2018 Cities with the Lowest Cost of Living Methodology

The 2018 Places with the Lowest Cost of Living ranking provides a comprehensive assessment of the affordability of an area. This grade takes into account key factors, including a location’s housing, food, and fuel costs, as well as the median tax rates, in an attempt to measure the overall affordability and relative cost of living of an area. Learn where our data comes from.

Factors Considered

Home Value to Income Ratio The ratio of the median home value to the median family income, where lower is considered better. U.S. Census 15.0%
Median Home Value The median home value for the area, where least expensive is considered better. U.S. Census 15.0%
Median Rent The median rent for an area, where least expensive is considered better. U.S. Census 15.0%
Monthly Housing Cost to Income Ratio The ratio of the median monthly housing cost for homeowners to the median monthly household income, where lower is better. U.S. Census 15.0%
CPI Gas Index Consumer Price Index of regular grade, unleaded gas compared to the national average in 2015 (lower is better). Bureau of Labor Statistics 10.0%
CPI Grocery Index Consumer Price Index of various grocery items compared to the national average in 2015 (lower is better). Bureau of Labor Statistics 10.0%
Median Effective Property Tax The percent of the median property taxes paid on homes over the median home value. U.S. Census 10.0%
Rent to Income Ratio The ratio of the median monthly rent to the median monthly individual income, where lower is better. U.S. Census 5.0%
State Tax Share The percentage of income the average unmarried earner pays in state taxes. Tax Foundation 5.0%

 

The same methodology is used to produce the Cost of Living Grade for each ranked place. Statistics are primarily obtained from the U.S. Census and represent the most recent data available.

For more details about how we calculate our rankings, click here.