Cost of Living in Minnesota

The cost of living in Minnesota, or any state, is a nebulous figure. An average or median living cost figure has the potential to mislead potential homebuyers who use the average cost of living as a budgeting guide. So, this guide seeks to inform people about the costs of living in Minnesota and the nuances of the average cost. 

Overall, the average cost of living in Minnesota is $55,061.78 per year. But, keep in mind that that figure represents the cost of living for a family of three with one child and two adults who work full-time. It also represents all counties in the state, some of which are urban, some of which are rural, and some of which are in between. 

The Minnesota Employment and Economic Development’s Cost of Living Tool considers the costs of child care, food, health care, housing, transportation, and taxes each year. We’ll explore each of these elements, but we’ll start with one of the leading factors contributing to the cost of living in Minnesota: the real estate market in Minnesota.

Real Estate Market in Minnesota

Real Estate Market in Minnesota

The real estate market in Minnesota, as of 2021, is promising for homeowners, renters, and real estate investors across the state. Housing prices have risen in recent years, and this is partially due to the decreased inventory in the real estate market. 

Companies that buy houses in Minnesota, either for investment or resale, are contending with the inventory shortage as well. With a median home price between $305,474.00 and $333,000.00, Minnesota’s home values sit slightly below the national average of $386,650.00. Of course, the lack of supply and increased demand resulting in increasing home prices.

The real estate market in Minnesota offers an opportunity for coastal residents to relocate to a state with a cheaper cost of living. Even if someone sold their house in another state for the US median home price and purchased a $333,000.00 home in Minnesota, they’d make a non-negligible profit. 

Costs of Living in Minnesota

The calculation for costs of living in Minnesota is nuanced and involves exploring a variety of variables. Some variables that impact the cost of living are

  • Bills and utility costs
  • Transportation costs
  • Housing prices in Minnesota
  • Food and shopping prices
  • Health and medical costs

While averages are a useful tool in calculating the cost of living, these variables impact Minnesotans’ cost of living differently across the state. 

If a single man living in Minneapolis, for instance, worked in Minneapolis and either took the bus or walked to the office every day, his transportation costs would be significantly lower than a family of 3 living in Alexandria who must commute to school and work by car. 

Let’s explore how each of the components of the cost of living calculation impacts the cost of living in Minnesota overall. 

Bills and Utility Costs

Bills and utility costs vary across Minnesota, but by determining how location impacts the average, you can estimate the bills and utility costs you could expect upon moving to Minnesota. 

Some utility costs include

  • Electricity
  • Water
  • Gas
  • Trash collection
  • Phone, cable, and internet

The average utility cost in Minnesota is $447.63 per month for a family of 3 with one child. But, if you don’t have children, or if you’re single and living in a smaller-than-average apartment in a metropolis, your utility costs per month would likely be significantly lower than this. 

Consider how your lifestyle will impact your cost of living. Will you be living in a large home, heating or cooling it year-round, and residing in the suburbs? Do you pay for faster-than-average internet? Think critically about how your lifestyle and desired locale will impact your bills and utility costs in Minnesota.

Transportation Costs

Transportation costs are also nuanced. People who must commute by car are likely to spend significantly less on transportation than people who take public transit, walk, or bike to work. Living in a big city would decrease your transportation costs compared to suburban-dwellers commuting into the city every day. 

Consider the average commute in Minnesota: 24 minutes. Assuming that all of that commute is completed by car, both ways, five days a week, and in a car with average gas mileage (24.9 mpg, but we’ll round down to 24 for simple math), the average highway commuter (going 60 miles per hour) would spend $126.00/month on gas alone (assuming an average gas price of $3.15).

In a home with a second adult working full-time with an equal commute, double that figure. Add in even more gas costs for dropping off children to school and activities. Add car repair and maintenance. This is the average transportation cost that Minnesotans can expect, but daily transportation looks vastly different for city dwellers who take the bus or walk wherever they need to go.

Consider how far your home in Minnesota will be from your job, and think about how that distance ranks on your priority list. Moving closer to work will decrease your transportation costs in every scenario.

Housing Prices in Minnesota

As explored above, the median price of a home in Minnesota is between $305,474.00 and $333,000.00. If you already live here, you’ve likely noticed an increase in housing prices in Minnesota in recent years, and the trend may be inspiring you to Google, “Sell my house fast Minneapolis” to take advantage of high values. 

But, the potential of renting or living in a paid-for home complicates the average housing cost in Minnesota. The average monthly cost of housing in Minnesota is $833.71. But, city dwellers can expect to pay more, and people living in smaller spaces can expect to pay less. Consider your buying vs. renting and location situation to best determine your monthly housing costs.

Food and Shopping

Costs of food and shopping are difficult to estimate. The average cost of food and shopping should include considerations for

  • The number of people in your family
  • Their dietary restrictions and choices
    • Is anyone eating expensive vegan alternatives?
    • Is anyone only subsisting on protein shakes?
    • Do lactose-intolerant family members have to splurge on plant-based milk?
  • Where they shop
    • The average chain grocery store will likely be cheaper than a specialty grocery or health food store.
  • What they buy other than food
    • Alcohol
    • School supplies
    • Cleaning supplies
    • Disposable paper and plastic products

It’s a difficult calculation that’s best determined for each circumstance. But, it’s one of the elements of the cost of living in Minnesota that you can control. To reduce your food and shopping costs, shop at cheaper stores, consider changing the products you purchase to cheaper alternatives and switch to store brands. 

woman calculating Health and Medical Costs

Health and Medical Costs

Health and medical costs are also difficult to determine since some Minnesotans aren’t paying health insurance premiums and are in generally good health, while others pay incredibly high premiums due to preexisting conditions and have higher medical costs. 

For a family of three with one child and two full-time workers, the average monthly healthcare cost is $525.32 per month. Of course, the size of your family, whether or not you pay for health insurance, and your monthly prescription drugs will change this figure, so do your best to estimate based on your circumstances.

Average Cost of Living in Minnesota

With an average living cost of $55,061.78 per year, the costs of living in Minnesota are significantly cheaper compared to the national average. But, if the cost of living is simply too high for you, or you’re trying to sell your home and rent to save money on monthly housing costs, consider seeking out people and companies that pay cash for houses.

Minnesota: Are You Coming or Going?

If the statistically low cost of living and Midwestern sentiment are enticing you to move to Minnesota, we look forward to welcoming you to your new home state! But, if Minnesota just doesn’t feel like the same home it used to be and you’re looking to relocate to another state, do some research on selling a house and moving out of state

The average cost of living in Minnesota is a nuanced statistic, but by considering your deviations from the average person, you can establish a more informed viewpoint about your expected living costs. 

kevins

Kevin is a real estate investor dedicated to helping homeowners sell their properties quickly and without the stress and hassle of a traditional listing.

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