Alabama cost of living
Prices in Alabama run at 88.8 against a national average of 100, which makes it the 45th most expensive of the 51 jurisdictions. Housing is the part that separates states: rents there sit at 61.8.
Where the difference actually is
Prices in Alabama run at 88.8 where the national average is 100, so about 11.2 per cent below the country as a whole. It ranks #45 of 51 states.
Housing is unusually cheap relative to everything else here. Rents sit at 61.8 against goods at 96.4 and other services at 84.6, so the overall figure of 88.8 understates how affordable the housing itself is. That combination, ordinary prices with cheap rent, is what people are usually looking for and rarely find.
A salary here goes further than the same salary somewhere at 100. Divide by 88.8 and multiply by 100 to get the nationally comparable figure, and it will come out higher than the headline.
The vertical line is the national average of 100. Source: U.S. Bureau of Economic Analysis, Regional Price Parities, SARPP, 2024.
What it costs, in actual money
Parities are ratios. These are the figures behind them for Alabama, drawn from the other datasets on this site.
| Alabama | |
|---|---|
| Median home value | $195,100 |
| Median gross rent | $963 a month |
| Median household income | $62,027 |
| Average electricity bill | $185 a month |
| Effective property tax | 0.38% |
Metro areas in Alabama
Within a state, cities and rural areas diverge sharply. A statewide parity averages over that.
| Metro area | All items | Goods | Rents | Rank |
|---|---|---|---|---|
| Daphne-Fairhope-Foley | 94.7 | 96.4 | 89.2 | #172 |
| Huntsville | 93.1 | 96.4 | 77.9 | #207 |
| Birmingham | 91.6 | 96.4 | 71.9 | #254 |
| Montgomery | 89.7 | 96.4 | 64.3 | #295 |
| Columbus | 89.3 | 96.3 | 61.2 | #304 |
| Mobile | 88.1 | 96.4 | 60.1 | #333 |
| Auburn-Opelika | 87.9 | 96.4 | 62.1 | #338 |
| Tuscaloosa | 87.7 | 96.4 | 58.2 | #344 |
| Decatur | 87.2 | 96.4 | 58.1 | #350 |
| Anniston-Oxford | 85.9 | 96.4 | 54.7 | #366 |
| Gadsden | 85.7 | 96.4 | 53.7 | #374 |
| Florence-Muscle Shoals | 84.8 | 96.4 | 47.7 | #380 |
| Dothan | 83.8 | 96.4 | 46.9 | #385 |
Alabama cost of living: common questions
Is Alabama expensive to live in?
Prices overall are 11.2% below the national average, at a parity of 88.8 where 100 is the country as a whole. It ranks #45 of 51. Goods run at 96.4, rents at 61.8 and other services at 84.6.
What is a salary in Alabama really worth?
The median wage there is $43,830. Adjusted for local prices that buys what $49,358 buys nationally. A state that pays well and costs more can leave a household no better off, and this is the arithmetic that shows it.
What is a regional price parity?
An official measure from the Bureau of Economic Analysis of what a dollar buys in one place against the national average, set at 100. It is built from the same price collection that underlies the consumer price index, extended to compare places rather than time periods. It is the only government measure of cost of living differences between states.
Why is housing treated separately?
Because it carries most of the difference. In Alabama rents sit 27 points below the state's overall parity. Goods barely vary between states, since most of them are shipped nationally; services vary more; housing varies enormously. Any cost of living comparison that does not separate housing is mostly measuring housing anyway.