8 Most Expensive Cities in the U.S. (2023 Update)
Young people and professionals have plenty of reasons to gravitate towards city life. Median incomes are over $15,000 more in urban versus rural areas, poverty is lower, and from art museums to professional sports, there’s no shortage of culture and excitement.
Cities are undoubtedly rich in opportunity, but with the demand comes higher prices. It seems like you also have to be rich even to afford the rent in many places. Learn how high the cost of living can be as we explore the most expensive cities in the United States.
The 10 Most Expensive Cities in the United States
1. New York City, NY
|Median Annual Household Income:||$67,997|
|Median Monthly Rent:||$1,602|
New York City is unsurprisingly the most expensive city in America, thanks primarily to its position as the country’s economic hub, justifying high incomes and notorious rent prices. Housing demand is intense given the population density, so even studio apartments have a median monthly rent of $1,457.
Manhattan leads the boroughs in wealth and high prices. The median income is nearly $17,000 higher than the total NYC median, and rent is over $200 more.
Nearly 1 million millionaires call the city home, giving local businesses plenty of slack to drive up the cost of food and other goods. Average rent prices show a massive disparity from medians because of the number of wealthy individuals.
The average rent is over $6,000, the highest in the nation. Meanwhile, the median rent is only $1,602, which is high but no more so than some of the other most expensive cities on this list. Getting by is easy for the elite, but the numbers reveal a bottom-heavy income range, and 18% of the city’s residents live in poverty.
2. Honolulu, HI
|Population:||1,016,508 (Honolulu County)|
|Median Annual Household Income:||$90,704|
|Median Monthly Rent:||$1,884|
Though they may be limited, tropical island life does have its downsides, and they’re primarily related to expenses. With greater challenges in receiving goods, shipping price increases are passed to consumers. As Hawaii’s capital, principal port, and most populous city, Honolulu also has the economy and density to warrant some of America’s highest costs.
Honolulu’s cost of living is over 90% greater than the country’s average. Median rent is over $200 greater than in NYC, and at $781,600, median home values are roughly $500,000 higher than the national median. Fortunately, the extra-high incomes keep nearly everyone comfy despite the costs. The city enjoys a minor 10.2% poverty rate, over 1% lower than the national average.
3. San Francisco, CA
|Median Annual Household Income:||$121,826|
|Median Monthly Rent:||$2,167|
California’s Bay Area is the unofficial capital of trendiness, and as its thriving hub, San Francisco boasts one of the nation’s highest costs of living.
Housing costs take the greatest hit in San Francisco. The median monthly rent of $2,167 is nearly two times the national average, and the median home value is an astonishing $1.3 million! Thankfully, high-paying tech companies give the typical income a massive boost. Despite the expense, San Francisco has an 11.3% poverty rate, aligning with the national average.
4. Los Angeles, CA
|Median Annual Household Income:||$77,456|
|Median Monthly Rent:||$1,711|
As home to the stars, successful sports teams, an expansive art scene, and sunny weather year-round, Los Angeles can appeal to anyone. But while the attractions are diverse, high costs are a consistent theme no matter where you go.
The city suffers higher prices for many of the same reasons as San Francisco. California is one of the most eco-focused states in the country, causing sky-high gas prices and more development costs to stay compliant with their high standards.
Everything is more expensive in Los Angeles due primarily to the 9.5% sales tax, one of the worst in the country. With the prime beachside locations, a bustling economy, and markets like Beverly Hills, median home values are some of the nation’s highest at over $800,000.
5. Boston, MA
|Median Annual Household Income:||$79,283|
|Median Monthly Rent:||$1,808|
Boston plays host to some of the country’s finest universities alongside a healthy, diverse economy highlighted by tech, sports, healthcare, and history. High costs come with a booming economy, and though Boston isn’t as expensive as NYC, it’s still 50% pricier than the average American town.
A high volume of low-income college students helps temper some costs around goods and services. Housing is the primary concern, as already scant market options grow fewer with a rising populace. Interestingly, home values, at a median of $659,700, aren’t too egregious compared to other cities, but the median rent of over $1,800 is one of the worst in the country.
6. Washington, D.C.
|Median Annual Household Income:||$90,088|
|Median Monthly Rent:||$1,668|
The home of American politics has always appealed to tourists, but a thriving economy and real estate conditions play essential roles in making Washington, D.C., one of the most expensive cities in the U.S.
Despite attracting wealthy and high-income workers, D.C. isn’t wildly pricey across the board. Transportation and the costs of goods are low in comparison to many other expensive cities, and utilities are actually below the national average.
The real struggle in the nation’s capital is real estate. High-paying private sector and government jobs draw well-educated employees and increase housing demand. Land is already limited in the city, and median home values currently stand at $669,900.
7. Seattle, WA
|Median Annual Household Income:||$110,781|
|Median Monthly Rent:||$1,787|
Seattle’s tranquil position by Puget Sound provides a beautiful setting for city life far from the high-profile goings-on of cities like Los Angeles and NYC. It has cultivated a strong reputation as a center for tech, primarily due to Amazon’s presence, and its 21% population growth since 2010 has outpaced most cities over the last decade.
Expenses have expanded as much as the economy because of the squeeze on real estate. The median monthly rent is $1,787, and median home values are even higher than those in Los Angeles, reaching nearly $850,000.
In King County, the average home cost is over $1 million, but with high-paying tech jobs, median household incomes exceed $110,000, making most residents uniquely poised to handle the higher cost of living.
8. Oakland, CA
|Median Annual Household Income:||$82,236|
|Median Monthly Rent:||$1,737|
Oakland seems like a much more affordable alternative to San Francisco, with median rents costing over $400 less. Meanwhile, median home values are nearly $500,000 lower!
Nevertheless, Oakland’s proximity to San Francisco makes it one of the most expensive cities in the country. Despite having a lower median rent than its Bay Area neighbor, Oakland has a higher average rent.
Unfortunately, Oakland’s residents aren’t as well-positioned to manage higher overall costs. The median household income is almost $40,000 less than in San Francisco, resulting in a higher poverty rate of 13.8%.
What Is the Most Expensive City in America?
The Council for Community and Economic Research manages the quarterly Cost of Living Index, measuring differences in costs between cities across six categories:
In 2022, the New York borough of Manhattan took the top spot, with Honolulu and San Francisco following behind. Brooklyn has the fourth-highest cost of living.
Interestingly, the most expensive cities are not the costliest in every category. According to the index, Kodiak and Juneau in Alaska have the highest grocery costs in the country yet fail to make the list of the country’s most expensive places.
The most expensive cities in the U.S. are also some of the most exciting, and you may decide to swallow the cost of living for the opportunity of a lifetime. However, not all cities are created equal, and the cheapest one doesn’t necessarily mean it’s the most comfortable. Keep that in mind if these costly locales are on your short list of potential destinations.
Featured Image Credit: marekr, Pixabay