Alabama's cost of living index is 86 — 14.0% below the US average of 100 (MERIC (C2ER index), Second Quarter 2026). The index averages the cities that take part in the survey, so it describes those areas rather than the whole state. Compare purchasing power and equivalent salaries across states.
CoL Index
86.0
US avg = 100 · MERIC (C2ER index), Second Quarter 2026
vs. National Avg
-14.0%
Less expensive
Median Income
$66,659
Median household · Census ACS 2024 1-year
Equiv. at US Avg
$77,510
Same purchasing power
| CoL Index | 86.0 | MERIC (C2ER index), Second Quarter 2026 — composite, US avg = 100 |
| vs. National | 14.0% | Below average cost |
| Median Household Income | $66,659 | Alabama median — Census ACS 2024 1-year |
| National Purchasing Power | $77,510 | Equivalent $ at US avg CoL |
| Overall Category | Low | CalcHub band of the index: Low < 90 ≤ Moderate < 100 ≤ High < 115 ≤ Very High |
| Population | 5,193,088 | Census Bureau estimate, July 1, 2025 |
With a cost of living index of 86, Alabama is 14% below the national average. Lower costs in Alabama mean your dollar goes further. A salary of $66,659 in Alabama provides the equivalent purchasing power of $77,510 in a state at the national average.
Housing is typically the largest driver of cost of living differences between states.Alabama's typical home value of $241,600 is well below the U.S. typical value of $368,700 (Zillow Home Value Index, August 2026). Other factors include state income tax (5% top rate in Alabama), sales tax (4% state rate), and property taxes (0.38% effective rate).
