How Do Big Cities Compare in Cost To The U.S. Average?

According to U.S. Postal Service change of address data as aggregated by Mymove.com Americans have been moving in record numbers since the start of the COVID pandemic.  As they state:

Looking at the number of movers who filed for mail forwarding from February to July 2020, requests are up 3.92% from the same time the previous year. There have been more than 15.9 million requests in 2020. In comparison, there were just over 15.3 million requests during the same period in 2019. 

The Brookings Institute however claims those data are only pandemic related and that Americans are moving at historically low rates.  They say:

Between March 2020 and March 2021, a smaller share of Americans (8.4%) changed residence than in any year since 1947, when the Census Bureau first started collecting annual migration statistics. These statistics do not negate the reporting of pandemic-related permanent or temporary movement for specific areas as suggested by real estate, moving, and survey data. However, during the pandemic, mobility declined enough among broad segments of the population—related to factors such as postponements of births and marriages as well as declining job opportunities – to lead to this historic migration low. 

No matter which is more true, people are still moving.  And being that the vast majority of Americans choose to live in urban areas, I looked for cost of living data for big cities.  Let’s take a look.

Urban Cost Of Living

One day I stumbled upon this great graphic from Charles Schwab showing the average cost of living of the largest city/metro area in each state as compared to the national average. 

I like it that they chose the biggest city from each state to give variety and that they grouped many urban areas similar to Census Bureau Metropolitan Statistical Area groupings.  For instance Philadelphia is grouped with Wilmington and Camden because it’s basically one large metro area.

But it really bugs me when I see valuable geographically focused data presented in a non-geographic manner.  When I see it I feel the need to fix it. 

So I did.

Gettin’ Mappy

It’s funny how as I inch closer toward fully retiring I somehow get more excited to make a map, even though I spent decent portions of my career doing exactly that.  But moving on…

I chose to make a graduated circle map of the Schwab graphic.  Cities in green have a lower cost of living than the U.S. average and those in red are higher.  And the size of the city dot is proportional to how much lower or higher the cost of living is.

(Click map for a larger version)

So for us frugal types who seek low cost of living cities, green cities located in green states with a bigger green dot are the best.  Red cities in red states with large red dots are the worst.  Cities with very small dots have a cost of living very close to the U.S. average, with their respective color showing whether it’s slightly higher or lower.

Creating this map was a significant labeling challenge, and sometimes I feel like I should have better things to do with my life but I’m a map nerd, haha.

Some Observations

We all know how important geography is which is why I feel this is a good companion to the Schwab chart.  For instance some big cities that are on opposite sides of the green-red divide are pretty close to each other.  Milwaukee and Chicago are a good example, as are Washington D.C. and Norfolk-Virginia Beach-Newport News. 

And guess what, I recently wrote about my friend Melissa who gave up her highly paid K-Street lawyer job to move to Norfolk Virginia.  She’s now only working 40 hours a week and living in an area with a much lower cost of living than D.C.  That’s called Geoarbitrage.

I was genuinely surprised by some cities to be honest.  I didn’t think Atlanta would be green and Burlington Vermont would be red.  I’ve been to both but many years ago.  I also thought Albuquerque New Mexico would be cheaper than just 5.71% below the U.S. average. 

It’s also an interesting coincidence that the most expensive large metro area, the San Francisco-Oakland area, has a cost of living 17.37% above the U.S. average, while the cheapest, Florence-Muscle Shoals Alabama, has a cost of living 17.58% below the U.S. average.  By my math that makes about a 35% difference between the two!

Geoarbitrage

So there you have it financial warriors, a great map showing the cost of living in big cities and how it compares to the U.S. average.

I do lots of posts like this that show various aspects of money and finance from a location perspective.  So you’re considering Geoarbitrage in the United States be sure to check out my Geoarbitrage Resources Page which has tons of great tools to help you find your perfect location.

I hope you find these resources handy and I will continue to expose valuable tools that can help when deciding on a geoarbitrage strategy.