Cost of Living in New Mexico
Things cost about ▼ 8% less in New Mexico than the national average.
What Things Cost in New Mexico
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
New Mexico is one of the most affordable states in the West, with a cost of living about 10% below the national average and housing roughly 19% below. Albuquerque, the largest city, offers a distinctive Southwestern lifestyle at a price point that is a fraction of Phoenix, Denver, or Salt Lake City. Santa Fe is the exception: a renowned arts destination with housing costs well above the state average. The state has leveraged its national laboratories (Los Alamos, Sandia) and growing film industry to diversify beyond its traditional resource economy, though economic opportunity remains more limited than in faster-growing Western states.
New Mexico at a Glance
Taxes in New Mexico
New Mexico's state income tax tops out at Up to 5.9%. The combined sales tax averages 5%. Property taxes run about 0.67% of home value, which on a $260,000 median home means roughly $1,742/year.
Cities in New Mexico
Ranked from least to most expensive. Index 100 = national average.
Explore New Mexico
FAQ About New Mexico
Yes. New Mexico is about 10% below the national average for cost of living. Albuquerque has median home prices around $324,600 and offers a full metro experience at roughly two-thirds the cost of Denver or Phoenix. Las Cruces and smaller cities are even more affordable. Santa Fe is the notable exception, with housing costs well above the state and national averages.
By New Mexico standards, yes. Santa Fe's median home price exceeds $260,000, driven by its status as an arts destination and second-home market. However, by coastal or major-metro standards, Santa Fe is moderate. The city offers a unique cultural experience with world-class galleries, restaurants, and the Santa Fe Opera. The cost gap between Santa Fe and Albuquerque (about 90 minutes south) is significant.
New Mexico is increasingly retirement-friendly. Social Security benefits are exempt from state tax. The state offers exemptions for other retirement income as well, with the thresholds being expanded in recent years. Property taxes are low at about 0.67%, and the overall cost of living allows retirement savings to stretch further than in most Western states.