The current inflation rate in the United States has reached its highest level in three years, with some states experiencing even higher inflation rates. The cost of living is a significant factor for businesses deciding where to operate, as high living costs make it more challenging for businesses to attract employees and necessitate higher salaries.
According to the annual “Best States for Business” competitiveness index by CNBC, the cost of living accounts for 2% of the total score of each state. Some states have relatively lower living costs, while others have higher living costs. Here are some of the states in the U.S. with the highest cost of living and a comparison of the average prices of basic living items in major metropolitan areas.
The latest data from the U.S. Census Bureau and ATOM Data Solutions shows that one-third of residents in this state spend over 30% of their monthly income on housing, with rents being over 40% higher than in Ohio.
2026 Cost of Living Rating: 17 points (out of 50) (State Grade: D+)
Consumer Price Index (May, Midwest Region, Year-over-Year): Up 5%
Average Rent (Three-bedroom): $2,425
Average Home Price (Chicago): $642,053
Monthly Energy Bill: $188.44
A Dozen Eggs (Q1 2026): $4.04
A Loaf of Bread (Q1 2026): $4.04
In the first quarter of 2026, the average home price in Manhattan reached a staggering $2.9 million, the highest in the country, with an average apartment rent of nearly $6,000. Even when considering rents in other areas of the state, New York City has the highest percentage of rent compared to median income in the nation, according to ATOM Data Solutions.
2026 Cost of Living Rating: 17 points (out of 50) (State Grade: D+)
Consumer Price Index (May, New York-Newark-Jersey City Metro Area): Up 5.1%
Average Rent (Three-bedroom Homes, Statewide): $4,198
Average Home Price (Manhattan): $2,904,444
Monthly Energy Bill: $275.57
A Dozen Eggs (Q1 2026): $4.87
A Loaf of Bread (Q1 2026): $4.33
Earlier this year, Starbucks announced the relocation of most of its operations from Washington state to Tennessee, and longtime CEO Howard Schultz has retired and moved to Florida. While Washington state remains the location of Starbucks’ headquarters, rising living costs and a new 9.9% state tax on those earning over $1 million are speculated to be the main reasons for the relocation. However, it is the ordinary people who bear the burden of Washington state’s high living costs, as a 12 oz. can of Folgers coffee in Seattle is over 15% more expensive than in Providence, Rhode Island.
2026 Cost of Living Rating: 17 points (out of 50) (State Grade: D+)
Consumer Price Index (May, Western Region): Up 3.5%
Average Rent (Three-bedroom): $2,632
Average Home Price (Seattle): $1,252,825
Monthly Energy Bill: $211.87
A Dozen Eggs (Q1 2026): $2.96
A Loaf of Bread (Q1 2026): $4.95
Data from C2ER shows that sugar prices in Hartford, Connecticut, are 20% higher than in Fayetteville, Arkansas. The C2ER Cost of Living Index ranks Connecticut ninth in basic living costs nationwide, with median income rent ratios also high, making healthcare costs expensive.
2026 Cost of Living Rating: 16 points (out of 50) (State Grade: D)
Consumer Price Index (May, Northeast Region): Up 5%
Average Rent (Three-bedroom): $3,226
Average Home Price (Stamford): $913,790
Monthly Energy Bill: $340.42
A Dozen Eggs (Q1 2026): $5.30
A Loaf of Bread (Q1 2026): $4.38
In this state, 32.7% of residents spend over a third of their monthly income on housing, ranking tenth nationally. Basic living items are also expensive, with a loaf of bread in Portland costing about a third more than one in Minot, North Dakota. A report from the Common Sense Institute in Oregon in March of this year indicated that the state ranks 47th in housing affordability nationwide. The report noted that a typical family of four has only 16.77% of their income left for other expenses after taxes and necessary spending, far below Iowa’s 37.1%.
2026 Cost of Living Rating: 15 points (out of 50) (State Grade: D)
Consumer Price Index (May, Western Region): Up 3.5%
Average Rent (Three-bedroom): $2,456
Average Home Price (Portland): $683,212
Monthly Energy Bill: $216.52
A Dozen Eggs (Q1 2026): $2.96
A Loaf of Bread (Q1 2026): $4.58
Rhode Island ranks fifth in monthly housing costs in the U.S., with rent especially high. The average rent for a three-bedroom home in Providence accounts for nearly 30% of the median household income, ranking fourth nationally. The price of a pizza in Providence is almost 30% higher than in Wayne County, Pennsylvania.
2026 Cost of Living Rating: 15 points (out of 50) (State Grade: D)
Consumer Price Index (May, Northeast Region): Up 5%
Average Rent (Three-bedroom): $3,447
Average Home Price (Providence): $471,895
Monthly Energy Bill: $327.71
A Dozen Eggs (Q1 2026): $4.83
A Loaf of Bread (Q1 2026): $3.95
Living in Hawaii is costly, with almost everything being expensive. The price of a pound of bananas is double that of Valdosta, Georgia, and gasoline is 50% more expensive than in Champaign, Illinois. The proportion of average rent to median income in Hawaii ranks second nationwide (second only to New York). The good news is that Hawaii has largely avoided the insurance crisis sweeping the continental U.S., with premiums close to the national average, and Insurify predicts a further 2% decrease this year.
2026 Cost of Living Rating: 14 points (out of 50) (Top Grade State: D)
Consumer Price Index (May, Western Region): Up 3.5%
Average Rent (Three-bedroom Home): $3,746
Average Home Price (Honolulu): $1,661,193
Monthly Energy Bill: $555.14
A Dozen Eggs (Q1 2026): $7.49
A Loaf of Bread (Q1 2026): $6.97
The relative cost of living advantages in Florida are increasingly overshadowed by housing and insurance crises. Florida has no state income tax, and property taxes are similar to the national average. However, according to the insurance regulatory agency Insurify, homeowner insurance in Florida ranks highest nationwide and is expected to increase by 2% this year. Florida’s rents also rank among the highest in the country, with monthly housing costs as a proportion of median income only second to California. Grocery expenses are also difficult to cut back on; even one of Florida’s most famous products, orange juice, is significantly more expensive, with Fort Lauderdale orange juice being 6% pricier than in Greensboro, North Carolina.
2026 Cost of Living Rating: 13 points (out of 50) (Top Grade State: D-)
Consumer Price Index (May, Southeast Region): Up 3.9%
Average Rent (Three-bedroom): $2,587
Average Home Price (Fort Lauderdale): $935,241
Monthly Energy Bill: $230.06
A Dozen Eggs (Q1 2026): $3.92
A Loaf of Bread (Q1 2026): $4.84
Colorado faces the deepest insurance crisis in the U.S. Insurify data shows that due to wildfires and hailstorms, the average homeowner premium in Colorado is close to $4,000 per year, ranking sixth nationwide, with premiums estimated to increase by 4% this year. Colorado’s premiums are double those of Arizona residents. Since 2020, the average premium in Colorado has doubled, leading many insurance companies unwilling to raise premiums to withdraw from the state.
2026 Cost of Living Rating: 12 points (out of 50) (State Grade: D-)
Consumer Price Index (May, Mountain Plains Region): Up 4.2%
Average Rent (Three-bedroom Home): $2,593
Average Home Price (Colorado Springs): $523,031
Monthly Energy Bill: $148.72
A Dozen Eggs (Q1 2026): $2.96
A Loaf of Bread (Q1 2026): $4.56
High living costs have tarnished the aura of California as the “Golden State.” California ranks first in monthly housing costs nationally, with 40% of Californians spending over 30% of their income on housing. Research from Stanford University shows that even areas outside wildfire zones are beginning to face insurance crises. Since 2020, California premiums have increased by 84%, with Insurify predicting a further 16% increase this year, the highest in the country.
Stanford University research indicates that many homeowners are forced to join the California FAIR Plan, which currently covers approximately 5% of standalone residences in the state, up from 1.5% in 2020. The report states that 6% of new mortgages are guaranteed by the FAIR Plan, signaling deeper issues ahead.
Additionally, there are shortages of basic living items. Although California is the largest agricultural state in the U.S., with agricultural output accounting for about half of the nation’s total, groceries are not cheap in California. The price of a head of lettuce in San Jose is 16% higher than in Burlington, Iowa.
2026 Cost of Living Rating: 4 points (out of 50) (State Grade: F)
Consumer Price Index (May, Western Region): Up 3.5%
Average Rent (Three-bedroom): $3,490
Average Home Price (San Jose): $1,982,986
Monthly Energy Bill: $372.98
A Dozen Eggs (Q1 2026): $2.96
A Loaf of Bread (Q1 2026): $5.20