ports in the country, with its shipping industry playing an equally important role in the city’s economy. Despite all of this, Los Angeles has a 16.6% poverty rate compared to the national average of 11.5%.
Los Angeles is made up of several neighborhoods, each with its own unique cost of living. Areas like Beverly Hills and Santa Monica are known for their high housing costs, while other neighborhoods may be more affordable. The cost of living in Los Angeles is about 51% higher than the national average, with utilities and groceries each costing 11%, and transportation 28%, more than the national average.
With a population of nearly 4 million people and significant traffic congestion, Los Angeles is one of the most densely populated cities in America and faces challenges related to overcrowding and demand for housing.
Income tax in Los Angeles is the same as across the state of California ranging from 1% to 12.3% with an additional 1% for earners from $1 million upwards. Effective property tax in Los Angeles is set at 0.82% of the home value with the sales tax set to the maximum of $4.50 bringing the total sales tax rate to $10.75.
5. Orange County, California
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- Cost of living: 51% above U.S. average
- Median household income: $109,361
- Median home value: $1,097,698
- Average monthly rent: $3,437
- Poverty rate: 10.0%
- Unemployment rate: 4.2%
- Population: 3.151 million
Orange County is another costly city in California and with a lot of rich people so much that it earned a series – The O.C. Buying a house here will set you back a little over $1 million, a little less than what one will cost in San Francisco.
Orange county, however, compensates for these high prices with a great climate, opportunities for outdoor recreation, and a lot of beautiful beaches.
Groceries and transportation come at a rate of 11% and 29% respectively higher than the national average, with utilities coming in at a surprising 8% less than national average.
Income tax in Orange county is the same California rate ranging from 1% to 12.3%. Property tax in Orange County is set at 0.720% of the property value, and sales tax at the maximum of 4.25% (plus the state flat rate of $6.00).
6. Boston, Massachusetts
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- Cost of living: 50% above U.S. average
- Median household income: $89,212
- Median home value: $718,233
- Average monthly rent: $3,350
- Poverty rate: 17.5%
- Unemployment rate: 3.2%
- Population: 650,706
Home to the oldest public park in the United States, the Boston Common, Boston, MA, is known for its rich history and academic institutions. Boston is also a big tech hub, with an estimated ecosystem value of $357 billion (similar to that of London).
With a population of over 685,000 residents and a high population density of 13,976.98/sq mi, Boston faces challenges related to housing demand and congestion.
Taxes in Boston are the same across the state of Massachusetts. The state income tax is a flat 5.00%, with an additional 4% surtax on income exceeding $1 million. The sales tax stands at 6.25%, and property taxes have an effective rate of 1.20%.
7. Seattle, Washington
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- Cost of living: 50% above U.S. average
- Median household income: $116,068
- Median home value: $847,419
- Average monthly rent: $1,995
- Poverty rate: 10.1%
- Unemployment rate: 4.7%
- Population: 749,256
Unlike most of the biggest companies in the world, Microsoft and Amazon have their headquarters situated here in Seattle. Couple this with its attractive mountain ranges and water bodies, and it starts to make sense why Seattle costs as much as it does.
Home to the first-ever Starbucks coffee shop, Seattle has a poverty rate slightly less than the national average at 10.1% and a population density of 8,775.03/sq mi. Utilities in Seattle cost only 6% more than the national average with transportation and groceries 23% and 25% more.
Despite being one of the most expensive cities in the country. Seattle charges no income tax, as it is across the state of Washington. Sales tax in Seattle ranges from 7.5% to 10.60% and property taxes have an average effective rate of 0.94% of the home value.
8. San Jose, California
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- Cost of living: 49% above U.S. average
- Median household income: $136,010
- Median home value: $1,406,957
- Average monthly rent: $2,850
- Poverty rate: 7.9%
- Unemployment rate: 4.4%
- Population: 971,233
Largest city in Silicon Valley and home to the site of the world’s first broadcasting station, San Jose, CA, is home to thriving tech companies which in turn raises its demands, and by extension the cost of those that wish to call it home.
Although San Jose is widely regarded as the heart of Silicon Valley and a magnet for the “tech bros,” it still doesn’t cost as much as San Francisco with cost of living in San Jose only 49% higher than national average (compared to San Francisco’s 79%).
Utilities and groceries also cost less at 24% and 21% respectively higher than the national average, with the highest disparity in transportation with San Jose’s transportation 33% less than San Francisco’s and only 5% more than the national average.
Home to over 1 million residents, San Jose has a population density of 5,684.69 sq mi and significant traffic congestion that robs its average commuter 72 hours annually.
Income tax in San Jose is the same as the California rate ranging from 1% to 12.3%. Property tax in San Jose is set at 0.85% of the property value, and sales tax at $3.88 (plus the state flat rate of $6.00).
9. Oakland, California
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- Cost of living: 46% above U.S. average
- Median household income: $94,389
- Median home value: $780,188
- Average monthly rent: $2,250
- Poverty rate: 13.2%
- Unemployment rate: 5.0%
- Population: 808,437
Situated just across the bay from San Francisco, Oakland has emerged as a magnet for creative individuals and young professionals who have been priced out of San Francisco’s housing market.
Despite its proximity to San Francisco, Oakland boasts its own array of job opportunities, hosting Fortune 500 companies like The Clorox Company, AECOM, Oracle, and Southwest Airlines.
Despite being more affordable than some neighboring areas like Orange County, buying a home in Oakland still comes with a hefty price tag, with houses costing an average of $780,188 according to Zillow.
Oakland also ranks high for groceries, utilities, and transportation at 30%, 30%, and 34% respectively above the national average.
Income tax in Oakland is the same state rate of anywhere from 1% to 12.3%. Property tax in Oakland is set at 0.79% of the property value, and sales tax at the maximum of $4.75 (plus the state flat rate of $6.00).
10. Washington, District of Columbia
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- Cost of living: 39% above U.S. average
- Median household income: $101,722
- Median home value: $610,180
- Average monthly rent: $2,471
- Poverty rate: 15.1%
- Unemployment rate: 3.1%
- Population: 671,803
Living in the nation’s seat of power grants proximity to government buildings and rich American history, but also comes at a cost of living 39% above the U.S average.
With its high-paying government jobs and iconic landmarks (like the world’s largest library), Washington, D.C., is home to nearly 700,000 people with a considerable population density of 10,280.71/sq mi. Groceries and Transportation cost 10% and 5% respectively more than national average with utilities at 3% less.
Even as residents in the county of the seat of power, living in the District of Columbia doesn’t grant immunity from local taxes. Taxes in Washington D.C. include a district income tax, with rates varying from 4% to 10.75%, a 6% sales tax, and an average effective property tax rate of 0.57%.
Frequently Asked Questions
What Is the #1 Most Expensive City in the US?
New York City earns its reputation as the most expensive city in the U.S. due to its blend of historic landmarks, diverse culture, and thriving finance and business sectors. This vibrant urban landscape, however, comes with a significant cost, reflected in its high living expenses. The city boasts a staggering number of affluent residents, including 340,000 millionaires, 724 centi-millionaires (individuals worth over $100 million), and 58 billionaires. New York City’s status as the most expensive city isn’t just a national distinction; it’s a global one, setting the benchmark for the cost of living worldwide.
What Us City Has the Highest House Prices
The most expensive home prices in California are found in the Bay Area, where the median price for a single-family home exceeds $1.5 million. But when it comes to specific cities, San Jose has the priciest houses at $1,406,957 with San Francisco and Orange County coming behind at $1,236,502 and $1,097,698 respectively.
Is Florida an Expensive State To Live In?
This largely depends on the city. Miami (which is the most expensive city to live in Florida) has a cost of living 21% higher than the national average, which is a lot less than all the cities we’ve covered in this article. Groceries, Utilities, and transportation each cost 20%, 6%, 8% more than the national average.
Taxes in Florida are enticing though, with a 0% income tax, 6% – 7.50% sales tax, and 0.86% average effective rate property tax.
Wrap Up
When choosing your next city to reside in, it’s crucial to weigh the cost of living against your income. The cities on our list are among the most expensive in the country, with living expenses significantly surpassing the national average. Relocating to one of these cities can be financially challenging, underscoring the need for careful budgeting beforehand. Nevertheless, despite the steep living costs, these cities boast unique advantages that appeal to residents, explaining why many are willing to pay a premium to reside there.
