Living in California is more expensive than it is on average across the U.S. as a whole. According to data from the Bureau of Economic Analysis, goods and services in the state cost 15.4% more than they do on average nationwide. Compared with all other states, California has the third highest overall cost of living.
In general, living in dense, urban metro areas is more expensive than living in more rural areas. California is home to 26 metropolitan areas. The most expensive in the state is the San Francisco-Oakland-Hayward metro area, where the cost of goods and services is 31.6% higher than the national average and 16.2% higher than the statewide average.
California Housing Costs
Housing is one of the largest components of cost of living. In California, the typical home is worth $475,900, $271,000 more than the national median home value of $204,900. Across the state, the median price of a home built in 1939 or earlier is $648,500, while the median value of a home built in 2014 or later is $581,600.
The typical renter in California spends $1,429 a month on housing, $406 more than the $1,023 national median monthly rent. Monthly rent for a one-bedroom in the state is $1,195, while the typical rent for a unit with five or more bedrooms is $2,226.
Across the state, 45.4% of occupied homes are rented, more than the 36.2% national average and the second highest renter rate of any state.
California Transportation Costs
Transportation can also be a significant component of cost of living. In California, 84.0% of commuters drive to work, compared to 85.5% of commuters nationwide. On average, the typical motorist in the state drives 8,728 miles a year. Taking into account average fuel economy and the average cost of gas -- regular fuel cost an average of $3.24 a gallon in California in mid-2020 -- the average motorist in the state can expect to spend $1,168 on gas alone in one year.
Other transportation costs, like car insurance premiums, can vary by state. In California, the average car insurance premium is $2,389, far more than the $1,517 national average, according to data from Insure.com. And according to data from the EPI, the average single adult in the state spends $10,267 a year on transportation.
California Health Care Costs
Out-of-pocket costs and insurance premiums for health care -- assuming at least a basic level of health insurance coverage -- are relatively low in California. Average health care costs for a single adult in the state total $3,711 per year, compared to the national average of $4,266. For a family of four, average annual health care costs total $11,253 -- $1,697 less than the comparable national average of $12,950.
California Food Costs
Food is another every day expense that has a significant impact on the overall cost of living in an area. Data from the U.S. Department of Agriculture shows that the cost of food varies from state to state.
In California, a single adult spends an average of $3,468 on food annually, and a family of four spends $10,016 on average. For context, the nationwide average annual food expenditure is $3,240 for a single adult 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.
California Child Care Costs
For families, child care adds thousands of dollars to overall annual spending. The average annual cost of child care for a 4 year old child in California is $9,663, in line with the national average of $8,903. However, it costs an average of $14,822 to care for a 4 year old child and an 8 year old child per year in California compared to the national average of $15,853.
California Taxes
Few expenses vary as much from state to state as taxes. Accounting for state and federal income taxes, as well as Social Security contributions and Medicare payroll, the average adult working in California pays $8,248 annually in taxes -- above the national average of $6,542.
Excluding federal taxes and incorporating state and local taxes such as property and sales taxes -- the state and local tax burden in California is greater than the average across the U.S. as a whole. Per capita state tax collections in California come out to $4,424 per year, compared to the $3,151 average across all states.
Cost of Living by County or County Equivalent
Just as cost of living varies from state to state, it also varies from place to place within states. In California, San Mateo County, home to the city of Daly City, has the highest overall cost of living for a family of four at $156,292 per year, well above the statewide average of $96,515 per year.
Meanwhile, Merced County is the least expensive place in California. The average annual cost of living for a family of four in the area is just $70,675, $25,840 less than it is across the state as a whole. Merced is the most populous community in Merced County.
Note that monetary figures are rounded to the nearest dollar and calculated differences may not always add up perfectly to the nearest dollar.
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