What Is the Average Cost of Living in Minnesota?

The “cost of living” represents the financial outlay necessary to maintain a certain standard of living within a specific geographical area. This encompasses common household expenses such as housing, food, transportation, and healthcare. Understanding these expenditures is important for individuals and families considering relocation or seeking to manage their finances effectively.

Key Components of Cost of Living

The cost of living comprises several expenditure categories. Housing expenses typically include rent or mortgage payments, property taxes, and insurance premiums.

Utilities cover services such as electricity, natural gas, water, sewer, internet, and sometimes garbage collection. Food costs include groceries for home consumption and meals outside the home. Transportation costs include vehicle ownership expenses like fuel, insurance, and maintenance, or public transit. Healthcare costs include insurance premiums, deductibles, co-pays, and out-of-pocket medical expenses. Miscellaneous goods and services cover personal expenses, from clothing and personal care to entertainment and childcare.

Average Costs Across Major Categories

Minnesota’s overall cost of living is generally lower than the national average, making it a comparatively affordable state for many. The state’s cost of living index is approximately 2.8% lower than the U.S. average. This affordability extends across several key categories, though some specific expenses can be higher.

Housing expenses in Minnesota are notably below the national average. The median rent statewide is around $1,505.37, which is slightly lower than the national median of $1,529.01. For those looking to purchase a home, the median home price in Minnesota is approximately $360,000, compared to the U.S. median of $436,000. Property taxes in Minnesota average around 1.11% of a home’s value, which ranks it in the top 20 nationally for effective property tax rates.

Utility costs in Minnesota are generally in line with or slightly below national averages. The average monthly electric bill is about $110.19, while the national average is $135.25. Natural gas costs are also lower, at $11.85 per thousand cubic feet compared to $13.25 nationally. Combined monthly utility bills, including electricity, water, heating, and garbage, can average around $306, though this can rise to about $585 when including internet and phone services.

Food costs are a significant part of household budgets. Residents spend an average of $250.56 weekly on groceries for home consumption, compared to the U.S. average of $270.21. Dining out also contributes, with Minnesotans spending about $97.07 weekly on food prepared outside the home.

Transportation costs in Minnesota tend to be lower than the national average. The average price for a gallon of regular gasoline is around $3.22, while the U.S. average is $3.46. Annual auto insurance premiums average about $986.19, which is less than the national average of $1,189.50. Public transportation options exist, particularly in the Minneapolis-St. Paul metropolitan area, where a typical fare is around $2.00.

Healthcare expenses in Minnesota are also a consideration. Employees with employer-sponsored health insurance pay an average of $1,537 annually for coverage. This is slightly less than the national average employee contribution of $1,637. Overall, per-person health care spending for commercially insured Minnesotans was approximately $6,813 in 2022.

Regional Variations in Minnesota

The statewide averages for the cost of living in Minnesota provide a general picture, but actual expenses can differ significantly based on the specific region. Metropolitan areas typically present higher costs, particularly for housing, compared to mid-sized cities or rural parts of the state. These regional disparities are influenced by factors such as population density, job market dynamics, and the availability of services.

Minneapolis-St. Paul

The Minneapolis-St. Paul metropolitan area, often referred to as the Twin Cities, generally has higher living expenses than other parts of Minnesota. For instance, the median home price in the Minneapolis-St. Paul metro area was $373,500 in the first quarter of 2024. Rent for a one-bedroom apartment in Minneapolis can be around $1,394 per month. This contrasts with more rural areas, where housing costs can be considerably lower.

Mid-sized cities

Mid-sized cities like Duluth and Rochester also show variations in cost. Rochester’s cost of living is approximately 7.0% higher than Duluth’s. Housing costs in Rochester are about 20% more expensive than in Duluth. For example, while the average rent in Minneapolis is higher, smaller cities like Duluth or Rochester may have rents around $900 for a one-bedroom apartment.

Rural areas

Rural areas throughout Minnesota offer the lowest costs of living, especially for housing. The median home price in some rural towns can be as low as $250,000, and rent can be under $700 per month. However, while housing is cheaper, transportation costs can be higher in rural areas due to longer distances and less access to public transit. Childcare costs also show significant regional differences, averaging nearly $700 per month in the Twin Cities metro but closer to $300 in greater Minnesota.