Cost of Living in Chicago, IL
By Space Coast Daily // September 3, 2024
The cost of living in Chicago, IL, is notably higher than both the state and national averages, driven primarily by housing, transportation, and general goods and services.
On average, the cost of living in Chicago is 14% higher than the U.S. average, with housing costs standing out as particularly expensive. The average rent in the city is around $2,994 per month for a two-bedroom apartment, which is more than double the national average.
This makes Chicago one of the more expensive cities in the country when it comes to housing, contributing significantly to the overall cost of living.
Additionally, the median home price in Chicago is higher than in many other U.S. cities, further adding to the financial burden for residents considering homeownership.
Beyond housing, other factors such as food, utilities, and transportation also contribute to the elevated cost of living in Chicago.
For instance, grocery prices are slightly above the national average, with everyday items like milk costing around $3.96 per gallon and a dozen eggs priced at about $3.99.
Utilities are relatively affordable, with the average monthly cost for basic services like electricity, heating, and water being approximately $165 for a typical apartment.
Transportation costs, however, are significantly higher, with gasoline prices averaging $4.18 per gallon and public transit options like the CTA being widely used despite their costs. This combination of factors makes Chicago a vibrant but expensive place to live, requiring careful financial planning.
Housing Costs in Chicago
The housing market in Chicago, IL, has experienced notable fluctuations in 2024, with home prices continuing to rise despite a decline in sales volume. As of mid-2024, the median home price in the city reached $379,925, reflecting a 6.3% increase from the previous year.
This growth has been driven by a persistent demand for housing, even as the number of homes sold has decreased significantly due to limited inventory.
In June 2024 alone, home sales dropped by 15% compared to the previous year, with only 2,235 homes sold, highlighting the challenges faced by buyers in a competitive market with fewer available properties.
In terms of rental costs, the average monthly rent in Chicago stands at approximately $2,349, a figure that underscores the city’s high cost of living. This rental rate is consistent with the broader trend of increasing housing costs in the city, making it one of the more expensive urban areas in the United States.
The ongoing rise in home prices, coupled with steady demand, suggests that both buyers and renters in Chicago are facing significant financial pressures, with housing affordability becoming an increasingly critical issue.
Utilities and Basic Services
In Chicago, the cost of utilities and basic services is a significant consideration for residents, whether renting or owning a home. On average, Chicagoans spend around $132 per month on utilities, which include gas, electricity, water, and garbage pickup.
This is approximately 7% less expensive than the national average, making it relatively affordable compared to other major cities. Electricity is typically the most expensive utility, costing about $158 per month, especially during the warmer months when air conditioning usage increases.
Gas bills fluctuate seasonally, averaging around $100 per month, with higher costs in winter. Internet services add another $61 to the monthly expenses, slightly above the national average due to local taxes.
Beyond the basic utility costs, Chicago residents should also budget for other services. For example, renters often face additional charges for parking, which can range from $150 to $300 per month depending on location and type of parking.
Renters insurance, while not mandatory, is advisable and typically costs about $10 per month. Additionally, those with pets might incur extra fees ranging from $30 to $60 per month or a one-time payment of $300 to $600.
Understanding and budgeting for these expenses is crucial for maintaining a stable financial situation while living in Chicago.
Transportation
Transportation in Chicago, IL, is characterized by a mix of public transit options and driving, each with its costs and conveniences.
The Chicago Transit Authority (CTA) operates the city’s extensive network of buses and trains, which is a lifeline for many residents. The cost for a single ride on the CTA is $2.50, and a monthly pass can range from $75 to $115 depending on the service chosen.
Public transportation is widely used, with over 30% of Chicagoans relying on it for their daily commute. This system covers a vast area, making it accessible for most residents, especially those living in the city center.
Additionally, the Ventra Card system allows for easy, contactless payments across all public transit options, making commuting more convenient for daily users.
For those who prefer driving, transportation costs can be significantly higher. Gasoline prices in Chicago average around $4.18 per gallon, which is above the national average.
Car owners also face high parking fees, which can range from $150 to $300 per month depending on the location. Additionally, the annual Chicago City Vehicle Sticker required for all car owners, costs between $90.88 and $144.33.
Food and Groceries
The cost of food and groceries in Chicago, IL, reflects the city’s overall high cost of living, with prices for essential items continuing to rise. As of 2024, the average cost of a gallon of milk in Chicago is around $3.96, while a dozen eggs can set you back approximately $3.99.
Meat prices are also on the higher end, with chicken fillets averaging $6.33 per pound and beef rounds costing about $9.34 per pound.
These prices are reflective of broader national trends, where grocery prices have risen significantly over the past few years due to various factors, including supply chain disruptions and increased production costs.
Despite some stabilization in grocery price inflation, Chicago residents still face high costs at the grocery store. For example, a loaf of fresh white bread costs about $3.77, and a pound of local cheese averages $7.22.
Fresh produce is similarly priced, with a pound of apples costing around $2.60 and a pound of tomatoes at $2.29. These elevated prices make budgeting for food a critical concern for many Chicagoans, particularly as other living expenses in the city remain high.
Healthcare Expenses
Healthcare expenses in Chicago, IL, can vary significantly depending on the type of health insurance plan you choose and your healthcare needs.
For 2024, the average monthly premium for health insurance in Chicago is around $402 for a Silver plan, with an average maximum out-of-pocket cost (MOOP) of approximately $4,542.
These figures are based on plans offered by providers like Ambetter, which is known for offering the most affordable premiums in the city.
However, while Ambetter offers lower premiums, it has a relatively high rate of claim denials, so it’s important to carefully consider coverage details and customer service ratings when choosing a plan.
Another popular option, Oscar Health, offers slightly higher premiums but is noted for its lower claim denial rate, making it easier for customers to access care when needed.
For those planning for long-term healthcare needs, such as in retirement, it’s crucial to account for rising healthcare costs.
Recent estimates suggest that healthcare inflation continues to outpace general inflation, meaning that even with insurance, out-of-pocket expenses can add up quickly.
For example, Fidelity’s 2024 Retiree Health Care Cost Estimate indicates that the average 65-year-old retiree might spend around $165,000 on healthcare throughout retirement.
This highlights the importance of not only selecting the right insurance plan but also planning with tools like Health Savings Accounts (HSAs) to cover future medical expenses.
Income and Salaries in Chicago
Healthcare expenses in Chicago, IL, can vary significantly depending on the type of health insurance plan you choose and your healthcare needs.
For 2024, the average monthly premium for health insurance in Chicago is around $402 for a Silver plan, with an average maximum out-of-pocket cost (MOOP) of approximately $4,542. These figures are based on plans offered by providers like Ambetter, which is known for offering the most affordable premiums in the city.
However, while Ambetter offers lower premiums, it has a relatively high rate of claim denials, so it’s important to carefully consider coverage details and customer service ratings when choosing a plan.
Another popular option, Oscar Health, offers slightly higher premiums but is noted for its lower claim denial rate, making it easier for customers to access care when needed.
For those planning for long-term healthcare needs, such as in retirement, it’s crucial to account for rising healthcare costs.
Recent estimates suggest that healthcare inflation continues to outpace general inflation, meaning that even with insurance, out-of-pocket expenses can add up quickly. For example, Fidelity’s 2024 Retiree Health Care Cost Estimate indicates that the average 65-year-old retiree might spend around $165,000 on healthcare throughout retirement.
This highlights the importance of not only selecting the right insurance plan but also planning with tools like Health Savings Accounts (HSAs) to cover future medical expenses.
Rent vs. Buy: Making the Decision in Chicago
Deciding whether to rent or buy in Chicago, IL, in 2024 involves weighing several financial and lifestyle factors.
The median rent for an apartment in Chicago currently averages around $2,150 per month, with prices varying significantly depending on the size and location of the unit. In contrast, the median home price in downtown Chicago is about $390,000.
When comparing the cost of renting versus buying, one key consideration is the upfront expenses associated with purchasing a home, such as down payments, closing costs, and ongoing maintenance.
However, buying a home can be a good long-term investment, particularly in neighborhoods where property values are expected to appreciate.
Chicago is also ranked as one of the top cities in the U.S. where buying a home can be more advantageous than renting.
With a price-to-rent ratio of 12, it generally makes more financial sense to buy rather than rent, especially if you plan to stay in the same location for several years.
The average monthly mortgage payment in Chicago, at current interest rates, is approximately $1,828, which is slightly less than the average rent.
However, the decision to buy or rent should also take into account personal factors, such as your financial stability, how long you plan to live in the area, and whether you value the flexibility that renting provides.
Given these expenses, if you’re planning on moving to Chicago, it might be wise to hire a moving company.
Collins Family Movers in Chicago can help transport your belongings efficiently, and their familiarity with the city can make your relocation smoother. Moving companies can also offer valuable advice on navigating the city’s transportation options once you’re settled.
