A recent survey in the United States revealed that the cost of living varies across different regions, with the highest-cost area in the country exceeding the national average by more than double, while the lowest-cost area is 20% below the average. Manhattan in New York is identified as the most expensive place to live in the United States, surpassing the second-ranked area by 24%.
The Council for Community and Economic Research’s Cost of Living Index measures the regional price differences of daily goods and services in 271 cities and areas across the United States. The index covers 61 different items, with prices collected quarterly by chambers of commerce, economic development organizations, and university applied economic centers in each participating city region.
The composite index is based on six categories: housing, utilities, groceries, transportation, healthcare, and miscellaneous goods and services. A composite score of 100 represents the national average, with any score above 100 indicating a cost higher than the average.
The following are the top 10 most expensive cities and regions in the U.S. based on the composite index scores:
1. New York (Manhattan): 231
2. Honolulu, Hawaii: 186.2
3. San Jose, California: 177.1
4. San Francisco, California: 169.6
5. New York (Brooklyn): 161.5
6. Orange County, California: 154.9
7. Los Angeles (Long Beach), California: 150.6
8. New York (Queens): 146.9
9. Washington, D.C.: 144.6
10. Boston, Massachusetts: 144.3
All of these areas are known for having the highest housing costs nationwide. This is primarily due to major U.S. cities attracting a large influx of people due to high job concentration, leading to increased demand for housing and subsequently driving up housing costs.
In places like Honolulu or Manhattan, land is also very limited, restricting the number of housing units that can be constructed. The lack of new supply further pressures housing prices upward.
Another reason for Manhattan’s high cost of living is wealth concentration. New York City has the highest number of millionaires in the country, with many residing in Manhattan. This concentration of wealth also contributes to the high property prices in Manhattan, including some of the most expensive neighborhoods in the U.S. such as West Village, where median home prices per square foot reach $2,400.
Conversely, the least expensive city on the list is Decatur, Illinois, with a score of 78.8. This means that living in Decatur is 22.2% cheaper compared to other areas in the U.S.
The top three cities with the highest grocery costs are all located in Alaska: Juneau, Fairbanks, and Anchorage, with Honolulu and San Francisco ranking fourth and fifth, respectively.
The five cities where utilities cost the most are Fairbanks in Alaska, Honolulu, Bakersfield in California, San Francisco, and Oakland in California.
Data for the Cost of Living Index was collected from January 1, 2024, to March 31, 2024. According to government survey data, the weights for each category are based on typical household spending habits.
(Credit: This article referenced reporting from CNBC)