Inflation has fallen considerably, but it is still too high for Federal Reserve policymakers’ tastes. And tariffs make the calculation even more complicated.
“We’ve had goods inflation just moving up a bit,” said Fed Chairman Jerome Powell at a news conference last month. “We do expect to see more of that over the course of the summer. It takes some time for tariffs to work their way through the chain of distribution to the end consumer.”
CNBC considers Cost of Living among ten categories of competitiveness in our annual America’s Top States for Business rankings. Companies seeking to attract as many workers as they can — and reduce their own wage costs — like to locate in places that are affordable. So, 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, C2ER. We also consider housing affordability. And, with an insurance crisis spreading across the country, we measure the cost to insure a median priced home based on the most recent available data. Under this year’s methodology, Cost of Living is worth 2.4% of each state’s total score.
Some states remain very expensive for residents. Others are doing a fair job in the fight to keep costs down. Based on the 2025 Cost of Living category points totals — which results in some tie scores between states, though only one that can be called the nation’s “least expensive” — here are America’s cheapest states to live in, along with average prices in 2024 of some basic items in key metro areas.
Michigan
Kalamazoo, Michigan.
Sean Pavone | Istock | Getty Images
Shocked at the price of eggs? Head to Kalamazoo, where you’ll pay around 20% less per dozen than they are paying in Newark, New Jersey (prices in this list were compiled last year, before egg prices began rising again, but the difference remains about the same). And the cost of a new home in Michigan is less than half what they are paying in New Jersey.
2025 Cost of Living Score: 39 out of 60 points (Top States Grade: B–)
Consumer Price Index (May, Midwest Region): +2.4%
Annual Homeowner’s Insurance: $3,290
Average Home Price (Kalamazoo): $298,697
Dozen Eggs (2024): $2.99
Monthly Energy Bill: $203.46
Iowa
This winding country road in northwest Iowa.
Darcymaulsby | Istock | Getty Images
The Hawkeye State has home field advantage when it comes to corn, which will cost you about 16% less at the supermarket than they are paying in Washington, D.C. Speaking of home, housing prices in Iowa are among the most affordable in the nation. But one thing that is becoming less affordable is insurance. Online insurance marketplace Insurify projects that the average Iowa homeowner will pay $3,825 for insurance this year, a 19% jump from last year. Premiums have been rising since the 2020 derecho, a massive wind storm that destroyed some 8,000 homes and did millions of dollars in damage. A parade of severe weather has followed, bringing higher premiums along with it.
2025 Cost of Living Score: 39 out of 60 points (Top States Grade: B–)
Consumer Price Index (May, Midwest Region): +2.4%
Annual Homeowner’s Insurance: $3,825
Average Home Price (Burlington): $320,694
Dozen Eggs (2024): $3.24
Monthly Energy Bill: $215.83
Delaware
Wilmington, Delaware
Halbergman | Istock | Getty Images
Despite its coastal location, The First State has managed to dodge the insurance crisis, at least so far. Premiums in Delaware are about one-tenth of what they are in Florida. It helps that the state has managed to avoid natural disasters in recent years, and that the population is relatively sparse. Housing costs in general are reasonable for most homeowners and renters in Delaware. According to Census data, only about 26% of them are spending more than one-third of their household income on housing. In California, that number is more than 39%.
2025 Cost of Living Score: 39 out of 60 points (Top States Grade: B–)
Consumer Price Index (May, South Region): +2%
Annual Homeowner’s Insurance: $1,693
Average Home Price (Dover): $370,378
Dozen Eggs (2024): $3.20
Monthly Energy Bill: $199.31
Wyoming
Old House with the Tetons Mountains in the background at Mormon Row
Jose A Feliciano Cestero | Istock | Getty Images
The Cowboy State has managed to rein in housing and insurance costs. Seventy-five percent of Wyoming homeowners and renters pay less than 30% of their household income on housing. Insurance premiums are projected to rise by about 7% this year, but that is less than the average increase nationwide of around 8.5%. Home prices are running about 17% less than in neighboring Montana.
2025 Cost of Living Score: 41 out of 60 points (Top States Grade: B)
Consumer Price Index (May, West Region): +2.4%
Annual Homeowner’s Insurance: $2,424
Average Home Price (Laramie): $426,326
Dozen Eggs…
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