Cost of Living in Indianapolis, IN

An Overview of Cost of Living in Indianapolis, IN

Knowing the cost of living in Indianapolis allows individuals to create a realistic budget. This helps them understand how their income will cover expenses and whether they need to make financial adjustments. The cost of living in any region can fluctuate due to various factors. To assess the cost of living consistently across different areas, a national average of 100 serves as the basis for the cost of living index. The cost of living in Indianapolis stands at 93, marking it 7% lower than the national average.

The cost of living in Indianapolis 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 Indianapolis can anticipate that their daily expenses will remain reasonably in line with those of an average city, contributing to a manageable cost of living.

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

Nobody knows their city better than the people who actually live there. So, we asked 27 local residents how they would rate the cost of living in Indianapolis and this is how they responded. 63% of people said that the cost of living was affordable, with prices decreasing, while 37% of people said that the cost of living was very expensive and prices continue to rise.

Is Indianapolis Affordable?

Is Indianapolis 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 Indianapolis, for instance, where the median home price falls 21.4% lower than the national average, and monthly rent rates are 4% lower than usual. Additionally, median income levels contribute to the equation, with Indianapolis flaunting a median household income of $50,813, 8.2% lower than the national norm.

What Factors can Influence the Cost of Living in Indianapolis?

Taxes: Locations with elevated tax rates, encompassing both sales and income taxes, can be a factor in driving up the cost of living. When you're paying more in taxes for everyday goods and services, it naturally translates into higher expenses. Similarly, a higher income tax rate can also contribute to an overall higher cost of living. In Indianapolis, the standard sales tax rate starts at 7%, and the income tax rates commence at 3.23%.

Urbanization: Urban areas with extensive amenities and job opportunities tend to have a higher cost of living due to increased demand for services and relocation, resulting in higher home prices and higher rents. Less densely populated rural areas, or areas with less demand tend to have fewer amenities and slower job growth, which results in a lower cost of living.

Groceries: Grocery costs have continued to increase significantly over the last 2-3 years. In some markets the cost of food has gone up by more than 20% in that period. While other markets have managed to see only a moderate uptick. These food costs can have a major impact on the cost of living in any area. In Indianapolis, the groceries index is 0.1% higher than the national average.

Where is the Data From?

The cost of living in Indianapolis, presented above is derived from the C2ER cost of living index, offering a practical method for assessing living cost disparities in urban areas. Published quarterly, this index compiles data from more than 300 independent researchers, encompassing over 60 goods and services in 6 categories. The weightings assigned to cost variances are informed by government survey data tracking the expenditure patterns of professional and executive households. It should be noted that the C2ER index does not include data on sales or income tax rates, however, AreaVibes incorporates tax rates into the overall cost of living score for each area.