Which state is very expensive? — How to find a costly city in usa and compare places

What people mean when they search for a costly city in usa: definition and scope

Searches for a costly city in usa can mean different things. Some users want a short answer about which state or metro has the highest overall price level. Others are focused on housing prices, taxes, or health expenses. To compare places use a clear definition of what you mean by costly before you compare numbers.

When people ask whether a place is costly they often mean how much typical consumer goods and services cost relative to the U.S. average. A common, consistent national measure is the BEA Regional Price Parities, which report state and metro price levels relative to a national baseline and help make cross-state comparisons clearer BEA Regional Price Parities.

Housing, taxes, and healthcare each change how expensive a place feels in practice. Say your priority is lower rent; then housing indices will be more relevant. If after-tax income matters to you, then tax burden tables and health spending need to be part of the comparison.

How BEA Regional Price Parities measure state and metro price levels

BEA Regional Price Parities, abbreviated RPPs, measure regional price levels for consumption goods and services relative to a U.S. average. The measure is widely used for cross-state and metro comparisons and is a useful starting point for relocation analysis BEA Regional Price Parities.

RPPs are an overall price index, not a housing-only index. That means they combine many categories of spending. Use them to see whether a state or metro has prices above, near, or below the national average. To compare two areas directly, subtract one RPP score from the other and interpret the result as a percentage difference in the general price level.

RPPs have limits. They do not replace specific checks for housing or taxes. For many moves, RPPs should be the first screen, then be followed by housing indexes and tax or health adjustments.

Why housing is the dominant driver of interstate cost differences

Housing costs tend to be the single largest driver of differences in how expensive states and metros feel to residents. Housing price movements often outpace changes in other consumer prices and can dominate affordability comparisons when they are extreme Zillow Research housing indices.

Because housing can diverge from the broader price index, a state with an elevated RPP score may owe much of that premium to a few high-cost metros rather than uniform price inflation across the state. That is why checking local rent and home-price trends is essential.

When you study housing, look at both rent trends and median home values. Short-term rent spikes, changing mortgage rates, and local supply dynamics can change affordability faster than general price indices do.

Which high-cost metropolitan areas lift their state’s expense profile

Some metropolitan areas concentrate very high expense levels and can raise their state’s overall ranking. Examples commonly cited in housing and price analyses include Honolulu, the San Francisco Bay Area, and New York City; these metros often push their states’ averages higher Zillow Research housing indices.

When a state contains one or two very expensive metros, the statewide RPP can obscure large within-state variation. That means a single statewide number can overstate expense for much of the state’s population if most counties have lower prices.

To account for concentrated metros, compare the statewide RPP with the metro-level RPP or the BLS regional CPI tables for the specific metropolitan area to see whether the state average reflects most places within the state or just a few price hotspots BLS regional CPI tables.

How taxes and health-care spending change after-tax affordability

State and local tax burdens and health-care spending affect after-tax affordability and should be combined with price indices when evaluating where to live (see the American Prosperity page). State tax burden data provides a comparative look at how much tax systems add to living costs across states Tax Foundation state and local tax burden.

Healthcare costs and insurance premiums vary across regions and can change how expensive a place feels for people with higher medical needs. Including health expenditure indicators helps reveal those differences when you compare two states that otherwise have similar price levels. See related resources on Affordable Healthcare.

Combine RPPs with tax and health adjustments to estimate after-tax purchasing power. For many decisions, this combined view is more meaningful than price indices alone.

Which combination of metrics to use when asking ‘which state is very expensive’

When asking which state is very expensive, use a three-part approach. First, consult BEA RPPs for the overall price level. Second, use housing indices to measure housing pressure. Third, add tax burden and health-cost measures to estimate after-tax affordability BEA Regional Price Parities.

Relying on a single metric can mislead. For example, a high housing cost in one metro can make a state look expensive while the rest of the state remains affordable. The three-part mix gives a balanced view and helps prioritize which factors matter for your household.

In practice, add wages or living-wage comparisons when income relative to prices is the deciding factor. This shows whether local pay levels are likely to offset higher prices.

A practical checklist to compare a costly city in usa and its state

Step 1, Check RPP and metro RPP. Find the state and metro RPP scores and note the percentage gap between them to see if a single metro is driving statewide results BEA Regional Price Parities.

Step 2, Check housing indices. Look at median rent and median home price trends from sources like Zillow and BLS, and note whether rent growth or sale prices are moving faster than the national trend Zillow Research housing indices.

Step 3, Factor in taxes and health costs. Use state tax burden data and living-wage outputs to estimate after-tax affordability and whether local wages are sufficient for your household size Tax Foundation state and local tax burden.

Tool suggestion: how to use public datasets to build a quick comparison

Download the BEA RPP tables for the state and metro you care about, the BLS regional CPI table for the same metro, Zillow housing indices for rent and sale price trends, and the Tax Foundation tax-burden table for state tax context BEA Regional Price Parities.

In a simple spreadsheet create these columns: area, RPP, metro RPP, median rent, median home price, state tax burden, living-wage estimate. Add notes for the dataset year so you compare aligned vintages.

Watch for alignment issues, for example different reference years or metro definitions. Record which table and year you used so you can re-run the check with updated data later.

Common mistakes and traps when identifying expensive states or cities

Relying on a single data point is a common error. Using only median home values or only headline rankings can mislead because they ignore other cost categories and tax effects Zillow Research housing indices.

Another trap is ignoring metro-state differences. A statewide ranking can hide that a particular metro is unusually expensive while most of the state remains more affordable. Always compare the metro-level figures to the statewide numbers to spot this.

Finally, check the data vintage and methodology. Different sources update on different schedules, so align years where possible to make an apples-to-apples comparison.

Practical examples: single earner, family, and retiree scenarios

A single earner on a local salary will feel housing pressure differently than a family that needs multiple bedrooms or a retiree who spends more on healthcare. Use living-wage and rent data together to see whether income and costs are in balance for your household type Living Wage Calculator.

For a family, compare median home prices and family-size living-wage benchmarks alongside state tax burdens. For retirees, add regional health-cost indicators and insurance premium trends to your check list.

Run the three-part metrics checklist for each scenario rather than trusting a single ranking. That produces a practical, personalized picture of how expensive a place will feel.

What recent rankings show: states often listed as most and least expensive

Multi-metric rankings combine price indices, housing, and other factors. They are useful for a quick orientation but should be read alongside the underlying datasets. For example, U.S. News and similar rankings use a mix of metrics to identify generally high- and low-cost states U.S. News multi-metric rankings.

States that commonly appear near the top for expense include Hawaii, California, New York, and Massachusetts. States that often appear near the bottom in cost rankings include Mississippi, Arkansas, and Oklahoma. These patterns reflect consistent differences in housing and tax levels more than one single factor.

Before relying on any ranking for a move decision, check which metrics the ranking uses and whether they match your personal priorities.

How to decide for your move: evaluation criteria and trade-offs

Weigh wages, taxes, housing, and services when making a move decision. Start by listing which of these matter most to your household, then use the three-part metrics checklist to score each location on those criteria BEA Regional Price Parities.

Set a timeline and revisit the data if you plan a move more than a few months out. Local housing markets can shift quickly, and updated datasets will give a clearer picture when you are ready to act.

Where to find primary sources and how to cite them

Primary sources to consult include BEA RPP tables, BLS regional CPI tables, Zillow Research housing indices, Tax Foundation tax-burden tables, and the MIT Living Wage Calculator BEA Regional Price Parities. Also see FRED’s RPP tables https://fred.stlouisfed.org/release/tables?eid=233639&rid=403, a FRBSF analysis https://www.frbsf.org/research-and-insights/publications/economic-letter/2025/04/changing-disparity-in-prices-across-states/, and ProximityOne’s RPP tool https://proximityone.com/rpp.htm for complementary tables.

Note the dataset date and read the methodology notes. Many comparisons fail because two sources use different reference years or different metro definitions. When you publish or share your findings, include the table name and year to make your comparison reproducible.

Prefer primary tables over headline media summaries when accuracy matters. Primary tables let you align vintages and check exact variable definitions.

Key takeaways and next steps for readers who want to compare places

Combine BEA RPPs for overall price level, Zillow or BLS housing indices for housing pressure, and Tax Foundation or living-wage outputs for after-tax affordability to get a balanced picture Zillow Research housing indices.

Check metro-level data when a state contains expensive metros, and run the three-part checklist for different household scenarios so you see how a place will feel based on your own priorities.

Save a short spreadsheet with the fields suggested earlier and update it with the latest tables before making a move decision.