Is It Expensive to Live in North Carolina?

North Carolina has experienced significant growth and appeal as a place to live in recent years. Many individuals considering relocating often inquire about the expense of living in the state. Understanding the various components that contribute to the overall cost of living is important for anyone planning their finances within North Carolina. This overview aims to provide clarity on the financial aspects of residing in the Tar Heel State.

North Carolina’s Overall Cost of Living

North Carolina generally presents a more affordable cost of living compared to the national average, though this can vary. For a single person, the estimated average cost of living, excluding rent, is approximately $2,241 per month. This figure encompasses various daily essentials, including food, utilities, and other routine expenditures. While it offers a relatively affordable lifestyle, the total cost is influenced by specific location choices within the state.

The cost of living index in North Carolina indicates that certain categories are more or less expensive than the national benchmark. Housing costs, for instance, are about 14% lower than the national average. Utilities are approximately 2% lower than the national average. Grocery costs, however, are roughly on par with the rest of the country. These factors contribute to North Carolina’s position as a state offering a generally accessible financial environment for its residents.

Understanding Major Household Expenses

Household expenses constitute a significant portion of an individual’s budget, with several key categories determining overall affordability. Housing, utilities, food, transportation, and healthcare each contribute to the financial landscape. Analyzing these areas provides a clearer picture of the typical costs associated with living in North Carolina.

Housing

Housing typically represents the largest monthly expense for residents. As of August 2025, the average rent for a one-bedroom apartment across North Carolina is approximately $1,359 per month. For a two-bedroom apartment, the average rent is around $1,551, while a three-bedroom rental can average $1,925 or more. The median home price in North Carolina was approximately $367,800 as of January 2025. These figures illustrate that while housing costs are generally below the national average, they remain a substantial financial consideration.

Utilities

Utility costs are a consistent monthly expenditure. The average monthly electric bill for North Carolinians in 2025 is approximately $141.29. Natural gas bills average around $213.66 per month for a family of three in a single-family home, with variations based on seasonal heating needs. Water and sewer services typically cost about $50 per month. Internet and cable TV bills average approximately $114.66 monthly, with trash removal services adding another estimated $24 per month. The total average monthly utility cost for a family of three in a single-family home is around $608.27.

Food

Food expenses encompass both groceries and dining out. Monthly grocery expenses are estimated at around $302.50 per person. For a couple, monthly grocery spending can range from $600 to $800, influenced by dietary preferences. Dining out also contributes to food costs, with fast food meals typically between $7 and $10, and casual restaurant meals averaging $15 to $25 per person. Mid-range restaurant meals might average $50.

Transportation

Transportation costs involve vehicle ownership and fuel expenses. The average cost of full coverage car insurance in North Carolina is approximately $1,955 per year, or about $163 per month. Minimum coverage averages $661 annually, or $55 per month. These rates are generally below the national average for car insurance. As of August 2025, the average price of gasoline in North Carolina was around $2.84 per gallon, which is lower than the national average.

Healthcare

Healthcare expenses include insurance premiums and potential out-of-pocket costs. The average cost of an Affordable Care Act (ACA)-qualified health plan for a single adult in North Carolina is approximately $503 per month in 2025. This cost can vary based on factors such as age, location, and plan type. For a 50-year-old in Wake County earning $40,000 annually, a subsidized plan might cost about $154 per month.

Cost of Living Across North Carolina Regions

The cost of living in North Carolina exhibits significant variations depending on the region, primarily influenced by population density and economic activity. Expenses, especially housing, differ considerably between major metropolitan areas, mid-sized cities, and rural locales. Choosing a location within the state can substantially impact overall financial outlays.

Major metropolitan areas, such as Charlotte, Raleigh-Durham, and Asheville, generally have higher living costs. In Charlotte, the average rent for a one-bedroom apartment is approximately $1,485, and the median home price is around $405,900. Raleigh’s average rent for a one-bedroom apartment is about $1,199, with studio apartments averaging $1,709. These urban centers offer more economic opportunities but come with elevated expenses, particularly for housing.

Mid-sized cities like Greensboro, Winston-Salem, and Fayetteville tend to offer a more moderate cost of living. For instance, in November 2024, the median rent for a one-bedroom apartment in Greensboro was $1,001. These areas often provide a balance between amenities and affordability. Conversely, rural areas across North Carolina are typically the most affordable. Lexington, for example, features average one-bedroom rents of about $850 and median home prices around $220,000. This demonstrates that significant savings on housing are possible by choosing less populated regions.

Taxes and Income in North Carolina

Beyond direct expenses, state taxes and income levels play a role in the financial feasibility of living in North Carolina. Understanding the tax structure and prevailing income standards provides a more complete financial context.

North Carolina has a flat individual income tax rate, meaning all residents pay the same percentage regardless of income level. For the 2025 tax year, the individual income tax rate is 4.25%. This rate is part of a plan to gradually decrease it further, reaching 3.99% for tax years after 2025. Capital gains from investments are taxed at this same individual income tax rate.

The state sales tax rate in North Carolina is 4.75%. However, local municipalities can add their own sales taxes, resulting in a combined sales tax rate that can be as high as 7.5%. Property taxes in North Carolina are locally assessed, varying by county and municipality, but the statewide average property tax rate is around 0.63% of assessed home value. This rate is generally considered to be on the lower side nationally.

North Carolina’s median household income was approximately $70,804 in 2025. This income level influences the ability of residents to afford housing and other expenses. For instance, an affordability ratio suggests it takes about 5.8 years of the median household income to afford the median home sale price in North Carolina, which was $412,000 in early 2025. While the state’s cost of living can be manageable, income levels are a determining factor in overall financial comfort.