The most expensive states in America

Understanding the most expensive states in America

Across all 51 states and the District of Columbia, price level spans from 110.7 in California at the top of the list to 86.9 in Arkansas at the bottom. The three at the top are California, Hawaii, and District of Columbia; the three at the bottom are Oklahoma, Mississippi, and Arkansas.

The most expensive states to live in cluster where you would expect: the coasts and Hawaii. States like California, Hawaii, and the states around the New York metro area sit well above the national average, while the interior of the country is generally cheaper. What pushes a state up this list is almost always housing — rents and home prices vary far more between states than the cost of groceries, fuel, or other goods, which move on national markets.

A high price level is not the same as a bad deal. Expensive states also tend to pay higher wages, and a bigger paycheck can offset pricier housing. The figure that actually matters is your income measured against local prices — what economists call real, or cost-adjusted, income. A salary that looks generous in an expensive state can buy less than a smaller one somewhere affordable, which is why this ranking is best read next to wages rather than on its own.

If you are weighing a move or a job offer in one of these states, convert the salary to national-average dollars before comparing it with your current situation. A raise that comes with a move to a costlier state can quietly be a pay cut, and the price level here is the number that tells you by how much.