What State Has the Worst Cost of Living? Real Numbers on Housing, Food, and Bills

When people ask, what state has the worst cost of living?, they’re not just curious about rent prices. They’re wondering if they can feed their family, pay for gas, and still save a little without working two jobs. The answer isn’t a myth or a headline-it’s a real, crushing reality for millions, and it’s centered in one state above all others: California.

Why California Leads the Worst Cost of Living

California isn’t just expensive-it’s a different economic planet. The median home price in 2025 is $890,000, more than double the national average. Even a modest 800-square-foot apartment in a mid-tier city like Fresno costs $2,100 a month. In San Francisco or Los Angeles, you’re looking at $3,500 or more for a one-bedroom. That’s before utilities, internet, or parking.

Wages haven’t kept up. The state minimum wage is $16 an hour, but after taxes and deductions, a full-time worker earning that takes home $2,560 a month. Rent alone eats up 82% of that income. The federal guideline says housing should cost no more than 30% of income. In California, it’s over 2.5 times that.

Food isn’t cheaper. A gallon of milk costs $5.40. A dozen eggs? $5.90. A basic grocery cart for a family of four runs $180 a week-$720 a month. That’s more than most people in other states pay for rent. And don’t forget gas. California’s average price for regular unleaded is $5.12 a gallon, nearly $1.50 higher than the national average.

The Hidden Costs No One Talks About

Most cost-of-living rankings focus on rent and groceries. But the real pain comes from the invisible taxes and fees.

California has the highest state income tax rate in the country-13.3% on earnings over $625,000. Even middle-income earners pay 9.3% on the highest bracket. That’s $3,000 extra per year for someone making $75,000. Then there’s the vehicle registration fee-up to $1,200 a year for newer cars. And don’t get started on property taxes. Even with Proposition 13, when you buy a home, you’re stuck with a massive reassessment that can double your tax bill overnight.

Healthcare is worse. A single doctor visit without insurance averages $220. A dental cleaning? $150. A prescription for insulin? $100 or more, even with coupons. Mental health care is even harder to find-wait times for state-funded therapists can be 6 to 8 months.

How Other States Compare

Some states are expensive, but none match California’s combination of high prices and low wage growth.

Hawaii comes in second. Housing is almost as bad, with median home prices near $950,000. But food and gas are even more expensive because everything is shipped in. Still, Hawaii’s median income is $86,000-higher than California’s $81,000. That helps a little.

New York has sky-high rents in NYC, but outside Manhattan, upstate areas like Albany or Syracuse offer decent housing for under $1,800 a month. Median income is $78,000. It’s expensive, but you can find breathing room.

Washington has Seattle’s high prices, but the rest of the state is manageable. Oregon’s Portland is pricey, but rural areas are affordable. Neither state has California’s income tax burden or its extreme housing shortage.

Texas, Florida, and Tennessee have no state income tax. Median home prices hover around $350,000. A family can live comfortably on $60,000 a year. That’s the difference between survival and stability.

Who Gets Crushed the Most

It’s not just low-income workers. It’s teachers, nurses, firefighters, and retail employees. A nurse in Los Angeles makes $85,000 a year. After taxes, rent, childcare, and car payments, they’re left with $800 a month. That’s not enough to cover a single unexpected expense-like a broken water heater or a child’s emergency dental visit.

Retirees on fixed incomes are being pushed out. Seniors who bought homes in the 1980s for $100,000 now see their property taxes jump because their children inherited the house. Many are forced to sell and move into tiny apartments or leave the state entirely.

Young people are leaving. Between 2020 and 2024, California lost over 1.2 million residents to other states. Most were under 35. They’re not moving for jobs-they’re moving because they can’t afford to stay.

What’s Being Done? Not Much

California has passed dozens of housing bills in the last decade. Some require cities to approve more apartments. Others give tax breaks to developers. But the results? Barely noticeable.

From 2015 to 2025, California added 1.8 million housing units. Sounds good, right? But the population grew by 2.3 million. That’s a deficit of 500,000 homes. The state needs 3.5 million more homes just to get back to 1980s affordability levels.

Local governments block new housing with zoning laws, noise complaints, and endless permit delays. A simple 12-unit apartment complex in San Diego took 7 years to get approved. That’s not bureaucracy-it’s resistance.

Meanwhile, the state spends billions on homelessness services, but doesn’t fix the root problem: not enough places to live.

What Can You Do If You Live There?

If you’re stuck in California, here’s what actually works:

• Live farther from the city. In the Central Valley, rents are 40% lower than in the Bay Area. Commute times are longer, but your wallet will thank you.
• Get roommates. Sharing a 3-bedroom house with three others cuts rent in half.
• Use food banks and SNAP. One in five Californians uses food assistance. There’s no shame in it-this system exists because the economy doesn’t work for everyone.
• Work remotely for a company in a lower-cost state. Many tech jobs pay the same regardless of location. You can earn a Bay Area salary while living in Nevada or Arizona.
• Consider moving. If you’re single and under 30, your future self will thank you for relocating to Colorado, Georgia, or even Missouri.

It’s Not About Politics-It’s About Math

Some say California’s high cost is because of progressive policies. Others blame greedy landlords. The truth? It’s supply and demand. For decades, the state didn’t build enough homes. Demand kept rising. Prices exploded. Now, even people earning six figures can’t afford to live where they work.

There’s no magic fix. No tax credit, no rent control, no new law will suddenly make housing affordable. The only solution is building-fast, at scale, and without endless delays.

Until then, California remains the state with the worst cost of living-not because it’s the most beautiful, or the most innovative, but because it’s the most unaffordable.