How Much Does It Cost to Live in Alaska?

Living in Alaska presents a unique financial landscape. Understanding the financial commitments is important for anyone considering a move. Geography, logistics, and local economic conditions directly influence daily expenses. This overview prepares prospective residents for the economic realities of the Last Frontier.

Housing Expenses

Housing costs in Alaska encompass a spectrum of prices, influenced heavily by location and property type. The average rent across Alaska is around $1,400 per month, slightly less than the national average of $1,645. Major population centers typically have higher costs.

For instance, a one-bedroom apartment in Anchorage averages $1,410, and $1,650 for a two-bedroom. Fairbanks rents average $1,500 for a one-bedroom and $1,750 for a two-bedroom. Palmer offers more affordable options, with one-bedroom apartments averaging $1,095 and two-bedrooms at $1,375.

For those looking to purchase a home, the median sale price in Alaska was $388,700 (January 2025). Anchorage’s median home price is around $420,000 to $449,000, while Juneau’s median listing price reached $495,000 in April 2024. Wasilla also shows a median listing price near $440,000.

Utility expenses contribute substantially to housing costs, largely due to the colder climate and logistical challenges. Monthly costs for basic utilities (electricity, gas, water, and sewer) average approximately $400.12. When factoring in internet and phone services, the total monthly utility bill can rise to about $691.12. Alaska ranks among the states with the highest utility costs, with heating expenses for fuel types like heating oil and natural gas being a significant component. Fairbanks experiences utility costs more than double the urban national average.

Everyday Living Costs

Beyond housing, daily life expenses in Alaska often exceed national averages. Grocery prices are notably elevated, with Alaskans spending about 36% more on food than the national average, making Alaska the third most expensive state for groceries. This increased cost is largely due to complex logistics and shipping expenses for transporting goods to remote locations.

For example, vegetable oil can cost $10.58 in Anchorage compared to a U.S. average of $8.45, and a dozen eggs might be $3.98 in Anchorage versus the national average of $3.35. In very remote areas, prices can be substantially higher, with milk reported at $19.50 per gallon and bacon at $8 per pound.

Transportation costs are a significant expenditure for Alaskan residents. While the statewide average for gasoline in Summer 2024 was $6.77 per gallon, compared to the national average of $3.39, prices vary considerably by region. Some remote communities experience gas prices as high as $11.50 per gallon.

Vast distances and limited public transportation necessitate reliance on personal vehicles, increasing expenses for fuel and maintenance, especially given extreme weather. Annual transportation costs can range from $4,900 to $13,317.

Healthcare expenses in Alaska are considerably higher than national benchmarks. The average cost of health insurance is $9,356 per person annually, $2,375 above the national average. Urban areas like Fairbanks, Juneau, and Anchorage show medical expenses 47.5% to 51.5% higher than the national average.

Urban Alaskan households allocated an average of 12% of their budgets to medical care in 2023, compared to 8% nationwide. Other expenses like personal care items and entertainment services also tend to be more costly, with non-essential goods and services approximately 48% higher than the national average.

Variations in Cost by Location

Living costs in Alaska are not uniform across the state, exhibiting significant variations based on geographic location and accessibility. The overall Cost of Living Index for Alaska is 124.4, indicating it is more expensive than the national average.

Specific communities present distinct financial realities. For instance, Anchorage’s overall cost of living is approximately 28% higher than the national average, while Fairbanks can be around 33% higher. Juneau, the state capital, also demonstrates a higher cost of living, with some estimates placing it at 29.1% above the national average.

These disparities stem primarily from transportation logistics and population density. Road-accessible communities like Anchorage and Fairbanks generally have more manageable costs than those reachable only by air or sea. Remote areas face increased expenses due to higher shipping costs, passed on to consumers.

Local economic factors, including specific industries or limited competition, also play a role in shaping prices. Unalaska, a remote port community, stands out as one of the most expensive locations, with a cost of living 54% higher than the national average. Fairbanks is considered the least expensive among major Alaskan cities, yet still 21% higher than the national average.

Average Earnings and Income

To provide a comprehensive financial picture, it is helpful to consider average earnings alongside the cost of living. The average household income in Alaska is $114,947, approximately 4% higher than the national average. The median household income was $89,336 in 2023, representing about 113.75% of the U.S. median.

This higher income level often reflects the increased cost of living, as wages are adjusted for elevated expenses. The average income per person is $44,928, while the average family income stands at $133,487.

A unique financial aspect for Alaskan residents is the Permanent Fund Dividend (PFD). This annual payment is distributed to qualifying residents from the earnings of the Alaska Permanent Fund, generated from the state’s natural resource revenues. The PFD amount fluctuates annually, determined by a five-year average of the fund’s performance.

For example, the highest payout was $3,284 in 2022. To be eligible for the PFD, an individual must reside in Alaska for the entire calendar year and demonstrate intent to remain a resident indefinitely.

While the PFD can help offset some living costs, it is not considered a primary source of income. It accounts for approximately 6% of total household income. Alaska does not levy a state income tax or a statewide sales tax, which influences the overall financial burden on residents.