A new cost-of-living index from the Missouri Economic Research and Information Center (MERIC) reveals significant disparities in living expenses across U.S. states, with housing emerging as the primary factor influencing affordability. The composite index, which measures six categories of household spending and uses a score of 100 as the national average, shows that states above this benchmark are more expensive, while those below are more affordable [1].
Hawaii leads the nation with the highest cost of living, propelled by a housing index exceeding 300, far surpassing every other state. This is attributed to Hawaii's geographic isolation, which increases prices for building materials and consumer goods [1]. Massachusetts ranks second, also driven by high housing costs and above-average prices in several spending categories. Alaska, California, and New York round out the top five most expensive states [1].
Conversely, Oklahoma is identified as the most affordable state, followed by Alabama, Mississippi, Kansas, and West Virginia. These states benefit from substantially lower housing costs and generally lower expenses in transportation, utilities, and other everyday categories, keeping their overall living costs well below the national average [1]. The South dominates the list of most affordable states, with Kansas as a notable exception from the Midwest [1].
The report notes that states prioritizing homebuilding and reducing regulatory barriers are generally better positioned to expand housing supply and improve affordability. Additionally, the state-by-state rankings align with broader migration trends, as IRS data indicate that many of the highest-cost states, such as New York and California, have experienced population shifts in recent years [1].
The issue of cost of living remains central to the upcoming 2026 midterm elections, with inflation, housing costs, and the broader economy expected to be top concerns for voters [1].
CONCLUSION
The latest MERIC data underscores the significant impact of housing costs on state-by-state affordability, with Hawaii and Massachusetts leading in expense and Oklahoma and Alabama offering the lowest costs. These disparities are influencing migration trends and are expected to remain a key issue in the political and economic landscape ahead of the 2026 midterm elections.