In this article, we will look into the 20 most expensive states to live in 2024. If you want to skip our detailed analysis, you can go directly to the 5 Most Expensive States to Live in 2024.
According to the Economic Policy Institute's analysis of the 2022 consensus data, US fiscal reliefs in response to the pandemic strengthened the economy and helped millions of residents avoid joblessness and poverty in 2020 and 2021. The US labor market surged after the Covid recession in 2022. Unemployment rates went down with a surge in job creation in the market. The job growth in the market can be attributed to policy interventions such as unemployment insurance reform and economic impact payments. These initiatives facilitated a much faster recovery compared to previous economic downturns.
Despite the positive trajectory in the US job market, inflationary shocks continued to present a significant challenge. In 2022, payroll employment surged by 4.3% and the average nominal wage increased by 5.4%, but this growth was challenged by a significant 8% rise in inflation. Rising inflation rates resulted in a decline in real wages, ultimately affecting the living standards of most Americans. This trend of inflationary shocks is particularly concerning in states including California, Arizona, and Colorado, as they are currently experiencing the highest inflation rates in the US.
Cost of Living in the United States
The United States is one of the most expensive countries in the world. With rising inflation, the cost of living has become one of the biggest challenges faced by families living in the US. The price of food, energy, fuel, and other utilities have significantly increased, affecting the living standard of the residents in the country. According to an article by Bloomberg, published on November 27, the price of buying the same goods and services for a family has increased to $119.27 from $100 after the pandemic. The prices in the US have surged since early 2020, surpassing levels not seen in a decade before the pandemic. Since January 2020, grocery prices have risen 25%, and rents have increased by nearly 20% in 2023. These price hikes have left the residents dissatisfied with the economy and their living standards. Housing affordability has plunged to its lowest level. Homeownership has become out of reach for many Americans, as median home prices continue to climb. These rising costs are particularly alarming in some of the US states with the highest average home prices such as Hawaii, California, and Colorado. The median home prices in these states have exceeded $700,000.
Companies Thriving in an Inflationary Environment
While many sectors struggle amidst rising costs in the US, with inflation corrupting purchasing power in the country, consumer staples companies are rather secure from such market fluctuations. While customers can easily cut back on non-essential products during economic downturns, essential livelihood products remain in constant demand. The inelastic demand in the consumer staples sector makes it a rather stable market, regardless of the economic climate. Companies in the consumer staple sectors can usually afford to offer regular dividend payouts to investors due to their consistent profitability, despite economic fluctuations. According to the Fidelity 2023 sectors outlook, the S&P Consumer Staples Select Sector index held its ground, gaining 0.37% compared to the S&P 500's significant 16.17% drop, highlighting the relative stability of the sector.
Some of the major names in the consumer staples sector include The Procter & Gamble Company (NYSE:PG), Walmart Inc. (NYSE:WMT), and General Mills, Inc. (NYSE:GIS).
The Procter & Gamble Company (NYSE:PG) recorded strong sales despite rising costs, exemplifying the resilience of consumer staples companies and their ability to maintain consistent demand in a fluctuating economy. On October 18, The Procter & Gamble Company (NYSE:PG) reported its earnings for the fiscal first quarter of 2024. The company reported an EPS of $1.83 and beat estimates by $0.13. The Procter & Gamble Company (NYSE:PG) reported revenue of $21.87 billion and surpassed estimates by $292.13 million. The company's revenue for the quarter grew by 6.11%.
Here are some of the comments from The Procter & Gamble Company's (NYSE:PG) Q1 2024 earnings call:
"In the US, all outlet value share was up 50 basis points versus prior year with seven of 10 categories holding or growing value share in the quarter. US volume share was up 60 basis points, reflecting 3% volume growth. Value share in European focus markets was up 40 basis points over the past three months. Moving to the bottom line, core earnings per share were $1.83, up 17% versus prior year. On a currency-neutral basis, core EPS increased 21%. Core operating margin increased 240 basis points, as 460 basis points of gross margin expansion were partially offset by increased marketing investments, wage and benefit inflation, and foreign exchange impacts on SG&A. Currency-neutral core operating margin increased 340 basis points. Productivity improvements were a 210 basis point help to the quarter.
On December 5, the leading American multinational retail corporation, Walmart Inc. (NYSE:WMT) announced the launch of its first-ever sustainable eyewear brand, Karün. The new eyewear brand features products that are made from recycled materials including fishing nets and metals. Aligning with Walmart Inc.'s (NYSE:WMT) commitment to sustainability and affordability, the new eyewear offers customers eco-friendly options at accessible prices. Karün is available in 18 styles for prices between $114 and $132. Catering to customers' rising demand for green alternatives, Karün will be available at 1.400 vision centers.
General Mills, Inc. (NYSE:GIS) is a multinational manufacturer and marketer of processed consumer food products in the US. On November 9, the company announced that it had acquired a pet supplement company, Fera Pets. This acquisition will bring a vast range of health-focused products to General Mills, Inc.'s (NYSE:GIS) pet portfolio. This acquisition marks the first-ever investment of the company in the pet supplement category. This addition to the company's portfolio will address the rising demand for high-quality pet wellness products.
On October 17, General Mills, Inc. (NYSE:GIS) announced its partnership with Walmart Inc. (NYSE:WMT) and Sam's Club to expedite regenerative agriculture on 600,000 acres by 2030. The partnership will focus on the key ingredient-sourcing regions in the Northern and Southern Great Plains. The companies will fund farmers to improve soil health, biodiversity, and farmer resilience, and ensure long-term food supply for both companies. This collaboration will help General Mills, Inc. surpass its 1 million-acre objective and contribute to Walmart Inc.'s (NYSE:WMT) land restoration goal of 50 million acres.
With this context, let's take a look at the 20 most expensive states to live in 2024.
20 Most Expensive States to Live in 2024
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Our Methodology
To compile our list of the 20 most expensive states to live in 2024, we utilized the Missouri Economic Research and Information Center's (MERIC) cost of living data. The MERIC's cost of living data gives us a detailed insight into the expenses in the United States, encompassing various aspects such as housing, transportation, grocery, utilities, and other expenditures. Our list ranks states in ascending order of the cost of living index, as of the third quarter of 2023.
20 Most Expensive States to Live in 2024
20. Nevada
Cost of Living Index: 101.1
Nevada is ranked among the most expensive states to live in 2024. According to the MERIC, Nevada reports a cost of living index of 101.1. Transportation and housing are the major contributors to the high cost of living in Nevada.
19. Virginia
Cost of Living Index: 101.4
Virginia is ranked 19th on our list, reporting a cost of living index of 101.4, according to the MERIC. Housing expense is the primary contributor to the high cost of living in Virginia.
18. Montana
Cost of Living Index: 103.1
Montana ranks 18th on our list, reporting a cost of living index of 103.1, according to MERIC. Transportation is a major expense in Montana, followed by housing expenses.
17. Utah
Cost of Living Index: 104.5
Utah is ranked among the most expensive states to live in 2024. According to the MERIC, Utah reports a cost of living index of 104.5. Housing and transportation costs are the primary contributors to the high cost of living in Utah.
16. Colorado
Cost of Living Index: 106.9
Ranked 16th on our list, Colaroda reports a relatively high cost of living of 106.9, according to the MERIC. High housing expenditure coupled with utilities and transportation costs make Colorado an expensive state to live in.
15. Arizona
Cost of Living Index: 110.0
Arizona is ranked 15th on our list, reporting a cost of living index of 110, according to the MERIC. Housing expense is the major contributor to the high cost of living in Arizona.
14. New Jersey
Cost of Living Index: 110.3
According to the MERIC, New Jersey has a cost of living of 110. Some of the key contributors to New Jersey's cost of living include housing, utilities, and transportation. It is ranked 14th on our list.
13. Maine
Cost of Living Index: 110.7
Maine is ranked among the most expensive states to live in 2024. According to the MERIC, Maine reports a cost of living index of 110.7. Transportation, utilities, and housing are the major contributors to the high cost of living in Maine.
12. Rhode Island
Cost of Living Index: 112.0
Ranked 12th on our list, Rhode Island reports a relatively high cost of living of 112, according to the MERIC. High housing expenditures coupled with utilities make Rhode Island an expensive state to live in.
11. Connecticut
Cost of Living Index: 113.9
Connecticut is ranked 11th on our list, reporting a cost of living of 113.9, according to the MERIC. Utility expenditure is the key contributor to the high cost of living in Connecticut.
10. Oregon
Cost of Living Index: 114.7
Oregon is ranked among the most expensive states to live in 2024. According to the MERIC, Oregon reports a cost of living index of 114.7. Transportation and housing are the major contributors to the high cost of living in Oregon.
9. Maryland
Cost of Living Index: 114.8
Ranked 9th on our list, Maryland reports a relatively high cost of living of 114.8. Maryland is one of the most expensive states to live in 2024.
8. Vermont
Cost of Living Index: 114.9
Vermont is ranked 8th on our list, reporting a cost of living index of 114.9. Housing expense is the primary contributor to the high cost of living in Vermont.
7. New Hampshire
Cost of Living Index: 115.6
Ranked 7th on our list, New Hampshire reports a relatively high cost of living of 115.6, according to the MERIC. High utility expenditures coupled with housing and transportation costs make New Hampshire an expensive state to live in.
6. Washington
Cost of Living Index: 115.7
Washington is ranked among the most expensive states to live in 2024. According to the MERIC, Washington reports a cost of living index of 115.7. Transportation and housing are the key contributors to the high cost of living in Washington.