Is North Carolina Expensive to Live In?

Understanding the cost of living in North Carolina is crucial for those considering a move or evaluating their financial landscape. This assessment involves examining typical expenses, regional variations, and the economic factors influencing these costs. The aim is to provide clarity on North Carolina’s affordability and help individuals determine if it aligns with their financial situation and lifestyle.

North Carolina’s General Affordability

North Carolina’s cost of living is generally below the national average, with its index approximately 7% to 9% lower than the national average of 100. This positions North Carolina as a moderately priced state where earnings may extend further. It ranks as the 28th most affordable state, but costs vary significantly across categories and locations within the state.

Breakdown of Common Expenses

North Carolina’s financial landscape is shaped by major expenses like housing, utilities, groceries, transportation, healthcare, and taxes. These figures are averages and can fluctuate based on individual consumption and local market conditions.

Housing

Housing costs in North Carolina are generally more affordable than the national average. The median home price was approximately $367,600 in January 2025. For renters, the average rent is about $1,359 per month as of August 2025, with a two-bedroom unit averaging around $1,551 statewide.

Utilities

Utility expenses in North Carolina are slightly lower than the national average. The average monthly cost for electricity, water, and gas is around $260. Including cable and internet, the total can approach $400 per month. The average residential electric bill is about $147.07 monthly, reflecting a lower rate per kilowatt-hour.

Groceries and Food

Grocery costs in North Carolina are comparable to or slightly higher than the national average. An average family spends around $1,064 on groceries monthly, or approximately $303 per person. Overall grocery expenses are similar to other parts of the United States.

Transportation

Transportation expenses, including gas and car insurance, are often below the national average. Gas prices are typically 3% cheaper than the average U.S. city. The average annual car insurance premium ranges from $1,741 to $1,955, which is less than the national average. Public transportation is available in major urban centers; a monthly public transport ticket in Raleigh is about $78.

Healthcare

Healthcare costs in North Carolina are near the national average or slightly higher. The average cost of health insurance is around $6,352 per person annually. Healthcare services, such as doctor visits, may cost about 4% more than the national average.

Taxes

North Carolina’s tax structure includes a flat state income tax, sales tax, and property taxes. The individual income tax rate is 4.50% for 2024, projected to decrease to 3.99% after 2025. The state sales tax rate is 4.75%, with total sales tax rates ranging from 4.75% to 7.5% when local taxes are included. Property taxes are assessed locally, with an effective rate of approximately 0.63% on owner-occupied housing, which is below the national average.

Geographic Differences in Costs

North Carolina’s overall cost of living varies significantly across its diverse geographic regions. Urban centers, coastal areas, and mountainous regions often have different cost structures than smaller towns and rural communities. These differences stem from factors like population density, demand for services, and economic activity.

Major metropolitan areas like Raleigh, Charlotte, and Asheville generally have higher living costs, especially for housing. Raleigh’s average one-bedroom rent is around $1,390 per month, with Charlotte being similar. Smaller cities such as Greenville, Rocky Mount, and Fayetteville offer more affordable rental options, often below $1,100 per month for a one-bedroom. Median home prices also vary, with some areas significantly exceeding the state median of $367,600 due to higher demand.

Utility and grocery costs also show regional differences. Utilities in Kill Devil Hills can be 8% more expensive than the national average, while Durham-Chapel Hill might be 10% less. Grocery prices are generally consistent but can be slightly higher in areas like Chapel Hill or lower in Raleigh. These variations show that while North Carolina is generally affordable, location choices significantly impact an individual’s budget.

Underlying Influences on Living Costs

Economic and demographic trends significantly influence North Carolina’s living costs. These factors shape the supply and demand for housing, goods, and services, providing context for observed cost variations.

Consistent population growth and inbound migration significantly drive costs. This influx increases housing demand, pressuring rental rates and home prices in popular areas. Economic development and strong job markets also attract more people, fueling demand and potentially raising costs in prosperous regions. Increased demand for housing and services can sometimes outpace income growth.

Housing supply and demand primarily determine affordability. Where new construction lags population growth, limited inventory leads to competitive markets and elevated prices. Regions with ample land and less demand maintain more affordable housing. These economic forces, along with local regulations and infrastructure, collectively influence the cost of living.