Originally published by CNBC – Scott Cohn Wednesday, 12 Jul 2023 10:13 AM EDT
- Inflation is coming down, with the latest CPI report for June showing price increases hitting their lowest level in two years, but it has not gone away, and in some states, it is far worse than others.
- The annual CNBC America’s Top States for Business study considers cost of living among 10 categories of competitiveness.
- With the nation facing a serious housing crisis, the 2023 study puts extra emphasis on housing affordability.
Inflation has eased considerably from the more than 40-year high hit last year, and the latest consumer price index reading for June showed prices rising by the lowest level since March 2021. But inflation is still stubbornly high nationwide. And in some states, it is more stubborn than in others.
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The cost of living is a key factor in a state’s overall competitiveness, which is why CNBC’s annual America’s Top States for Business study considers it in our methodology when ranking the states.
We rate the states based on an index of prices for a broad range of goods and services calculated by the Council for Community and Economic Research. New this year, with the nation mired in a housing affordability crisis, we are also factoring in data from the National Association of Realtors’ Affordability Distribution Score, which looks at the affordability of homes for sale across all income levels as of the end of last year. A score of 1 or higher generally suggests a housing market that is affordable, while the lower a score falls below 1, it is an indicator of a less affordable market without enough listings in local buyers’ range.
Some states are relative bargains even in these inflationary times — [America’s cheapest states to live in]. But the following states are no bargain at all: brace yourself for a tour through America’s most expensive states.
9. (tie) Arizona
The Grand Canyon State is no stranger to growing pains. But as the population surges, the supply of homes in Arizona is falling further and further behind the demand. The average price of a four-bedroom, 2,400-square-foot house in Lake Havasu City topped $1 million last year, or more than twice what it would cost in Sarasota, Florida.
- 2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)
- Consumer Price Index (June, West Region): Up 3.5%
- Housing Affordability Score: 0.51 out of 2.00
- Average Home Price (Lake Havasu City): $1,004,158
- Half Gallon of milk (Phoenix): $2.09
- Monthly Energy Bill (Phoenix): $264.56
9. (tie) Idaho
Idaho is another state where a red-hot real estate market is putting overall living costs increasingly out of reach. Based on income levels, Idaho ties with Montana and Hawaii for the lowest affordability in the nation, according to the National Association of Realtors. And the home prices have rippled into the rental market, where a two-bedroom apartment at $1,600 a month will cost you twice what it would in Hot Springs, Arkansas. But you can still get a deal on this state’s most famous export: $2.21 for a 5-pound sack of potatoes is less than half what you would pay in Decatur, Illinois.
- 2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)
- Consumer Price Index (June, West Region): Up 3.5%
- Housing Affordability Score: 0.42 out of 2.00
- Average Home Price (Boise): $576,971
- Half Gallon of Milk (Twin Falls): $2.79
- Monthly Energy Bill (Boise): $126.17
9. (tie) New Hampshire
Health-care costs are the biggest driver of inflation in New Hampshire, the Granite State, where a visit to the doctor will cost you more than $175, or twice what it would cost in Baltimore. A trip to the dentist, at more than $150, is nearly twice what it would cost in Peoria, Illinois. And your $115 eye doctor appointment is 36% more than it would cost in Detroit.
- 2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)
- Consumer Price Index (June, Northeast Region): Up 2.2%
- Housing Affordability Score: 0.57 out of 2.00
- Average Home Price (Manchester): $441,922
- Half Gallon of Milk: $2.66
- Monthly Energy Bill: $225.85
8. Rhode Island
According to the U.S. Department of Energy, Rhode Islanders are far more dependent on natural gas and heating oil that any other state. That helps explain why energy costs in Rhode Island are so high. You will pay twice the monthly energy bill that you would if you lived in Laramie, Wyoming. Prices spiked here last year due to the war in Ukraine. They have come down somewhat, but still not enough to make the Ocean State affordable.
- 2023 Cost of Living score: 12 out of 50 points (Top States grade: D-)
- Consumer Price Index (June, Northeast Region): Up 2.2%
- Housing Affordability Score: 0.52 out of 2.00
- Average Home Price (Providence): $462,061
- Half Gallon of Milk: $2.42
- Monthly Energy Bill: $251.32
7. Washington
Depending on where you live in Washington, housing prices in the Evergreen State can be downright oppressive — close to $1 million for a four-bedroom home in Seattle, and $3,600 a month to rent a two-bedroom apartment. Food costs are high, too. Expect to pay more than $5 for a loaf of bread, or twice what you would pay in Midland, Texas.
- 2023 Cost of Living score: 11 out of 50 points (Top States grade: D-)
- Consumer Price Index (June, West Region): Up 3.5%
- Housing Affordability Score: 0.51 out of 2.00
- Average Home Price (Seattle): $940,665
- Half Gallon of Milk: $2.97
- Monthly Energy Bill: $188.83
6. Montana
Montana became such a popular refuge during the pandemic that Big Sky Country now has big home prices to match. Montana is in a three-way tie with Idaho and Hawaii for the least affordable home prices in the nation. According to the Federal Housing Finance Agency, home prices rose 55% from before the pandemic through the end of last year. Prices have now begun to drop as mortgage rates rise, but that is raising concerns about housing market stability.
- 2023 Cost of Living score: 10 out of 50 points (Top States grade: F)
- Consumer Price Index (June, West Region): Up 3.5%
- Housing Affordability Score: 0.42 out of 2.00
- Average Home Price (Bozeman): $719,461
- Half Gallon of Milk: $2.24
- Monthly Energy Bill: $140.00
5. New York
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Real estate prices in the five boroughs of New York City are in the stratosphere compared to the rest of the country, though higher wages help affordability. But it is not just housing that makes it so expensive to live in New York, and it’s not just New York City. Basic goods and services can be expensive statewide. Getting a men’s suit dry cleaned in Albany will cost you more than double what it would cost in Columbia, South Carolina.
- 2023 Cost of Living Score: 9 out of 50 points (Top States grade: F)
- Consumer Price Index (June, Northeast Region): Up 2.2%
- Housing Affordability Score: 0.56 out of 2.00
- Average Home Price (Manhattan): $2,434,977
- Half Gallon of Milk: $3.04
- Monthly Energy Bill: $183.24
4. Massachusetts
Renting a two-bedroom apartment in Boston will cost you more than six times what it would cost in Kalamazoo, Michigan, as high costs in Massachusetts, the Bay State, ripple through the economy. Your average energy bill is more than two-and-a-half times what it would be in Baton Rouge, Louisiana. Health care is outstanding here, but a doctor’s visit will cost nearly twice what it would in Kansas City, Missouri.
- 2023 Cost of Living Score: 7 out of 50 points (Top States grade: F)
- Consumer Price Index (June, Northeast Region): Up 2.2%
- Housing Affordability Score: 0.54 out of 2.00
- Average Home Price (Boston): $921,897
- Half Gallon of Milk: $3.13
- Monthly Energy Bill: $257.12
3. Oregon
Housing affordability is a huge issue in the Beaver State, where homes are only slightly more affordable than the aforementioned three-way tie between Idaho, Montana and Hawaii. Just getting around Oregon can be expensive, with some of the highest gasoline prices in the nation, according to AAA.
2023 Cost of Living Score: 6 out of 50 points (Top States grade: F)
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Consumer Price Index (June, West Region): Up 3.5%
Housing Affordability Score: 0.45 out of 2.00
Average Home Price (Portland): $661,664
Half Gallon of Milk: $2.88
Monthly Energy Bill: $157.38
2. California
For decades, California was the ultimate growth story. That changed in 2020, when the state lost population for the first time in a century. The exodus has continued, yet the Golden State still has a massive housing shortage. By one estimate, the state should be building 180,000 new units per year, but it is building only a fraction of that. The result is America’s worst poverty and homelessness rates, and prices for many basic needs that are out of control. A dozen eggs in San Francisco costs nearly twice what it does in Yuma, Arizona.
2023 Cost of Living Score: 4 out of 50 points (Top States grade: F)
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Consumer Price Index (June, West Region): Up 3.5%
Housing Affordability Score: 0.46 out of 2.00
Average Home Price (San Francisco): $1,502,557
Half Gallon of Milk: $3.38
Monthly Energy Bill: $267.64
1. Hawaii
Hawaii has always been expensive due to its location, and the fact that so many basic items must be shipped here from somewhere else. But the housing crisis has made matters even worse. A 4-bedroom house in Honolulu will cost roughly four times what it would in Daytona Beach, Florida. Gas prices are among the nation’s highest, and the only higher grocery bill in the U.S. is in Kodiak, Alaska. America’s most expensive state might seem like paradise, but the prices are hell.
2023 Cost of Living Score: 2 out of 50 points (Top States grade: F)
Consumer Price Index (May, Honolulu Area): Up 2%
Housing Affordability Score: 0.42 out of 2.00
Average Home Price (Honolulu): $1,605,915
Half Gallon of Milk: $4.32
Monthly Energy Bill: $309.47
Source: https://t-tees.com
Category: WHY
