A+
7%
Overall NAT. AVG.
4%
Goods & Services NAT. AVG.
16%
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 Indianapolis Indiana National
Cost of living9390100
Goods & Services9694100
Groceries10098100
Health care8996100
Housing8472100
Transportation9695100
Utilities104107100

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.

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Cost Of Living Quick Facts

  • The cost of living in Indianapolis is 4% higher than the Indiana average
  • The cost of living in Indianapolis is 7% lower than the national average
  • Indianapolis housing is 16% lower than the national average
  • Indiana general sales tax is 37% higher than the national average
  • Indiana state income tax is 43% higher than the national average

Most Affordable Places to Live in and Around Indianapolis

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Compare Indianapolis, IN 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$70,494$5,875$1,645$2,115
      Renters$34,918$2,910$815$1,048
      A good indicator of the general affordability of housing in Indianapolis, IN, 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 Indianapolis, the median monthly income is $70,494 for those who own their own homes. Under the standard rule, that income level would allow for $1,645 to be budgeted for housing expenses each month, at the most. Renters, on the other hand, earn about $34,918, per the median income in the area. That would allow for renters to spend up to $815 on monthly rental expenses.

      Indiana Sales Tax

      State General Sales Tax With Max Surtax
      Indiana 7% 7%

      Indiana Income Tax

      State Income Tax (Low) Income Tax (High)
      Indiana 3.23% 3.23%

      Goods & Services

      Item Indianapolis National avg. Difference
      Haircut $19.53$24.2619.5%
      Beauty Salon $39.03$45.5614.3%
      Toothpaste $3.67$3.700.9%
      Shampoo $1.33$1.284.1%
      Movie $10.91$12.1310.1%
      Bowling $18.70$18.003.9%

      Groceries

      Item Indianapolis National avg. Difference
      Ground Beef $5.91$5.841.3%
      Fried Chicken $1.61$1.572.4%
      Milk $4.73$4.671.3%
      Potatoes $5.07$4.932.7%
      Pizza $12.39$12.092.5%
      Beer $10.30$10.411.1%

      Health Care

      Item Indianapolis National avg. Difference
      Optometrist $73.37$125.6841.6%
      Doctor $99.19$135.7826.9%
      Dentist $109.26$113.293.6%
      Ibuprofen $10.70$10.650.4%
      Lipitor $509.36$468.608.7%

      Housing

      Item Indianapolis National avg. Difference
      Home Price $145,200.00$184,700.0021.4%
      Avg. Mortgage Payment $1,794.91$2,346.6923.5%
      Apartment Rent $911.00$949.004.0%

      Transportation

      Item Indianapolis National avg. Difference
      Gasoline $3.39$3.462.2%
      Tire Balancing $54.63$59.928.8%

      Utilities

      Item Indianapolis National avg. Difference
      All Electricity $207.03$193.996.7%
      Phone $190.02$192.251.2%
      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.
      Beech Grove, IN15,1488811.6%
      New Whiteland, IN6,1788911.1%
      Clermont, IN1,365918.9%
      Speedway, IN12,327928.4%
      Warren Park, IN1,477927.7%
      Indianapolis, IN869,387936.7%

      Cities with similar population

      City Population Cost of Living Index National Avg.
      Charlotte, NC873,5701087.6%
      San Francisco, CA874,784237137.3%
      Columbus, OH889,079946.2%
      Fort Worth, TX892,2211055.2%
      Jacksonville, FL902,488982.0%
      Indianapolis, IN869,387936.7%
      Date & Last Updated: This data reflects 2023 and was released from C2ER in January, 2024; this is the most current data available.