Cost of Living

PUBLISHED AUGUST 2025

In the sports-fan’s world, rarely heard is the chant “We’re Number 4! We’re Number 4!”

But in the world of business operations and finances, that’s a pretty good place to be as a state. And Missouri has claim to that position: Only three other states—and by little more than a razor’s edge, at that—can claim to have lower overall costs of living than does the Show-Me State.

For business owners and managers, call it the Missouri Value Proposition: Wage structures that can create a competitive advantage over your competitors from coastal America.

Start with housing. The average price of a home in Missouri just as the pandemic was asserting itself in 2020 was $200,400. As of mid-2025, that had surged to $290,700—up 45.26 percent. Compare that to the $309,701 average nationwide (54.55 percent above the Missouri price), and this year’s $447,435, which is 53.92 percent higher than the state’s figure. 

In other words, the affordability gap for Missouri remained nearly untouched, closing ever-so-slightly after a nearly five-year inflationary spike. If you have employees trying to keep up on mortgage payments, here’s how that gap benefits you: On a standard 30-year loan, the owner of an average home in the U.S. is paying $2,700—even after 20 percent down!—while the same homeowner in Missouri shells out $1,778, a dividend of nearly $1,000 a month for settling here.

Welcome, then, to Missouri. It’s a place where one can live a comfortable lifestyle, even in a lower income-tax bracket. Using 100 as a national average across six metrics, the indices place relative costs in Missouri at 88.0. In other words, for every $100 expended by residents nationwide, Missourians pay $88, saving a cool 12 percent compared to the rest of the nation.

That starts to look mighty attractive compared to places like Hawaii, the most expensive state, and with an index of 182.3, more than twice the cost of life in Missouri. Or for somewhere less exotic, look at the nation’s capital, where the cost of living is more than half again the national average, with a score of 135.2. 

Powering that performance is housing, a category where Missouri is sixth, with a reading of 74.8, based on that same 100 as a national average. And in the past three years alone, Missouri has jumped up the charts from No. 12 in that metric.

What’s that look like compared to other states? Well, consider Massachusetts, the most expensive housing market in the lower 48 states, edging out even California. Redfin.com places the median home value in that market at $570,000, more than twice the Missouri price tag.

Housing, though, isn’t the only factor creating that low-cost edge. Missouri also enjoys Top 10 rankings in four other cost-of-living metrics: a No. 2 in lowest transportation costs, No. 3 for miscellaneous-item costs, No. 7 for grocery costs and No. 9 for health costs. Only in utility costs is the state outside the Top 10 (specifically, No. 29), and even then, it’s still below the national average by 7.5 points.

Grocery costs are held in check by virtue of living where a lot of the nation’s protein chain originates—cattle ranching, meat-packing, pork processing, poultry farms, and processors—all have major operations in Missouri. Fresh avocados for your toast? Not so much, but with the savings on dietary pillars, there’s plenty left over to splurge.

Transportation costs overall are comparatively low because people here tend to live near their work. It’s a measure of how spoiled Missourians are that, in the urban centers, a 20-minute commute in these parts and the gallon of gas consumed are considered impositions. But compare that to day-killing and pricey commuter rail options in the east and the often-insufferable highway conditions in the west. 

All of this makes a difference in various ways. For businesses, it means the ability to acquire high-level talent at a significant discount. That’s a serious competitive advantage right there, especially for law or accounting firms that also have coastal-market operations. For workers, it means enjoying a higher standard of living within a lower tax bracket, compounding the savings from a low-cost environment.