Cost of Living in Indiana

By Kenny Zhu

(Last Updated – 02/2025)

A venerable sports mecca of the United States, Colts, Pacers, and NASCAR fans all call Indiana their home — with each fanbase as rabid as the next when it comes to their respective franchise.

Regardless of their sports heritage, all native Hoosiers agree that Indiana’s gorgeous sunsets are a sight to behold when viewed against the backdrop of its 5.25 million acres of golden rolling cornfields.

With a population of over 6.9 million smiling friendly faces, Indiana meshes southern charm with affordable living costs. We cover some of the key statistics that make up the cost of living in Indiana.

What’s the Average Cost of Living in Indiana?

Average Cost of Living in Indiana: $49,527 per year

According to the Bureau of Economic Analysis, the average cost of living in Indiana will run you around $49,527 per year.

When compared to the rest of the nation, Indiana has the 8th lowest cost of living, according to MERIC’s 2024 Cost of Living Index.

Regionally, Indiana ranks exceptionally well for the Great Lakes region, ranking as the least expensive state of that area on the MERIC scale. The BEA’s Personal Consumption Expenditures (PCE) data show that the Great Lakes region is one of the more affordable areas in the country.

Using the BEA’s most recent PCE data from 2023, we’ve broken down Indiana’s average annual cost of living statistics into several key categories:

Housing Costs in Indiana

Average Housing Costs in Indiana: $1,086 to $1,650 per month

Indiana’s home prices are considered very affordable when compared to the national average, with the typical home costing $238,168, according to Zillow’s June 2024 data. This is around two-thirds of the national average U.S. home price of $355,328, according to Zillow.

There are over 3 million housing units in the state of Indiana, approximately 70,4% of which are owner-occupied, compared to the U.S. average of 65.0%. We’ve provided the median mortgage and rental costs for Indiana below, sourced from the U.S. American Community Survey (ACS) for 2023.

•  Median monthly mortgage cost: $1,355

•  Median studio rent: $1,158

•  Median one-bedroom rent: $1,086

•  Median two-bedroom rent: $1,254

•  Median three-bedroom rent: $1,424

•  Median four-bedroom rent: $1,650

•  Median five-bedroom (or more) rent: $1,386

•  Median gross rent: $1,238

Your typical housing costs will vary by location. To help you get an idea of what a home costs in each major Indiana city, we’ve included their typical home values below, according to Zillow’s December 2024 housing data:

Utility Costs in Indiana

Average Utility Costs in Indiana: $406 per month

Utility costs can take up a big chunk of your monthly budget, and the typical Hoosier can expect to pay around $406 in monthly utility costs. Here’s the data on some of the key utilities that make up your monthly cost of living in Indiana.

Sources: U.S. Energy Information Administration, Electric Sales, Revenue, and Average Price; Statista.com “Average monthly residential utility costs in the United States, by state”; DoxoInsights, U.S. Cable & Internet Market Size and Household Spending Report; and Rentcafe.com, What Is the Average Water Bill? June 2024

Groceries & Food

Average Grocery & Food Costs in Indiana: $336.08 per person, per month

The BEA cites that the average citizen of Indiana spends around $4,033 per year on food and groceries (nonrestaurant). This comes out to a monthly grocery budget of around $336.08 per month).

Within the Great Lakes region, Indiana ranked 2nd out of 5 states, with Wisconsin offering slightly lower monthly grocery costs by a margin of just $10. That’s a fairly respectable performance for a region that does well on grocery costs as a whole.

Below are the Council for Community and Economic Research’s 2024 rankings of food costs across major Indiana cities.

Transportation

Average Transportation Costs in Indiana: $10,627 to $19,774 per year

The home state of the Indy 500 takes transportation seriously, even though the average Indiana driver probably spends more time stuck behind a tractor or a train crossing than they do watching races. A guy can still dream, right?

The cost of transportation for the average Hoosier costs anywhere from $10,627 to a whopping $19,774 a year, according to data as of February 2025 from MIT’s Living Wage Calculator. While not cheap, this falls in line with the average cost of transportation in the United States as a whole.

What Indiana does have going for it are its low auto insurance rates. According to a study from U.S. News & World Report, Indiana has the 7th cheapest car insurance rates in the country.

Despite the cheap insurance rates, we still recommend keeping one’s NASCAR ambitions confined strictly to the television screen, especially if you’re driving the family minivan.

Health Care

Average Health Care Costs in Indiana: $10,342 per person, per year

The BEA’s latest personal consumption expenditures report shows that Indianers spend an average of $10,342 per year on health care-related expenses. The actual amount paid will vary according to your age, habits, and health history.

If you’re looking for affordable health care in Indiana, you can shop for and compare health insurance providers in Indiana on the healthcare.gov federal insurance marketplace.

Child Care

Average Child-Care Costs in Indiana: $815 to $1,312 per child, per month

Child-care costs in Indiana will vary based on your location, child’s age, and what type of care you seek.

If you’re struggling to find affordable childcare in Indiana, the Indiana Family and Social Services Administration can help you apply for assistance through the Federal Child Care and Development Fund .

Taxes

Indiana state income tax: 3%

Indiana is one of ten states with a flat rate tax structure. That means that as of January 1, 2025, all residents of Indiana are now taxed at a flat 3% state income tax rate (down from 3.15% in previous tax years) regardless of how much they make. This differs from the majority of the nation, which relies on a graduated income tax structure.

However, where these savings are offset are Indiana’s sales and use taxes. Indiana actually ties Mississippi, Rhode Island, and Tennessee for having the 2nd highest sales tax in the nation, at a whopping 7%. Only California has a higher sales tax rate of 7.25%, according to the Tax Foundation’s State Individual Income Tax Rates and Brackets for 2025.

Miscellaneous Costs

Now that we’ve covered the mundane everyday costs, let’s take a look at the costs of some of Indiana’s best-known attractions.

•  Tickets to Indianapolis Colts game at Lucas Oil Stadium: starting at $54

•  Tickets to Indiana Pacers game at Gainbridge Fieldhouse: starting as low as $11

•  Tickets to the Indy 500: $45 – $285

•  Two-gallon tin of Indiana-grown popcorn from Popcorn Café, in Kokomo: $20

•  1 slice of the Indiana’s official state pie, sugar cream (aka “Hoosier” pie) at Wick’s Pies in Winchester: $3.45

The home state of sports legends like Larry Bird and Peyton Manning wears the colors of its sports teams with pride. Depending on how much you want to live it up, tickets for the best seats at these games can cost thousands of dollars.

If NASCAR and Formula 1 are more your scene, seats at the Indy 500 can go for a lot cheaper, especially since the stadium is just one huge outdoor arena. Regardless of your sport of choice, Indiana is certainly a tailgater’s paradise.

Indiana drivers are also fond of quick snacks while driving through its miles of unending cornfields. It’s no coincidence then that popcorn was officially made the official state snack as of July 1st, 2021! Indiana harvests over 76,000 acres of corn for popcorn production each year.

Finally, where would you be if you didn’t stop at one of Indiana’s signature roadside diners for a quick plate of chicken-fried steak and traditional sugar cream pie? Both of these delicacies are staples of the Hoosier diet.

How Much Money Do You Need to Live Comfortably in Indiana?

The average single, childless adult in Indiana needs to earn at least $20.81 per hour, or $43,284.80 per year, to qualify for a “living wage,” according to MIT’s Living Wage calculator.

However, how much it costs to “live comfortably” will depend on your own tastes and lifestyle. As far as states go, Indiana isn’t a bad candidate to settle down in. U.S. News & World Report’s Affordability Rankings ranked it the 6th most affordable state in the nation.

MERIC data actually ranked Indiana 11th in the nation in terms of costs of living, largely due to Indiana’s affordable housing and grocery costs. These are two of the largest expenditures for most households.

What City Has the Lowest Cost of Living in Indiana?

Below, we’ve listed the two cities in Indiana with lower cost of living, according to the Council for Economic and Community Research’s (CCER) Cost of Living Index for 2024.

Richmond

Originally settled and founded by Quakers in 1806, Richmond is the quintessential “All-American City.” CCER’s latest Cost of Living Index ranked it as the most affordable city in Indiana. Its home prices and healthcare costs are among the lowest in the state.

Kokomo

A small city of around 59,890 residents, Kokomo is located a little over an hour’s drive north of Indianapolis. It was ranked the third most affordable city in Indiana due to its low cost of housing and transportation.