Cost of Living in Indiana

By Kenny Zhu

(Last Updated – July 20, 2026)

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 5.4 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. Here are 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: $51,821 per year

According to the Bureau of Economic Analysis (BEA), the average cost of living in Indiana will run you around $51,821 per year.

When compared to the rest of the nation, Indiana has the sixth lowest cost of living, according to the Missouri Economic Research & Information Center (MERIC) Cost of Living Index for the first quarter of 2026.

Regionally, Indiana ranks exceptionally well within 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 shows that the Great Lakes region is one of the more affordable areas in the country.

Using the BEA’s most recent PCE data from 2024, here is Indiana’s average annual cost of living broken down into several key categories:

Source: The Bureau of Economic Analysis, Personal Consumption Expenditures by State, 2024

Housing Costs in Indiana

Average Housing Costs in Indiana: $931 to $1,963 per month

Indiana’s home prices are considered very affordable when compared to the national average, with the typical home costing $259,711, according to Zillow’s May 2026 data. This is just over two-thirds of the national average U.S. home price of $370,320, according to Zillow.

There are over 3 million housing units in the state of Indiana, approximately 70.6% of which are owner-occupied, compared with the U.S. average of 65.2%. Below, you can see the median mortgage and rental costs for Indiana, sourced from the U.S. Census Bureau 2024 American Community Survey:

•  Median monthly mortgage cost: $1,404

•  Median studio rent: $932

•  Median one-bedroom rent: $931

•  Median two-bedroom rent: $1,132

•  Median three-bedroom rent: $1,276

•  Median four-bedroom rent: $1,384

•  Median five-bedroom (or more) rent: $1,375

•  Median gross rent: $1,104

Your typical housing costs will vary by location. To help you get an idea of what a home costs in each major Indiana city, take a look at their typical home values, according to Zillow’s May 2026 housing data:

Utility Costs in Indiana

Average Utility Costs in Indiana: $373 per month

Utility costs can take up a big chunk of your monthly budget. The typical Hoosier can expect to pay around $373 in monthly utility costs. Here’s the data on some of the key utilities that make up your monthly cost of living in Indiana.

Source: Doxo Insights, 2026 U.S. Household Bill Pay Report

Groceries & Beverage Spending

Average Grocery & Beverage Costs in Indiana: $339 per person, per month

The BEA cites that the average citizen of Indiana spends around $4,070 per year on food and groceries (nonrestaurant). This comes out to a monthly grocery budget of around $339 per month.

Within the Great Lakes region, Indiana urban areas ranked cheapest out of the eight states, closely followed by Pennsylvania. That’s a respectable performance for a region that generally has grocery costs lower than the national average.

Below are the Council for Community and Economic Research (C2ER) 2025 rankings of food costs across major Indiana cities.

Source: The Council for Community and Economic Research – Cost-of-Living Index, 2025 average

Transportation

Average Transportation Costs in Indiana: $9,583 to $17,997 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 $9,583 to a whopping $17,997 a year, according to 2026 data 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 is its low auto insurance rates. According to a study from U.S. News & World Report, Indiana has the 10th cheapest car insurance rates in the country.

Despite the cheap insurance rates, try to keep any NASCAR ambitions confined strictly to the television screen, especially if you’re driving the family minivan.

Source: MIT’s Living Wage Calculator, 2026

Health Care

Average Health Care Costs in Indiana: $11,071 per person, per year

The BEA’s latest personal consumption expenditures report shows that Indianers spend an average of $11,071 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 .

Source: CostofChildCare.org

Taxes

Indiana State Income Tax: 2.95%

Indiana is one of 15 states with a flat-rate tax structure. That means that all residents of Indiana are taxed at a flat 2.95% state income tax rate regardless of how much they make. This differs from the majority of the nation, which relies on a graduated income tax structure.

However, these savings are offset by Indiana’s sales and use taxes. Indiana actually ties Mississippi, Rhode Island, and Tennessee for having the second highest sales tax rate in the nation, at a whopping 7.00%. 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 2026.

Miscellaneous Costs

Now that you have an understanding of the mundane everyday costs, take a look at the costs of some of Indiana’s best-known attractions:

•  Tickets to an Indianapolis Colts game at Lucas Oil Stadium: starting at $5

•  Tickets to an Indiana Pacers game at Gainbridge Fieldhouse: starting as low as $10

•  Tickets to the Indy 500: starting at $59

•  A large tin of Indiana-grown popcorn from Popcorn Café, in Kokomo: from $22

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

The home state of sports legends including 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 Indianapolis Motor Speedway 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 that Indiana-grown popcorn was 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 $21.79 per hour, or $45,323 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 18th most affordable state in the nation.

MERIC data actually ranked Indiana sixth 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 Major City Has the Lowest Cost of Living in Indiana?

Below are some details about the two cities in Indiana with the lowest cost of living, according to the C2ER Cost-of-Living Index for 2025.

Richmond

Originally settled and founded by Quakers in 1806, Richmond is the quintessential “All-American City.” With a cost-of-living index of 80.9, C2ER ranks it as the most affordable city in Indiana. Its home prices and health care costs are among the lowest in the state.

Kokomo

A small city of almost 60,000 residents, Kokomo is located a little over an hour’s drive north of Indianapolis. With a cost-of-living index of 84.0, it ranked the second most affordable city in Indiana, partly due to its low cost of housing and utilities.

FAQ

Is Indiana an affordable state to live in?

Indiana’s cost of living is generally lower than the national average, making it one of the more affordable states in the Midwest. Housing costs, in particular, tend to be lower than in many other parts of the country.

What is the biggest expense for most Indiana residents?

At over $11,000, health care is typically the largest annual expense for Indiana households. This is followed by housing and utilities at just over $8,200 per year.

How do everyday expenses in Indiana compare to the rest of the country?

Many everyday expenses, including groceries, housing, and utilities, are reasonably priced compared to national averages. Costs vary depending on where exactly in Indiana you live, but the Hoosier State could see you get more value for money than other areas of the U.S.