B
2%
Overall NAT. AVG.
2%
Goods & Services NAT. AVG.
12%
Housing NAT. AVG.
Search Homes for Sale
Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.
The cost of living index is based on a national average of 100. For example, if the cost of living is 90, then it is 10% lower than average. If the cost of living is 110, then it is 10% higher than average. The breakdown for each index is as follows: goods & services (33%), groceries (13%), health care (5%), housing (30%), transportation (9%) and utilities (10%). If the cost of living data was unavailable for this city, estimates based upon nearby cities were used.
Index Pelham Alabama National
Cost of living10288100
Goods & Services9896100
Groceries9796100
Health care9487100
Housing11272100
Transportation9191100
Utilities108102100

An Overview of Cost of Living in Pelham, AL

Understanding the cost of living in Pelham can help future residents assess whether their current financial situation aligns with the expenses they will encounter. It enables them to plan for potential changes in their budget and lifestyle. The Pelham cost of living index is 102, which is 2% higher than the national average. The cost of living index is calculated by taking into account multiple categories, which encompass both the cost of everyday expenditures and larger expenses as well.

The cost of living in Pelham closely mirrors the national average in comparison to other cities nationwide. Essential items such as groceries, goods and services, health care and utilities are priced at a level consistent with similar urban areas. This means that residents of Pelham can anticipate that their daily expenses will remain reasonably in line with those of an average city, contributing to a manageable cost of living.

Is Pelham Affordable?

Is Pelham affordable? It's a key consideration when pondering a move, as affordability often shapes your choices. The cost of living index (we discussed it earlier), coupled with housing costs and income levels, serves as the cornerstone for determining a location's affordability. Take Pelham, for instance, where the median home price falls 7.5% higher than the national average, and monthly rent rates are 22.1% higher than usual. Additionally, median income levels contribute to the equation, with Pelham flaunting a median household income of $79,268, 43.3% higher than the national norm.

What Factors can Influence the Cost of Living in Pelham?

Subsidies: Some cities and states may extend government subsidies or aid programs aimed at reducing the cost of living for their residents. These initiatives encompass diverse forms of support, including 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 farm subsidies. Regions with limited subsidy provisions may witness an increase in their overall cost of living.

Taxes: Regions that impose higher taxes, including sales and income taxes, can contribute to an increased cost of living. Higher taxes for everyday necessities such as clothing, utilities and food inevitably leads to higher expenditures. Additionally, a higher income tax rate can also play a role in elevating the overall cost of living. In Pelham, the prevailing sales tax rate starts at 4%, and income tax rates kick off at 2%.

Utilities: Similar to the prices of any goods or services, utility expenses can fluctuate widely, contingent on variables such as climate, available energy sources, geographical location and state regulations. Costs associated with electricity, water, heating, and waste disposal can differ in magnitude, depending on the specific city or state. In Pelham, the utilities index registers at 7.5% higher than the national average.

Where is the Data From?

The cost of living data in Pelham displayed above is sourced from the C2ER cost of living index, which serves as a practical tool for comparing living expenses across urban areas. Published on a quarterly basis, this index aggregates data from over 300 independent researchers, encompassing more than 60 goods and services, in 6 different categories. The weightings assigned to cost differences rely on government survey data that tracks the spending habits of professional and executive households. It's worth noting that the C2ER index excludes data on sales or income tax rates, while AreaVibes integrates tax rates into the overall cost of living evaluation for each region.

New Real Estate Listings in Pelham Area
Search Homes for Sale in Pelham, AL

Cost Of Living Quick Facts

  • The cost of living in Pelham is 15% higher than the Alabama average
  • The cost of living in Pelham is 2% higher than the national average
  • Pelham housing is 12% higher than the national average
  • Alabama general sales tax is 22% lower than the national average
  • Alabama state income tax is 23% lower than the national average

Most Affordable Places to Live in and Around Pelham

See all the best places to live around Pelham

Compare Pelham, AL Cost of Living

      vs
      How would you rate the cost of living in Pelham?
      Write a review to give others more information about this area.
      Is the cost of living increasing or decreasing in Pelham?
      Write a review to give others more information about this area.
      See all Pelham poll results

      Salary Calculator

      This is how much you would need to earn in
      Price difference in compared to
      Cost of living index
      Goods & Services index
      Groceries index
      Health care index
      Housing index
      Transportation index
      Utilities index

      Median Income & Debt-To-Income Ratio

      Median Income Per Year Per Month Max Budget (28% DTI) Max Budget (36% DTI)
      Owners$83,541$6,962$1,949$2,506
      Renters$62,521$5,210$1,459$1,876
      The affordability of the housing market in Pelham, AL as well as the overall cost of living can be predicted by what percent of the monthly income is spent on housing related costs. This is konwn as the debt-to-income ratio (DTI). The overall rule of thumb is that no more than 28% of your gross income should be spent on the overall costs related to housing and no more than 36% of gross income on all expenses and debts. Among Pelham homeowners, the median income is $83,541. This indicates that a monthly maximum of $1,949 should be spent by homeowners on all housing related costs. Renters have a median income of $62,521. This indicates that renters would have a maximum of $1,459 for their rent related monthly costs.

      Alabama Sales Tax

      State General Sales Tax With Max Surtax
      Alabama 4% 13.5%

      Alabama Income Tax

      State Income Tax (Low) Income Tax (High)
      Alabama 2% 5%

      Goods & Services

      Item Pelham National avg. Difference
      Haircut $20.07$24.2617.3%
      Beauty Salon $45.74$45.560.4%
      Toothpaste $3.76$3.701.6%
      Shampoo $1.33$1.284.1%
      Movie $12.54$12.133.3%
      Bowling $16.37$18.009.1%

      Groceries

      Item Pelham National avg. Difference
      Ground Beef $6.01$5.843.0%
      Fried Chicken $1.66$1.575.5%
      Milk $4.54$4.672.9%
      Potatoes $5.23$4.936.0%
      Pizza $10.99$12.099.1%
      Beer $10.40$10.410.1%

      Health Care

      Item Pelham National avg. Difference
      Optometrist $92.33$125.6826.5%
      Doctor $101.83$135.7825.0%
      Dentist $125.78$113.2911.0%
      Ibuprofen $10.28$10.653.5%
      Lipitor $460.79$468.601.7%

      Housing

      Item Pelham National avg. Difference
      Home Price $198,500.00$184,700.007.5%
      Avg. Mortgage Payment $1,935.73$2,346.6917.5%
      Apartment Rent $1,159.00$949.0022.1%

      Transportation

      Item Pelham National avg. Difference
      Gasoline $3.13$3.469.7%
      Tire Balancing $54.52$59.929.0%

      Utilities

      Item Pelham National avg. Difference
      All Electricity $219.40$193.9913.1%
      Phone $188.55$192.251.9%
      Although the cost of living data is updated regularly, this cost of living information is to be used as estimates only as prices can change on an ongoing basis.

      Nearby cities with low cost of living

      City Population Cost of Living Index National Avg.
      Brantleyville, AL8107722.6%
      Brighton, AL2,8738317.4%
      Lipscomb, AL2,0558416.3%
      Shelby, AL9878416.3%
      Midfield, AL4,9848614.3%
      Pelham, AL23,7071022.0%

      Cities with similar population

      City Population Cost of Living Index National Avg.
      Edgewater, FL23,710981.9%
      Allendale, MI23,6961000.4%
      Monsey, NY23,73316666.1%
      North Platte, NE23,7348515.0%
      Windsor, CO23,67913231.5%
      Pelham, AL23,7071022.0%
      Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.