Cost of Living in New Mexico

(Last Updated – September 8, 2025)

New Mexico’s moniker, the Land of Enchantment, conjures images of its dramatic landscapes, ranging from sweeping deserts and grasslands to rugged mesas to snow-topped mountains. The state is also known for its unique mix of Native American, Spanish, and Anglo-American cultural traditions, which imbues the state’s architecture, cuisine, and holiday celebrations.

New Mexico’s more than two million residents live here for a wide variety of reasons, including the lure of the sunny southwestern weather, outdoor recreations like hiking, rock climbing, and skiing, and the affordable cost of living. How much does it cost to live in New Mexico? Read on for the details about just how affordable the Land of Enchantment is.

What’s the Average Cost of Living in New Mexico?

Average Cost of Living in New Mexico: $46,076

What is the cost of living in New Mexico? Lower than the national average, according to the data. The Missouri Economic Research and Information Center (MERIC) ranks the state as the 19th most affordable in the country, giving it a Cost of Living Index (COLI) of 94.2 on a scale that uses 100 as the average cost of living in the U.S. And U.S. News and World Report rates New Mexico as the 13th most affordable state in its “Best States Rankings.”

How does that translate into dollars and cents? The average amount a New Mexican spends on all personal expenditures annually is $46,076, according to the Bureau of Economic Analysis. That works out to just $3,840 per month. Bear in mind that many factors can affect what your costs are, including the size of your family, your housing situation, your health care needs, your work commute, and many others. But let’s take a look at how the costs typically break down across major categories.

Housing Costs in New Mexico

Average Housing Cost in New Mexico: $859 to $1,828

Whether you qualify as a first-time homebuyer or are on your fourth house, you’re probably aware that housing is likely to be the biggest line item in your budget. The median monthly mortgage payment in the state is $1,510, and average home value is $314,968, which has increased 1.8% over the past year but still suggests you probably won’t need a jumbo loan. Average home values vary significantly by city, however, as you can see from the list below.

•  Albuquerque: $342,911

•  Las Cruces: $290,266

•  Rio Rancho: $358,394

•  Santa Fe: $590,845

•  Taos: $449,277

If you’re not yet prepared for buying your first home, or if you prefer the ease of renting, the median gross rent in New Mexico is $1,084. Naturally, rent varies by apartment size, as the following chart illustrates.

Bear in mind, too, that buying a place will probably take more lead time and preparation than renting and also require learning more about getting a home loan, including the mortgage preapproval process.

Recommended: Different Types of Home Mortgage Loans

Utility Costs in New Mexico

Average Utility Costs in New Mexico: $297.20

Once you’ve covered your housing costs, you’ll need to consider utilities. Below are the average monthly costs in New Mexico for some standard utilities. Of course, pricing will also depend on your usage, the time of year, the number of people in your household, and other factors.

Food and Beverage

Average Food and Beverage Costs in New Mexico: $336 per month

The average annual expenditure for groceries in New Mexico is $4,031 per person, according to the Department of Economic Analysis. This means that when it comes to food and beverages, the average monthly expense for one person is about $336, and for a family of four, it’s $1,344.

Exactly how much you’ll pay for groceries in New Mexico is influenced by your location. The Council for Community and Economic Research ranks the average food costs in American cities, setting the U.S. average at 100 as the baseline. Here’s how three major urban areas in New Mexico measure up. Note that all three cities score a grocery items index lower than the national average.

Transportation

Average Transportation Costs in New Mexico: $9,690 to $18,031 per year

New Mexico ranks 34th in the country for transportation, according to the U.S. News and World Report rankings. The state has some public transportation, but it’s limited. The New Mexico Rail Runner Express is a commuter train system that connects destinations in central New Mexico, and the state also has bus services both between and within cities. However, most people commute to work and travel by car.

In New Mexico, as everywhere, what your household spends on transportation costs depends heavily on the number of people in your family:

Health Care

Average Health Care Costs in New Mexico: $7,998 per year

Health care can be a major expense wherever you live, and in New Mexico, it averages out to $7,998 annually, according to data from the Bureau of Economic Analysis. That translates to $666.50 per month to cover health insurance premiums, doctor visits, and other health needs.

New Mexicans pay slightly above the average for their neighbors in the southwest region – which is $7,618 per year – but well below the national average of $9,130.

Child Care

Average Child Care Costs in New Mexico: $753 to $1,095 per child, per month

If you’ve got kids, child care can put a significant dent in your budget in any state, and New Mexico is no exception. The costs vary depending on the age of your child and the type of care, as data from CostofChildCare.org demonstrates.

Taxes

Highest Marginal Tax Rate in New Mexico: 5.90%

New Mexico’s state individual tax income rates range from 1.70% to 5.90%. The state charges a 4.88% state sales tax rate – the combined state and local sales tax rate averages 7.62%. The effective property tax rate is 0.67% on owner-occupied housing value, and there are no inheritance or estate taxes.

Miscellaneous Costs

Average Miscellaneous Costs in New Mexico per year: $24,349

Once the necessities are taken care of, you’ll want to get out and enjoy the Land of Enchantment. While many outdoor activities and scenery-gazing opportunities are free, here are typical costs for fun activities you might spend your discretionary dollars on.

•  Albuquerque Hot Air Balloon Ride: From $189 per adult

•  Sandia Peak Tramway: $34 for adults, $29 for young adults, $24 for children

•  White Sands National Park: $25 per vehicle general pass

•  Santa Fe Historical Walking Tour: From $130 per adult

•  Santa Fe Canyon Road Art and History Walking Tour: From $70 per adult

How Much Money Do You Need to Live Comfortably in New Mexico?

U.S. News and World Report ranks New Mexico as the 13th most affordable state, but every household, whether it’s just one person or a large family, has a different definition of what “comfortably” is. That said, according to MIT’s Living Wage Calculator, a living wage for a single person with no children in New Mexico is $21.01 per hour, assuming that they’re working full time. That wage translates to $43,700.80 per year. You may need to make a bit more than that to live comfortably, however you define that, but knowing that number can help you gauge what will work for you. Just bear in mind that, with its low cost of living, New Mexico does offer the chance to live comfortably on less money than you might need in pricier states like California or Hawaii.

Recommended: Best Affordable Places in the U.S.

What City Has the Lowest Cost of Living in New Mexico?

With a COLI of 89.7, Las Cruces, New Mexico, offers low costs but also has a lot more to recommend it. Home to New Mexico State University, the “City of Crosses” strives to be a cultural crossroads, with a vibrant arts scene that celebrates its multiple heritages. The major employer is the federal government, thanks to the White Sands Testing Facility, where NASA tests rocket engines. In contrast to that high-tech installment, the city also enjoys the age-old beauty of the Chihuahuan Desert and the nearby Organ Mountains.

Helpful Resources for Future New Mexico Residents