Cost of Living in Ann Arbor, Michigan

Ann Arbor is a city in Washtenaw County, Michigan, with a population of 120,641. The total cost of housing, food, child care, transportation, health care, taxes, and other necessities for a single adult in Ann Arbor is $39,505 a year — greater than the annual cost of living for Michigan of $32,897 and greater than the national figure of $38,433.

Using cost of living data from the nonprofift think tank Economic Policy Institute, 24/7 Wall St. estimated the cost of living in Ann Arbor and over 29,000 other cities and towns in the US.

Housing Costs in Ann Arbor, Michigan

Housing is one of the largest components of cost of living. In Ann Arbor, the median home value is $298,400, greater than the national median home value of $204,900. The median price of a home built in 1939 or earlier is $380,500, while the median value of a home built in 2014 or later is $525,000.

Renting is a sometimes lower cost alternative to homeownership. In Ann Arbor, some 55.20% of occupied homes are rented, greater than the 36.2% national renter rate. The typical renter in Ann Arbor spends $1,213 a month on housing, greater than the $1,023 national median monthly rent.

In addition to home value, one of the largest determinants of housing affordability is area income. While nationwide the price of a typical U.S. home is 3.4 times the $60,293 U.S. median household income, housing affordability ratios range from approximately 1.0 in the least expensive cities to more than 10.0 in the country's most expensive markets. In Ann Arbor, the median household income is $63,956, 4.7 times the median home value.

Transportation Costs in Ann Arbor, Michigan

Transportation can also be a significant component of cost of living. In Ann Arbor, 59.90% of commuters drive to work, compared to 85.5% of commuters nationwide. An estimated 30.90% of workers commute to jobs outside of Ann Arbor, a smaller share than the 43.7% share of commuters nationwide who live and work in different cities. The average commute in Ann Arbor is 20.1 minutes long, compared to the 26.6-minute average commute nationwide. Taking into account the cost of gas, as well as public transit and car maintenance, the EPI estimates that a single person in Ann Arbor spends $9,872 a year on transportation, about the same as the national average of $9,760.

Health Care Costs in Ann Arbor, Michigan

Out-of-pocket health care costs and insurance premiums — assuming at least a basic level of health insurance coverage — are far lower than they are on average nationwide in Ann Arbor but in line with what they are across Michigan as a whole.

For a single adult living in the area, average health care costs come out to $3,538 per year, compared to an average of $3,455 across Michigan and $4,266 nationwide.

Child care Costs in Ann Arbor, Michigan

For families with children, child care adds thousands of dollars to overall annual spending. In Ann Arbor, the average annual cost of child care for two children — one 4 year old and one 8 year old — is $19,299, about $3,100 more than the comparable average of $16,173 across all of Michigan. Meanwhile, across the U.S. as a whole, childcare expenses for two children averages $15,853 per year.

Food Costs in Ann Arbor, Michigan

Food is another every day expense that has a significant impact on overall cost of living. Data from the U.S. Department of Agriculture shows that the cost of food varies from city to city and town to town.

In Ann Arbor, a single adult spends an average of $3,301 on food annually, and a family of four spends $9,532 on average. For context, average annual food expenditure across Michigan and the U.S., respectively, are $3,026 and $3,240 for a single adult, and $8,740 and $9,354 for a family of four. These estimates are calculated for a nutritionally adequate diet of food purchased at a grocery store for at-home preparation.

Taxes in Ann Arbor, Michigan

Few expenses vary as much from city to city and town to town as taxes. Accounting for state and federal income taxes, as well as Social Security contributions and Medicare payroll taxes, the average adult working in Ann Arbor, Michigan pays $6,727 annually — a relatively high sum compared to the the statewide average of $5,482.

It is important to note that these calculations do not include other common taxes such as property, sales, and excise taxes. Accounting for these taxes, while excluding taxes levied at the federal level, Ann Arbor residents live in a state with a modest average tax burden. Per capita state tax collections in Michigan total $3,052 per year, compared to the $3,151 average across all states.

Methodology

To estimate the cost of housing, food, transportation, health care, child care, taxes, and other necessities, 24/7 Wall St. assigned county-level Economic Policy Institute data to cities, towns, villages and Census-designated places based on boundary definitions from the U.S. Census Bureau. For places that span multiple counties, data was aggregated based on the percentage of boundary overlap.

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