Cost of Living Statistics in US 2025 | Key Facts

Cost of Living in US 2025

Understanding the cost of living in the United States in 2025 has become increasingly important for families, individuals, and those considering relocation. The financial landscape across American states and cities continues to show remarkable variation, with some metropolitan areas requiring twice the income to maintain the same standard of living as others. The economic pressures facing households have intensified, with inflation rates, housing shortages, and rising healthcare costs creating unique challenges for different demographic groups. These factors combine to create a complex picture where geographic location, household composition, and lifestyle choices significantly determine monthly expenditures.

The United States in 2025 presents a diverse economic environment where median household incomes have stabilized at $83,730 annually, yet purchasing power varies dramatically by region. Cities like San Francisco and New York command premium costs that far exceed the national baseline, while Midwestern and Southern states offer more affordable living conditions. Current data from the U.S. Bureau of Labor Statistics (BLS) indicates that the Consumer Price Index (CPI) rose 2.7 percent for the 12 months ending November 2025, reflecting continued but moderating inflationary pressures. This article examines verified government statistics to provide a comprehensive overview of living costs across essential categories including housing, food, transportation, healthcare, and utilities.

Interesting Facts and Latest Statistics on Cost of Living in the US 2025

Data Source: U.S. Bureau of Labor Statistics Consumer Price Index Reports (November 2025), Bureau of Transportation Statistics, U.S. Census Bureau Current Population Survey (2025)

The latest cost of living statistics for 2025 reveal that American households continue to navigate an environment of moderate inflation with significant regional variations. The overall inflation rate of 2.7% for the year ending November 2025 represents a decrease from the 3.0% recorded in September 2025, indicating some cooling in price pressures. However, specific categories show divergent trends that impact household budgets differently across income levels and geographic locations.

Median household income remained relatively stable at $83,730 in 2024, showing no statistical change from 2023’s figure of $82,690 according to the U.S. Census Bureau. This income stability, combined with decelerating inflation, has provided modest relief to household budgets. Nevertheless, the average hourly wage of $36.86 in November 2025 grew only 3.5% year-over-year, barely outpacing the 3.0% consumer price increases. The shelter index, which accounts for approximately one-third of the overall CPI, increased 3.0% over the past year, while essential categories like food at home rose 1.9% and medical care climbed 2.9%. Energy costs showed more volatility with a 4.2% annual increase, though gasoline prices averaged a relatively moderate $3.05 per gallon in November 2025. These statistics collectively paint a picture of an economy where cost pressures persist but at more manageable levels than in previous years.

Housing and Shelter Costs in the US 2025

Data Source: U.S. Bureau of Labor Statistics CPI Report (November 2025), Census Bureau Fair Market Rent Data, Apartment List National Rent Report (December 2025)

Housing costs in the US in 2025 remain the single largest expense category for most American households, consuming approximately 33% of the average household budget. The shelter component of the Consumer Price Index increased 3.0% in the 12 months ending November 2025, representing the lowest annual increase since October 2021. This moderation in housing inflation reflects increased apartment supply hitting the market, with over 600,000 new multifamily units completed in 2024—the highest annual supply addition since 1986. The multifamily vacancy rate reached a record high of 7.2% in November 2025, giving renters more options and reducing landlords’ pricing power.

The rental market presents a mixed picture across the nation. The national median rent for a one-bedroom apartment held steady at $1,495 in November 2025, unchanged from October, while the broader average rent across all bedroom sizes stood at $1,740 per month according to RentCafe data. Apartment List reports show that year-over-year rent growth has remained slightly negative for over two years, with the national median rent falling 5.1% from its August 2022 peak of $1,704 per month. Regional variations are substantial: Hawaii commands the highest average rent at $2,399 monthly, while North Dakota offers the nation’s most affordable market at just $821 per month. The U.S. Department of Housing and Urban Development (HUD) Fair Market Rent for a two-bedroom apartment nationwide increased by only $1.00 or 0.06% to $1,675 in 2025, reflecting the stabilization in rental costs. Property owners face increased competition as 243,000 multifamily units were completed in the first half of 2025, though this represents a 27% decrease from the second half of 2024, suggesting future supply constraints that could push rents higher again.

Food and Grocery Prices in the US 2025

Data Source: U.S. Bureau of Labor Statistics Consumer Price Index Food Report (November 2025)

Food costs in the United States in 2025 have shown moderate increases compared to the dramatic spikes experienced in 2021-2022. The overall food index rose 2.6% in the 12 months ending November 2025, down from 3.1% in the previous reporting period. This deceleration provides some relief for household budgets, though food remains a significant monthly expense. The distinction between food at home (groceries) and food away from home (restaurants) reveals important consumption patterns and pricing trends.

Grocery prices, measured by the food at home index, increased 1.9% annually through November 2025, representing one of the more modest increases in recent years. Within grocery categories, meats, poultry, fish, and eggs led price increases at 4.7%, driven by supply chain challenges and production costs. Beef prices showed particularly sharp increases, with steak prices jumping 16.6% year-over-year in August 2025, beef roasts rising 13.6%, and ground beef increasing nearly 13%. Egg prices climbed approximately 11% in the same period. Nonalcoholic beverages increased 4.3%, while cereals and bakery products rose 1.9%. Notably, the dairy and related products index declined 1.6%, the only major food category to show a decrease. Fruits and vegetables saw minimal increases of just 0.1%, though specific items like tomatoes jumped 4.5% in August 2025. Restaurant dining became notably more expensive, with food away from home prices rising 3.7% annually. Full-service restaurant meals increased 4.3%, while limited-service meals (fast food) rose 3.0%, reflecting higher labor costs in the hospitality industry and increased ingredient expenses.

Healthcare and Medical Costs in the US 2025

Data Source: U.S. Bureau of Labor Statistics Medical Care CPI (November 2025)

Healthcare costs in the US in 2025 continue to rise faster than general inflation, placing substantial burden on household budgets. The medical care index increased 2.9% in the 12 months ending November 2025, slightly above the overall 2.7% inflation rate. Healthcare expenses represent a complex category because the CPI methodology measures both out-of-pocket costs and the value of medical services paid by insurance, creating a comprehensive but sometimes counterintuitive measure of medical inflation.

The medical care services index rose 3.3% annually, encompassing professional services, hospital care, and related medical treatments. Hospital services showed the steepest increase at 3.4%, reflecting higher operating costs, labor shortages, and advanced medical technologies. Physicians’ services increased 2.8%, while other professional services also posted gains. The medical care commodities index, which includes prescription drugs and medical equipment, rose more modestly at 1.1%. Prescription drugs increased just 0.8%, benefiting from generic competition and pharmacy benefit management. However, health insurance premiums surged 4.6%, significantly outpacing other healthcare components and representing a growing burden for both employers and individuals. The Bureau of Labor Statistics revised its methodology in October 2024, incorporating secondary source medical claims data from national health insurance aggregators to more accurately measure price changes for services covered by private insurance. Medical care comprises approximately 8.7% of the overall Consumer Price Index weight, but actual household healthcare expenditures often exceed this proportion, particularly for families with chronic conditions or significant medical needs. Employers report healthcare cost increases closer to 7-8% annually when accounting for increased utilization and expanding service demands, substantially higher than the CPI medical care index suggests.

Transportation and Vehicle Costs in the US 2025

Data Source: Bureau of Transportation Statistics Motor Fuel Prices (November 2025), U.S. Bureau of Labor Statistics Transportation CPI

Transportation costs in the United States in 2025 showed modest overall increases but with significant variation across subcategories. The transportation Consumer Price Index rose 1.6% from November 2024 to November 2025, contributing 9.7% to the overall 2.7% increase in consumer prices. For most American households, transportation represents the second-largest monthly expense after housing, typically consuming 15-20% of household budgets.

Vehicle-related expenses dominated transportation inflation in 2025. Used cars and trucks prices increased 3.6% year-over-year, contributing 3.1% to the annual change in overall consumer prices—making it the single largest contributor among transportation items. The used vehicle market continued to adjust from pandemic-era supply shortages, though prices remained elevated compared to pre-2020 levels. New vehicle prices contributed 1.0% to transportation inflation, reflecting ongoing semiconductor supply issues and higher manufacturing costs. Motor vehicle maintenance and repair costs added 2.6%, driven by specialized labor shortages and expensive electronic vehicle components. Vehicle insurance premiums also climbed substantially, though specific percentage increases varied by state and driver profile.

Fuel costs showed relative stability in 2025. Regular gasoline averaged $3.05 per gallon in November 2025, down 0.3% from October and essentially flat year-over-year (down 0.1% from November 2024). Throughout 2025, gasoline prices fluctuated between $3.05 and $3.17 per gallon, significantly lower than the $3.61 peak reached in April 2024. Regional variations remained substantial, with Western states typically paying 20-30% more than Gulf Coast states. Diesel fuel prices told a different story, averaging $3.82 per gallon in November 2025, up 8.5% from the previous year, impacting commercial transportation costs and indirectly affecting consumer goods prices. Airline fares provided one of the few dampening effects on transportation inflation, declining 1.7% and reducing overall transportation cost pressures. Public transportation costs and vehicle leasing expenses showed mixed trends, with some metropolitan areas experiencing increases while others remained stable.

Income and Wage Trends in the US 2025

Data Source: U.S. Census Bureau Current Population Survey (2025), U.S. Bureau of Labor Statistics Average Hourly Earnings and Employment Cost Index (2025)

Income and wages in the United States in 2025 showed modest growth that generally kept pace with inflation, though significant disparities exist across demographic groups and income levels. The U.S. Census Bureau reported that real median household income was $83,730 in 2024, statistically unchanged from the $82,690 recorded in 2023. This stability followed several years of volatility and represents a return to near pre-pandemic income levels when adjusted for inflation.

Disaggregating these figures reveals important differences. Asian households experienced median income growth of 5.1% between 2023 and 2024, while Hispanic households saw even stronger gains at 5.5%, reaching a median income of $70,950. However, Black households suffered a 3.3% decline in median income during the same period. White and non-Hispanic White households experienced no significant change. These disparate outcomes reflect varying impacts from labor market changes, regional economic conditions, and industry-specific trends. Compared to pre-pandemic 2019 levels, only Hispanic households showed statistically significant income growth (4.3% increase), suggesting that recovery from economic disruptions has been uneven.

Average hourly earnings for all employees stood at $36.86 in November 2025, representing a 3.5% increase from the previous year. However, this growth rate marked the lowest annual wage growth since May 2021 and barely exceeded the 3.0% inflation rate, meaning real wage growth remained minimal. The picture varied substantially by income level: top earners saw 4% wage gains, while middle-income households experienced only 2.3% increases and low-income households gained just 1.4%. Median weekly earnings for full-time workers reached $1,196 in the second quarter of 2025, up 4.6% year-over-year, which did exceed the 2.4% Consumer Price Index increase for the same period. The Employment Cost Index, which measures total compensation costs including benefits, increased 3.6% for civilian workers in the 12 months ending September 2025. Wages and salaries rose 3.5% while benefit costs increased 3.8% for private industry workers. These moderate gains suggest that while employers continue to increase compensation, the rapid wage growth of 2021-2022 has substantially cooled, potentially constraining future consumer spending power.

State-Level Cost of Living Variations in the US 2025

Data Source: Missouri Economic Research and Information Center (MERIC) Q3 2025 Cost of Living Index, Council for Community & Economic Research (C2ER)

Cost of living variations across US states in 2025 demonstrate dramatic differences in how far a dollar stretches depending on geographic location. The Cost of Living Index uses a baseline of 100 representing the national average, with higher numbers indicating more expensive states and lower numbers indicating more affordable locations. States with indices above 150 require 50% more income to maintain the same standard of living as the national average, while those below 90 need 10% less.

Hawaii maintains its position as the most expensive state with a cost of living index exceeding 200, meaning residents require more than twice the national average income to afford basic necessities. Housing costs drive much of this premium, with average rents at $2,399 monthly and asking rents for vacant units reaching $2,850. Despite high incomes (median of $80,729 annually), many Hawaii residents struggle with affordability. California follows with indices ranging from 150-180 depending on the specific metropolitan area, with San Francisco and Los Angeles commanding the highest premiums. Massachusetts (145-165), New York (140-160), and Alaska (135-145) round out the five most expensive states, each driven by different factors—metropolitan concentration, high housing demand, and isolation/transportation costs respectively.

On the opposite end, Mississippi offers the lowest cost of living with an index of 84.0-86.0, though this comes with trade-offs including lower median incomes ($70,656 for a family of four), limited employment opportunities, and the nation’s highest poverty rate at nearly 20%. Kansas (86.5) provides the second-lowest cost of living, with particularly affordable housing at an index of 72.6 and average single-family home prices of $176,898. Alabama (87.0-89.0), Oklahoma (88.0-90.0), and Arkansas (89.0-91.0) complete the five most affordable states. These states share characteristics of lower population density, less competitive job markets, and housing supplies that better match demand. In general, Midwestern and Southern states dominate the affordable category, while Hawaii, Alaska, the Northeast, and West Coast command premium prices. The Missouri Economic Research and Information Center (MERIC) Q3 2025 data shows Missouri itself ranked as the sixth-lowest cost of living state at 89.0, with cities like Joplin posting an index of 84.0. These geographic variations mean that a household earning the national median income of $83,730 would experience vastly different standards of living depending on location, potentially enjoying comfortable circumstances in Mississippi while struggling to make ends meet in California.

Inflation and Price Trends Across Categories in the US 2025

Data Source: U.S. Bureau of Labor Statistics Consumer Price Index Summary (November 2025)

Inflation trends in the United States in 2025 show continued moderation from the elevated levels experienced in 2022-2023, though price pressures persist unevenly across spending categories. The overall Consumer Price Index rose 2.7% in the 12 months ending November 2025, down from 3.0% for the period ending September 2025. This represents a significant cooling from the 9.1% peak recorded in June 2022, bringing inflation closer to the Federal Reserve’s 2% target, though still exceeding it.

Core inflation, which excludes volatile food and energy prices, increased 2.6% over the past year, moving largely in tandem with headline inflation. This measure is closely watched by the Federal Reserve as a better indicator of underlying price pressures. The persistence of core inflation above 2% suggests that services-sector price increases continue to drive overall inflation, particularly in labor-intensive categories like healthcare, shelter, and personal services. Energy prices showed higher volatility with a 4.2% annual increase, though this masked significant monthly fluctuations. Gasoline prices, while up 1.0% year-over-year, experienced peaks and valleys throughout 2025, influenced by global oil markets, refinery capacity, and seasonal demand patterns.

Among major categories, shelter remained the dominant contributor to overall inflation despite moderating to 3.0% annual growth—its lowest level since October 2021. As shelter comprises approximately one-third of the CPI weight, even modest increases have outsized impact on headline inflation. Medical care costs rose 2.9%, consistently outpacing overall inflation and placing persistent pressure on household budgets. Food prices increased 2.6%, with notable divergence between food at home (+1.9%) and food away from home (+3.7%), reflecting higher labor costs in restaurants. Transportation showed relatively modest 1.6% inflation, though used vehicles specifically jumped 3.6%. Household furnishings and operations posted one of the highest increases at 4.6%, driven by furniture, appliances, and home maintenance services. Recreation grew 1.8%, while apparel prices actually declined, providing one of the few deflationary categories. Looking ahead, economists expect inflation to gradually approach the Federal Reserve’s 2% target through 2026, though risks remain including potential supply chain disruptions, geopolitical tensions affecting energy markets, and the lagged effects of wage increases feeding through to services prices. The Federal Reserve reduced interest rates in three consecutive meetings through late 2025, aiming to support labor markets while maintaining inflation control—a delicate balancing act that will shape cost of living trends into 2026.

Disclaimer: This research report is compiled from publicly available sources. While reasonable efforts have been made to ensure accuracy, no representation or warranty, express or implied, is given as to the completeness or reliability of the information. We accept no liability for any errors, omissions, losses, or damages of any kind arising from the use of this report.

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