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These States Are America's Most Expensive to Live in for 2023

An aerial view of new home construction at a housing development in the Phoenix suburbs on June 9, 2023 in Queen Creek, Arizona.
Mario Tama | Getty Images
  • Inflation is coming down, with the latest CPI report for June showing price increases hitting their lowest level in two years, but it has not gone away, and in some states, it is far worse than others.
  • The annual CNBC America’s Top States for Business study considers cost of living among 10 categories of competitiveness.
  • With the nation facing a serious housing crisis, the 2023 study puts extra emphasis on housing affordability.

Inflation has eased considerably from the more than 40-year high hit last year, and the latest consumer price index reading for June showed prices rising by the lowest level since March 2021. But inflation is still stubbornly high nationwide. And in some states, it is more stubborn than in others.

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The cost of living is a key factor in a state's overall competitiveness, which is why CNBC's annual America's Top States for Business study considers it in our methodology when ranking the states.

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. New this year, with the nation mired in a housing affordability crisis, we are also factoring in data from the National Association of Realtors' Affordability Distribution Score, which looks at the affordability of homes for sale across all income levels as of the end of last year. A score of 1 or higher generally suggests a housing market that is affordable, while the lower a score falls below 1, it is an indicator of a less affordable market without enough listings in local buyers' range.

Some states are relative bargains even in these inflationary times — America's cheapest states to live in. But the following states are no bargain at all: brace yourself for a tour through America's most expensive states.

9. (tie) Arizona

The Grand Canyon State is no stranger to growing pains. But as the population surges, the supply of homes in Arizona is falling further and further behind the demand. The average price of a four-bedroom, 2,400-square-foot house in Lake Havasu City topped $1 million last year, or more than twice what it would cost in Sarasota, Florida.

2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.51 out of 2.00

Average Home Price (Lake Havasu City): $1,004,158

Half Gallon of milk (Phoenix): $2.09

Monthly Energy Bill (Phoenix): $264.56

An 'Available' and 'Sold' signs outside of new homes in the CBH Homes Calvary Springs Community in Nampa, Idaho.
Kyle Green | Bloomberg | Getty Images
An 'Available' and 'Sold' signs outside of new homes in the CBH Homes Calvary Springs Community in Nampa, Idaho.

9. (tie) Idaho

Idaho is another state where a red-hot real estate market is putting overall living costs increasingly out of reach. Based on income levels, Idaho ties with Montana and Hawaii for the lowest affordability in the nation, according to the National Association of Realtors. And the home prices have rippled into the rental market, where a two-bedroom apartment at $1,600 a month will cost you twice what it would in Hot Springs, Arkansas. But you can still get a deal on this state's most famous export: $2.21 for a 5-pound sack of potatoes is less than half what you would pay in Decatur, Illinois.

2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.42 out of 2.00

Average Home Price (Boise): $576,971

Half Gallon of Milk (Twin Falls): $2.79

Monthly Energy Bill (Boise): $126.17

Registered nurse Rachel Chamberlin, of Cornish, N.H., left, tends to COVID-19 patient Fred Rutherford, of Claremont, N.H., right, in an isolation room at Dartmouth-Hitchcock Medical Center, in Lebanon, N.H., Monday, Jan. 3, 2022.
Steven Senne | AP
Registered nurse Rachel Chamberlin, of Cornish, N.H., left, tends to COVID-19 patient Fred Rutherford, of Claremont, N.H., right, in an isolation room at Dartmouth-Hitchcock Medical Center, in Lebanon, N.H., Monday, Jan. 3, 2022.

9. (tie) New Hampshire

Health-care costs are the biggest driver of inflation in New Hampshire, the Granite State, where a visit to the doctor will cost you more than $175, or twice what it would cost in Baltimore. A trip to the dentist, at more than $150, is nearly twice what it would cost in Peoria, Illinois. And your $115 eye doctor appointment is 36% more than it would cost in Detroit.

2023 Cost of Living score: 13 out of 50 points (Top States grade: D-)

Consumer Price Index (June, Northeast Region): Up 2.2%

Housing Affordability Score: 0.57 out of 2.00

Average Home Price (Manchester): $441,922

Half Gallon of Milk: $2.66

Monthly Energy Bill: $225.85

National Grid worker Jesus Garcia checks on the valves in an underground gas substation on Broadway Street in Newport, RI, as purging of gas from the lines was ongoing.
John Tlumacki | Boston Globe | Getty Images
National Grid worker Jesus Garcia checks on the valves in an underground gas substation on Broadway Street in Newport, RI, as purging of gas from the lines was ongoing.

8. Rhode Island

According to the U.S. Department of Energy, Rhode Islanders are far more dependent on natural gas and heating oil that any other state. That helps explain why energy costs in Rhode Island are so high. You will pay twice the monthly energy bill that you would if you lived in Laramie, Wyoming. Prices spiked here last year due to the war in Ukraine. They have come down somewhat, but still not enough to make the Ocean State affordable.

2023 Cost of Living score: 12 out of 50 points (Top States grade: D-)

Consumer Price Index (June, Northeast Region): Up 2.2%

Housing Affordability Score: 0.52 out of 2.00

Average Home Price (Providence): $462,061

Half Gallon of Milk: $2.42

Monthly Energy Bill: $251.32

Seattle's housing market is experiencing explosive growth as employers boost hiring.
Getty Images
Seattle's housing market is experiencing explosive growth as employers boost hiring.

7. Washington

Depending on where you live in Washington, housing prices in the Evergreen State can be downright oppressive — close to $1 million for a four-bedroom home in Seattle, and $3,600 a month to rent a two-bedroom apartment. Food costs are high, too. Expect to pay more than $5 for a loaf of bread, or twice what you would pay in Midland, Texas.

2023 Cost of Living score: 11 out of 50 points (Top States grade: D-)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.51 out of 2.00

Average Home Price (Seattle): $940,665

Half Gallon of Milk: $2.97

Monthly Energy Bill: $188.83

A 55-and-older community in Bozeman, Montana.
Contessa Brewer | CNBC
A 55-and-older community in Bozeman, Montana.

6. Montana

Montana became such a popular refuge during the pandemic that Big Sky Country now has big home prices to match. Montana is in a three-way tie with Idaho and Hawaii for the least affordable home prices in the nation. According to the Federal Housing Finance Agency, home prices rose 55% from before the pandemic through the end of last year. Prices have now begun to drop as mortgage rates rise, but that is raising concerns about housing market stability.

2023 Cost of Living score: 10 out of 50 points (Top States grade: F)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.42 out of 2.00

Average Home Price (Bozeman): $719,461

Half Gallon of Milk: $2.24

Monthly Energy Bill: $140.00

The sun rises behind the skyline of midtown Manhattan, Hudson Yards, and the Empire State Building in New York City as a man walks his dog along the Hudson River on June 25, 2023, in Hoboken, New Jersey.
Gary Hershorn | Corbis News | Getty Images
The sun rises behind the skyline of midtown Manhattan, Hudson Yards, and the Empire State Building in New York City as a man walks his dog along the Hudson River on June 25, 2023, in Hoboken, New Jersey.

5. New York

Real estate prices in the five boroughs of New York City are in the stratosphere compared to the rest of the country, though higher wages help affordability. But it is not just housing that makes it so expensive to live in New York, and it's not just New York City. Basic goods and services can be expensive statewide. Getting a men's suit dry cleaned in Albany will cost you more than double what it would cost in Columbia, South Carolina.

2023 Cost of Living Score: 9 out of 50 points (Top States grade: F)

Consumer Price Index (June, Northeast Region): Up 2.2%

Housing Affordability Score: 0.56 out of 2.00

Average Home Price (Manhattan): $2,434,977

Half Gallon of Milk: $3.04

Monthly Energy Bill: $183.24

Homes seen in South Boston from Dorchester Heights on March 21, 2023 in Boston, Massachusetts.
Matt Stone | Medianews Group | Boston Herald via Getty Images
Homes seen in South Boston from Dorchester Heights on March 21, 2023 in Boston, Massachusetts.

4. Massachusetts

Renting a two-bedroom apartment in Boston will cost you more than six times what it would cost in Kalamazoo, Michigan, as high costs in Massachusetts, the Bay State, ripple through the economy. Your average energy bill is more than two-and-a-half times what it would be in Baton Rouge, Louisiana. Health care is outstanding here, but a doctor's visit will cost nearly twice what it would in Kansas City, Missouri.

2023 Cost of Living Score: 7 out of 50 points (Top States grade: F)

Consumer Price Index (June, Northeast Region): Up 2.2%

Housing Affordability Score: 0.54 out of 2.00

Average Home Price (Boston): $921,897

Half Gallon of Milk: $3.13

Monthly Energy Bill:  $257.12

A house in Portland, Oregon.
Dennis Frates | Avalon | Universal Images Group | Getty Images
A house in Portland, Oregon.

3. Oregon

Housing affordability is a huge issue in the Beaver State, where homes are only slightly more affordable than the aforementioned three-way tie between Idaho, Montana and Hawaii. Just getting around Oregon can be expensive, with some of the highest gasoline prices in the nation, according to AAA.

2023 Cost of Living Score: 6 out of 50 points (Top States grade: F)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.45 out of 2.00

Average Home Price (Portland): $661,664

Half Gallon of Milk: $2.88

Monthly Energy Bill: $157.38

A new housing development built along a canal near the Mokelumne River is viewed on May 22, 2023, near Stockton, California.
George Rose | Getty Images
A new housing development built along a canal near the Mokelumne River is viewed on May 22, 2023, near Stockton, California.

2. California

For decades, California was the ultimate growth story. That changed in 2020, when the state lost population for the first time in a century. The exodus has continued, yet the Golden State still has a massive housing shortage. By one estimate, the state should be building 180,000 new units per year, but it is building only a fraction of that. The result is America's worst poverty and homelessness rates, and prices for many basic needs that are out of control. A dozen eggs in San Francisco costs nearly twice what it does in Yuma, Arizona.

2023 Cost of Living Score: 4 out of 50 points (Top States grade: F)

Consumer Price Index (June, West Region): Up 3.5%

Housing Affordability Score: 0.46 out of 2.00

Average Home Price (San Francisco): $1,502,557

Half Gallon of Milk: $3.38

Monthly Energy Bill: $267.64

A couple of Moli, or Laysan albatrosses (P. immutabilis) (endangered species) displaying courtship behavior close to homes at the Princeville Makai Golf Club on the Hawaiian Island of Kauai, Hawaii.
Wolfgang Kaehler | Lightrocket | Getty Images
A couple of Moli, or Laysan albatrosses (P. immutabilis) (endangered species) displaying courtship behavior close to homes at the Princeville Makai Golf Club on the Hawaiian Island of Kauai, Hawaii.

1. Hawaii

Hawaii has always been expensive due to its location, and the fact that so many basic items must be shipped here from somewhere else. But the housing crisis has made matters even worse. A 4-bedroom house in Honolulu will cost roughly four times what it would in Daytona Beach, Florida. Gas prices are among the nation's highest, and the only higher grocery bill in the U.S. is in Kodiak, Alaska. America's most expensive state might seem like paradise, but the prices are hell.

2023 Cost of Living Score: 2 out of 50 points (Top States grade: F)

Consumer Price Index (May, Honolulu Area): Up 2%

Housing Affordability Score: 0.42 out of 2.00

Average Home Price (Honolulu): $1,605,915

Half Gallon of Milk: $4.32

Monthly Energy Bill: $309.47

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