A+
12%
Overall NAT. AVG.
2%
Goods & Services NAT. AVG.
36%
Housing NAT. AVG.
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Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.
The cost of living index is based on a national average of 100. For example, if the cost of living is 90, then it is 10% lower than average. If the cost of living is 110, then it is 10% higher than average. The breakdown for each index is as follows: goods & services (33%), groceries (13%), health care (5%), housing (30%), transportation (9%) and utilities (10%). If the cost of living data was unavailable for this city, estimates based upon nearby cities were used.
Index Birmingham Alabama National
Cost of living8888100
Goods & Services9896100
Groceries9796100
Health care9487100
Housing6472100
Transportation9191100
Utilities108102100

An Overview of Cost of Living in Birmingham, AL

The cost of living in Birmingham affects the quality of life one can afford in this new location. It allows people to assess whether they can maintain their preferred lifestyle, including housing, leisure activities and dining options. Your total monthly expenditures can varry depending on the area, as well as many other factors. The cost of living in Birmingham is 88, which is 12% lower than the national average. Knowledge of the cost of living can help individuals make informed decisions about retirement savings, investments, and financial goals.

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

Nobody knows their city better than the people who actually live there. So, we asked 15 local residents how they would rate the cost of living in Birmingham and this is how they responded. 47% of people said that the cost of living was affordable, with prices decreasing, while 53% of people said that the cost of living was very expensive and prices continue to rise.

Is Birmingham Affordable?

Is Birmingham an affordable place to live? It's a good question and one that you might want to ask when considering any new city, as affordability can play a huge role in the decision making process. The cost of living index (which we covered above), as well as housing costs and income levels play a vital role in determining the affordability of an area. The median home price in Birmingham is 47.2% lower than the national average, while the average monthly rent prices are 8.3% lower than average. The affordability of any location can also be influenced by median income levels. Birmingham has a median household income of $38,832, which is 29.8% lower than the national average.

What Factors can Influence the Cost of Living in Birmingham?

Subsidies: Certain cities or states may institute government subsidies or assistance programs designed to alleviate the financial burdens associated with the cost of living for their residents. These programs encompass a variety of support mechanisms, including Medicare, Medicaid, housing subsidies, low-income home energy assistance programs, school lunch programs, supplemental nutrition assistance programs, student loans, electric vehicle tax credits, affordable care act subsidies and farm subsidies. Areas that provide fewer subsidies may see an uptick in their overall 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 Birmingham, the groceries index is 3.3% lower than the national average.

Housing: When everyone's vying for homes in popular areas, it drives up property prices and rents, making the overall cost of living surge. On the flip side, in less sought-after locales, where housing demand is low, prices tend to dip, resulting in a more economical cost of living. In Birmingham, the housing index comes in at 35.5% lower than the national average.

Where is the Data From?

The Birmingham cost of living data displayed above is derived from the C2ER cost of living index to provide a useful and reasonably accurate measure of living cost differences in urban areas. Published on a quarterly basis, it compiles data from more than 300 independent researchers, encompassing over 60 goods and services. These items have been meticulously selected to represent various consumer expenditure categories, in 6 categories. Weightings assigned to cost differentials draw from government survey data tracking spending patterns among professional and executive households. While the C2ER index excludes data on sales or income tax rates, AreaVibes incorporates tax rates into the overall cost of living score for each region.

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Cost Of Living Quick Facts

  • The cost of living in Birmingham is 1% lower than the Alabama average
  • The cost of living in Birmingham is 12% lower than the national average
  • Birmingham housing is 36% lower than the national average
  • Alabama general sales tax is 22% lower than the national average
  • Alabama state income tax is 23% lower than the national average

Most Affordable Places to Live in and Around Birmingham

See all the best places to live around Birmingham

Compare Birmingham, AL Cost of Living

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      Salary Calculator

      This is how much you would need to earn in
      Price difference in compared to
      Cost of living index
      Goods & Services index
      Groceries index
      Health care index
      Housing index
      Transportation index
      Utilities index

      Median Income & Debt-To-Income Ratio

      Median Income Per Year Per Month Max Budget (28% DTI) Max Budget (36% DTI)
      Owners$53,859$4,488$1,257$1,616
      Renters$30,352$2,529$708$911
      A good indicator of the general affordability of housing in Birmingham, AL, is the percentage of monthly income that should be spent on housing expenses, otherwise known as the debt-to-income ratio (DTI). Generally speaking, no more than 28 percent of your total gross income should be spent on your housing expenses and not more than 36 percent of your gross income on total expenses, including debts. In Birmingham, the median monthly income is $53,859 for those who own their own homes. Under the standard rule, that income level would allow for $1,257 to be budgeted for housing expenses each month, at the most. Renters, on the other hand, earn about $30,352, per the median income in the area. That would allow for renters to spend up to $708 on monthly rental expenses.

      Alabama Sales Tax

      State General Sales Tax With Max Surtax
      Alabama 4% 13.5%

      Alabama Income Tax

      State Income Tax (Low) Income Tax (High)
      Alabama 2% 5%

      Goods & Services

      Item Birmingham National avg. Difference
      Haircut $20.07$24.2617.3%
      Beauty Salon $45.74$45.560.4%
      Toothpaste $3.76$3.701.6%
      Shampoo $1.33$1.284.1%
      Movie $12.54$12.133.3%
      Bowling $16.37$18.009.1%

      Groceries

      Item Birmingham National avg. Difference
      Ground Beef $6.01$5.843.0%
      Fried Chicken $1.66$1.575.5%
      Milk $4.54$4.672.9%
      Potatoes $5.23$4.936.0%
      Pizza $10.99$12.099.1%
      Beer $10.40$10.410.1%

      Health Care

      Item Birmingham National avg. Difference
      Optometrist $92.33$125.6826.5%
      Doctor $101.83$135.7825.0%
      Dentist $125.78$113.2911.0%
      Ibuprofen $10.28$10.653.5%
      Lipitor $460.79$468.601.7%

      Housing

      Item Birmingham National avg. Difference
      Home Price $97,500.00$184,700.0047.2%
      Avg. Mortgage Payment $1,935.73$2,346.6917.5%
      Apartment Rent $870.00$949.008.3%

      Transportation

      Item Birmingham National avg. Difference
      Gasoline $3.13$3.469.7%
      Tire Balancing $54.52$59.929.0%

      Utilities

      Item Birmingham National avg. Difference
      All Electricity $219.40$193.9913.1%
      Phone $188.55$192.251.9%
      Although the cost of living data is updated regularly, this cost of living information is to be used as estimates only as prices can change on an ongoing basis.

      Nearby cities with low cost of living

      City Population Cost of Living Index National Avg.
      Cardiff, AL467723.5%
      Mount Olive CDP (Coosa County), AL2757920.7%
      Edgewater, AL8328218.1%
      Brighton, AL2,8738317.4%
      Mulga, AL7578316.9%
      Birmingham, AL210,9288812.3%

      Cities with similar population

      City Population Cost of Living Index National Avg.
      Fayetteville, NC211,201936.6%
      Oakville, ON212,353n/a 
      Santa Clarita, CA212,51916464.1%
      Fontana, CA212,70413535.1%
      Moreno Valley, CA208,75113130.6%
      Birmingham, AL210,9288812.3%
      Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.