D-
23%
Overall NAT. AVG.
2%
Goods & Services NAT. AVG.
82%
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 Homewood Alabama National
Cost of living12388100
Goods & Services9896100
Groceries9796100
Health care9487100
Housing18272100
Transportation9191100
Utilities108102100

An Overview of Cost of Living in Homewood, AL

Understanding the cost of living in Homewood can help future residents assess whether their current financial situation aligns with the expenses they will encounter. It enables them to plan for potential changes in their budget and lifestyle. The Homewood cost of living index is 123, which is 23% higher than the national average. The cost of living index is calculated by taking into account multiple categories, which encompass both the cost of everyday expenditures and larger expenses as well.

If affordability is among your top priorities when searching for a new place to live, this area may not be the ideal fit, as the cost of living in Homewood is among the most expensive in the United States. Just a minority of areas exhibit a cost of living at least 20% higher than the national average, and unfortunately, Homewood falls into this category, which may not align with your goal of finding a budget-friendly living environment.

Housing costs are a very significant part of the Homewood cost of living index and generally encompass a large percentage of take-home income. Unfortunately, in this area, the housing costs for both homes and rentals were 82.1% more than the average city. This includes things like home and rent prices, mortgage rates and insurance.

Is Homewood Affordable?

Wondering if Homewood is affordable? It's a question that often comes up when you're thinking about a new city since affordability can really shape your decisions. The cost of living index (covered earlier), housing expenses and income levels all play a part in the affordability equation. In Homewood, for example, the median home price is 105.6% higher than what folks pay nationally, and monthly rent is 27.1% higher than the usual rates. Plus, income levels matter too, with Homewood boasting a median household income of $84,418, which is 52.6% higher than the national average.

What Factors can Influence the Cost of Living in Homewood?

Subsidies: Certain cities or states may implement government subsidies or assistance programs with the goal of alleviating the cost of living pressures on their residents. These programs encompass a broad spectrum 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 farming subsidies. Areas offering fewer subsidies may experience a rise in their cost of living.

Groceries: Grocery expenditures have undergone notable escalation over the last 2-3 years. In some markets, the cost of food products has surged by more than 20%, while others have experienced only modest increments. These fluctuations in food costs can have a significant impact on the overall cost of living in any region. In Homewood, the groceries index registers 3.3% lower than the national average.

Housing: High demand for housing in desirable locations can drive up property prices and rental rates. This can be a primary contributor to a higher cost of living. While low demand for housing, especially in undesirable locations, can have the reverse effect and drive prices down, resulting in a lower cost of living. The housing index in Homewood, is 82.1% higher than the national average.

Where is the Data From?

The Homewood cost of living data you see above is sourced from the C2ER cost of living index, providing a practical and accurate means of comparing living expenses in urban areas. Updated quarterly, this index gathers data from over 300 independent researchers, covering more than 60 goods and services, in 6 different categories. These selections are made meticulously to represent a wide range of consumer expenditure categories. The weightings applied to cost differences are based on government survey data that tracks spending patterns among professional and executive households. It's important to note that while the C2ER index excludes data on sales or income tax rates, AreaVibes factors 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 Homewood is 39% higher than the Alabama average
  • The cost of living in Homewood is 23% higher than the national average
  • Homewood housing is 82% higher 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 Homewood

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Compare Homewood, AL Cost of Living

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      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$127,297$10,608$2,970$3,819
      Renters$47,050$3,921$1,098$1,412
      The percent of monthly income spent on housing can be a good indicator of the affordability of housing in Homewood, AL, as well as the overall cost of living. As a general rule of thumb, the debt-to-income ratio (DTI) for homeowners or renters should be not more than 28 percent of gross income to be spent on housing related costs and not more than 36 percent of income on all expenses, including debts. The median income for Homewood homeowners, is $127,297. This would allow for a maximum of $2,970 per month to be spent on housing costs. For renters, the median monthly income is $47,050 which would result in a maximum of $1,098 to be spent on rental costs.

      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 Homewood 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 Homewood 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 Homewood 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 Homewood National avg. Difference
      Home Price $379,800.00$184,700.00105.6%
      Avg. Mortgage Payment $1,935.73$2,346.6917.5%
      Apartment Rent $1,206.00$949.0027.1%

      Transportation

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

      Utilities

      Item Homewood 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%
      Edgewater, AL8328218.1%
      Brighton, AL2,8738317.4%
      Mulga, AL7578316.9%
      Lipscomb, AL2,0558416.3%
      Homewood, AL25,17012323.0%

      Cities with similar population

      City Population Cost of Living Index National Avg.
      Palm Springs, FL25,1681022.1%
      Fountain Hills, AZ25,16713837.6%
      Haines City, FL25,178963.9%
      Austin, MN25,1809010.0%
      Caledonia, WI25,1821054.6%
      Homewood, AL25,17012323.0%
      Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.