Cost of Living in Anchorage, AK

An Overview of Cost of Living in Anchorage, AK

Getting a feel for the cost of living in Anchorage is essential for anyone planning to relocate, as it empowers them to make informed financial decisions, secure a comfortable lifestyle and maintain financial stability in their new environment. The cost of living in Anchorage is 131, which is 31% higher than the national average. Relocating individuals may need to adjust their savings and investment strategies based on the cost of living in the new location. It influences decisions about retirement planning, investments and financial goals.

If affordability is among your top priorities when searching for a new place to live, this area may not be the ideal fit, as the cost of living in Anchorage is among the most expensive in the United States. Just a minority of areas exhibit a cost of living at least 20% higher than the national average, and unfortunately, Anchorage falls into this category, which may not align with your goal of finding a budget-friendly living environment.

When it comes to the cost of living in Anchorage, housing costs are a real heavyweight, often hogging a significant chunk of your earnings. Sadly, in this area, housing expenses for both buying and renting were 62.7% more expensive compared to your average city. That means you'll be shelling out more for homes, rents, mortgage rates and insurance.

Recurring goods and services expenses like haircuts, toothpaste, gym memberships and movie nights are a big part of your spending and make up 33% of the cost of living index. In Anchorage, these items will cost you 16.8% more than what most folks pay, making it a bit more expensive to live here.

Groceries are getting more expensive by the day and the cost of groceries makes up 13% of the overall cost of living index. In the past two years, prices have shot up by over 10%! Unfortunately, in Anchorage, it's the same story – grocery costs are 23.8% higher than what people pay across the country.

What Do Locals Say About the Cost of Living in Anchorage?

Nobody knows their city better than the people who actually live there. So, we asked 15 local residents how they would rate the cost of living in Anchorage and this is how they responded. 27% of people said that the cost of living was affordable, with prices decreasing, while 73% of people said that the cost of living was very expensive and prices continue to rise.

Is Anchorage Affordable?

Is Anchorage an affordable place to live? It's a good question and one that you might want to ask when considering any new city, as affordability can play a huge role in the decision making process. The cost of living index (which we covered above), as well as housing costs and income levels play a vital role in determining the affordability of an area. The median home price in Anchorage is 73.3% higher than the national average, while the average monthly rent prices are 38% higher than average. The affordability of any location can also be influenced by median income levels. Anchorage has a median household income of $84,813, which is 53.3% higher than the national average.

What Factors can Influence the Cost of Living in Anchorage?

Healthcare: The costs associated with healthcare and insurance premiums can exhibit notable disparities based on the city or state of residence. Access to healthcare facilities, out-of-pocket expenses for medical appointments, dental care charges, prescription medication costs and specialized medical care expenses all contribute to variations in the cost of living. In Anchorage, healthcare costs are 39.8% higher than the national average.

Subsidies: Certain regions may provide government subsidies or assistance initiatives designed to alleviate the cost of living burden on their residents. These programs encompass a wide range of support mechanisms, such as Medicare, Medicaid, housing subsidies, low-income home energy assistance programs, school lunch programs, supplemental nutrition assistance programs, student loans, electric vehicle tax credits, affordable care act subsidies and farming subsidies. Areas with fewer subsidy offerings might experience an elevation in their cost of living.

Urbanization: Larger, urban hubs brimming with ample amenities and robust employment opportunities often showcase a heightened cost of living. This surge is primarily attributed to the amplified demand for services and increased residential migration, culminating in elevated home prices and elevated rental rates. Conversely, less densely populated rural locales or regions characterized by reduced demand tend to offer a more limited array of amenities and undergo slower job market growth, ultimately yielding a more affordable cost of living.

Where is the Data From?

The Anchorage cost of living data displayed above is derived from the C2ER cost of living index to provide a useful and reasonably accurate measure of living cost differences in urban areas. The index takes into account data from 300 independent researches, covering more than 60 goods and services across 6 different categories, to create an overall index for each area, with 100 being the average. The C2ER index does not include sales or income tax rates in their data, however AreaVibes does include both income and sales tax rates in the overall cost of living score for each area.