5 Cities Where the Cost of Living Could Rise Dramatically in 2025
In many parts of the United States, living costs have risen dramatically. Much of this is due to rising home prices for purchases and rentals.
As of August 2024, the median home value was $361,282. On average, renting an 899-square-foot apartment costs more than $1,700.
Some states, like Hawaii and Alaska, are much more expensive than others. Generally speaking, the cheapest places are those in the South and Midwest, while the West Coast and Northeast are the most expensive.
While there's no surefire way to know where the cost of living could rise dramatically in 2025 and beyond, some financial and real estate experts have their predictions. These are the big ones.
Here's what each state's cost of living looks like.
Dallas
Daniel Cabrera, a real estate agent and founder of Sell My House Fast SA TX, believes Dallas's cost of living will rise dramatically.
"I've seen housing costs in North Dallas neighborhoods rise over 60% in less than three years due to job growth and development," he said.
He said the main reason is that Dallas is a tech hub with significant infrastructure investments. These investments attract skilled workers and businesses alike, limiting the housing supply. As supply and demand dictate, this means higher prices, which can also impact property taxes and rents.
According to Zillow, Dallas's median home sales price is $313,158, up just 0.6 percent from a year ago.
Miami
Miami is another city where the cost of living has risen and is expected to continue to rise. Dennis Cherchikov, a professor of economics at the City University of New York, a real estate specialist, and the head of growth at GoSummer, offered several reasons.
"Miami's appeal as a coastal city with no state income tax, combined with its growing reputation as a financial and technology hub, puts it in a position to see a significant increase in the cost of living," he said.
We've also seen an increase in home buyers, pushing up property prices.
But another major consideration is the threat of climate change, he said. Because of the environment and natural disasters in the region, taxes and insurance premiums are likely to continue to rise.
The median home value in Miami is $580,297. That's up 7.5 percent from last year.
Parts of Northwest Arkansas
Garrett Hamm, CEO of Weekender Management in Arkansas, expects the cost of living to continue rising.
"The limited supply of housing versus the growing demand is driving up the overall cost of living," he said. "I've seen that happen in Northwest Arkansas, where I work."
While he didn't specify which cities those might be, he said any second-tier cities where major investments in infrastructure, arts, and culture are planned could see significant price increases.
"I'll be watching cities lining up public-private partnerships to accelerate growth," he said. "Real estate is still deeply cyclical, but overall, it follows jobs."
Atlanta
Martin Orefice, CEO of Rent to Own Atlanta, predicted Atlanta would become significantly more expensive shortly.
"Minneapolis, Minn., and Atlanta, Ga., don't seem to have much in common, but they do have one thing in common: a lot of new construction," he said. "That has the effect of helping to lower rents and housing costs, giving people more spending money to cover their expenses."
The typical home value in Atlanta is $395,201. In Minneapolis, it's $324,256.
Austin, Texas
The typical home value in Austin is $527,213, down 4.9% from last year. However, other costs—like apartment rents—remain high.
"Austin's cost of living has been skyrocketing, and I expect the cost of living to continue to rise in 2025," Shershikov said. "The city's booming tech industry has … attracted a huge influx of new residents."
More people mean more demand and competition for housing and other local resources, which allows businesses and homeowners to raise their prices.
Bottom line
Anything can happen to the housing market, so research before choosing a place to live. If you already live in an area with high costs or want to move to one of the places on this list, be prepared financially. Even if you're overprepared — or if prices don't rise as dramatically as these experts predict — you'll be better off.
Post a Comment