How Much Does It Cost to Live in Alaska?

Alaska presents a distinctive cost of living profile, often exceeding the national average due to its unique geography, remote nature, and challenging climate. While expenses tend to be higher, this varies considerably across different regions within the state. The cost of living is influenced by factors such as transportation of goods and services, and the specialized infrastructure required for colder environments.

Housing Costs

Housing expenses in Alaska generally surpass the national average, with significant variations observed between urban centers and remote areas. For instance, the median home price in Alaska was $388,800 as of January 2025, which is lower than the national median of $418,478, yet limited supply keeps prices relatively high. Anchorage, the state’s largest city, saw its average home value at $407,428 in July 2025, representing a 3.1% increase over the past year. Homes in Anchorage typically receive multiple offers and sell within nine days, indicating a competitive market.

Renting can sometimes be more affordable than the national average in certain areas. As of August 2025, the average rent in Anchorage was $1,307 per month, which is 20% lower than the national average of $1,639 per month. A one-bedroom apartment in Anchorage averages $1,250, while a two-bedroom averages $1,650. In contrast, Juneau, the state capital, had an average rent of $2,950 as of August 2025, with a one-bedroom averaging $1,762 and houses $2,735 per month.

Fairbanks, another major population center, also experiences higher housing costs due to its remote location and climate. Property taxes vary by municipality across Alaska, contributing to the overall cost of homeownership. Limited availability and accessibility particularly impact prices in these distinct locations.

Everyday Expenses

Beyond housing, daily living expenses in Alaska are notably higher than the national average, largely driven by climate and logistical challenges of transporting goods. Utility costs are substantial; monthly expenses in Juneau average around $433.24. Fairbanks leads in utility costs, with 2024 rates more than double the US urban average. These costs are influenced by the need for robust heating systems, often relying on heating oil or natural gas.

Grocery prices are significantly impacted by shipping costs. Urban households in Alaska spend more on groceries; Juneau ranked second nationwide in food costs, Fairbanks third, and Anchorage fourth. A single adult in Anchorage spends an average of $5,219 annually on food, while a family of four can expect to spend around $15,338.

Transportation expenses reflect the state’s vastness and infrastructure. Car insurance in Alaska averages around $1,676 per year or $140 per month. Despite the state’s overall high cost of living, car insurance rates can be comparable to or even lower than the national average. Fuel prices are generally higher, with gasoline averaging $3.90 per gallon in Juneau. Public transportation options are limited outside major cities, often making a personal vehicle a necessity, and remote travel frequently requires expensive air transportation.

Healthcare costs in Alaska are considerably higher than the national average. In 2024, Fairbanks’ medical costs were 51.5% higher than the average, Juneau’s 50.9%, and Anchorage’s 47.5%. Urban Alaskan households spent 12% of their budgets on medical care in 2023, compared to 8% nationwide. Hospital and physician services can be 50% to 80% higher than national averages, and health insurance premiums are nearly 40% above the national average.

Unique Alaskan Financial Factors

Alaska’s financial landscape includes several unique elements that can significantly influence a resident’s overall financial well-being. One notable aspect is the Permanent Fund Dividend (PFD), an annual payout to eligible residents from the state’s oil wealth investments. To qualify for the 2025 PFD, an individual must have been an Alaska resident for the entire 2024 calendar year and intend to remain indefinitely, without claiming residency or benefits from another state since December 31, 2023. The 2023 PFD amount was $1,312, and the 2024 amount was $1,702. This dividend is taxable for federal income tax purposes and is reported on Form 1099-MISC.

Alaska also boasts a distinct tax structure, with no state income tax and no state sales tax. This absence of broad-based state taxation can lead to higher take-home pay for residents. However, local sales taxes may be imposed by municipalities, and property taxes remain a primary form of taxation at the local level.

The remoteness of Alaska contributes to higher shipping costs for many goods. This added expense is often passed on to consumers, increasing final prices compared to the contiguous United States. For example, an MRI or CT scan in Anchorage costs around $2,000, significantly higher than the average $500 in Seattle, partly due to equipment shipping.

Seasonal employment is prevalent in Alaska, particularly in industries like tourism, fishing, and oil and gas. While these jobs offer competitive wages, their seasonal nature may require careful financial planning to manage income fluctuations. Outdoor recreation adds to discretionary spending, with costs for specialized gear, permits, and transportation to remote areas. An annual resident sport fishing and hunting license costs $60, while a non-resident annual sport fishing license is $100.

Earning Potential

Alaska generally offers higher average wages and median household incomes compared to the national average, which can help offset the elevated cost of living. The median household income in Alaska was $89,336 in 2023, 14% higher than the US median, with the average household income at $114,947. For full-time workers, the average salary was $81,714 in 2023, compared to the US national average of $69,880, positioning Alaska among the top-paying states.

Key industries contributing to these higher wages include oil and gas, healthcare, tourism, fishing, and government. Management occupations in Anchorage had an average hourly wage of $64.49 in May 2024, with healthcare practitioners averaging $57.37. While the cost of living in cities like Anchorage and Fairbanks is higher, median salaries can reach $72,000 in Anchorage, with 80% of salaries falling between $56,000 and $95,000. A salary range of $60,000 to $80,000 is often sufficient for a single person in Alaska.

The job market outlook varies by region and industry, with specialized skills often commanding higher pay. High-paying fields such as oil and gas and healthcare can offer salaries reaching up to $150,000. Some federal employees or those in certain private sector jobs may also receive a cost-of-living adjustment (COLA) to account for the higher expenses in the state.