Cost of Living in Iowa
Things cost about ▼ 12% less in Iowa than the national average.
What Things Cost in Iowa
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Iowa is quietly one of the best values in the country for cost of living. Housing runs about 28% below the national average, and the median home price of roughly $188,000 puts homeownership within reach for single-income households. Des Moines has been recognized repeatedly as one of the best mid-size cities for young professionals, offering a growing insurance and financial services sector, a surprisingly strong food and arts scene, and neighborhoods where a starter home costs under $200,000. Iowa recently simplified its tax code with a flat 3.8% income tax, making it more competitive with neighboring states.
Iowa at a Glance
Taxes in Iowa
Iowa's state income tax tops out at 3.8% flat. The combined sales tax averages 6%. Property taxes run about 1.43% of home value, which on a $188,000 median home means roughly $2,688/year.
Cities in Iowa
Ranked from least to most expensive. Index 100 = national average.
Explore Iowa
FAQ About Iowa
Yes. Iowa is about 10% below the national average for cost of living, with housing being the standout bargain at roughly 28% below average. The median home price of about $188,000 is less than half the national figure. A household earning $60,000 in Iowa has purchasing power comparable to roughly $67,000 in an average-cost state.
Des Moines has been named one of the best places for young professionals and families by multiple publications. The insurance and financial services industry provides a strong job base. Housing is affordable, the East Village and downtown have grown into vibrant neighborhoods, and the metro offers the amenities of a city of 700,000 with a lower cost of living. It is not a coastal city, and winters are harsh, but the value proposition is genuine.
Iowa now has a flat 3.8% income tax rate, a significant reduction from the previous graduated system that topped out at 8.53%. This change makes Iowa one of the more tax-friendly states in the Midwest. Social Security benefits are exempt from state tax.