As Americans continue facing higher prices for everything from housing to groceries, data reveals where they live can make a significant difference in how far their paycheck goes. A new cost-of-living index ranks the states putting the biggest squeeze on household budgets, revealing where everyday expenses are highest across the country.
The rankings highlight how dramatically living costs can vary from one state to another. And those differences can shape everything from monthly household budgets to long-term decisions about where Americans choose to live, with housing emerging as the biggest affordability driver.
The latest data also arrive as the issue remains central to the upcoming 2026 midterm elections, with inflation, housing costs and the broader economy expected to remain top concerns for many voters as they head to the ballot box in November.
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The Missouri Economic Research and Information Center’s (MERIC) quarterly Cost of Living Index estimates statewide living costs using price data collected from participating cities and metropolitan areas. The composite index measures six categories of household spending, with a score of 100 representing the national average. States above that benchmark are more expensive than average, while those below it are more affordable.
Housing proved to be the biggest differentiator among states.
Hawaii’s geographic isolation has long contributed to higher prices for everything from building materials to consumer goods, and the state posted a housing index of more than 300, far above every other state, helping propel it to the top of the overall rankings.
Massachusetts followed with the nation’s second-highest cost of living, driven largely by elevated housing costs and above-average prices across several everyday spending categories. Alaska, California and New York completed the top five.
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Meanwhile, Oklahoma topped the list as America’s most affordable state, followed by Alabama, Mississippi, Kansas and West Virginia.
The South dominated the rankings, with Kansas joining the group from the Midwest.
Those states benefited from substantially lower housing costs and generally ranked on the low-end of the spectrum when it came to transportation, utility and other everyday expenses, helping keep overall living costs well below the national average in these states.
The state-by-state rankings also align with broader migration trends that have reshaped the country in recent years.
IRS data show many of the nation’s highest-cost states, like New York and California, have experienced significant losses of taxpayers and income to other parts of the country.
Taken together, the rankings and migration data suggest the cost of everyday life may influence more than monthly budgets, offering a broader look at how affordability and population shifts are unfolding across the nation.
