Nowadays, everything seems expensive. Costs have been rising in housing, healthcare, education, food, and almost every industry and all around the country (and the world) now for the last few decades and consumers are starting to get tired of it. Still, when it comes to the cost of living in the United States, not all states are created equal. While some places offer affordable housing, low taxes, and a comfortable lifestyle, others can quickly drain your wallet faster than you can say “double-shot, oat milk, sugar-free vanilla latte.” So, what is the most expensive state to live in? Drumroll, please… it’s Hawaii!
While Hawaii is often billed as a veritable paradise on TV and in movies, there can be downsides to living the the beautiful Aloha State. One of are the high costs and taxes that make Hawaii the most expensive state to live in the United States of America.
Why Hawaii Is the Most Expensive State to Live In
Living in Hawaii sounds like a dream – endless beaches, perfect sunsets, and the “aloha” spirit. But, paradise comes at a premium. Here’s why Hawaii tops the charts:
1. Isolation and Shipping Costs
Hawaii is roughly 2,400 miles from the U.S. mainland, meaning almost everything must be shipped by boat or plane. Groceries, building materials, fuel – you name it – all come with massive transportation costs that businesses pass along to consumers. The annexation of Hawaii by the United States led to the decimation of local traditional farming and agriculture in favor of allocating land and contracts to mainland U.S. corporations. This caused Hawaii to be even more dependent on expensive imports instead of being able to rely on domestic food production in the state.
For example, a gallon of milk can easily cost $6 or more, and don’t even ask about cereal.
2. Housing Shortage and Sky-High Real Estate
Limited land, zoning restrictions, and high demand mean that real estate is shockingly expensive. According to Zillow, as of 2025, the median home price in Hawaii hovers around $825,000 – and that’s for a modest home.
Renters aren’t spared either. A one-bedroom apartment in Honolulu can cost $2,000–$2,500 a month, which is about the same as renting a luxury condo in many mainland cities. With a lack of affordable housing in the state and no major plans to fix the issue in the works, those who live in the state can expect to spend a significant portion of their income a month on rent.
3. High Cost of Utilities
Utilities are notably pricier in Hawaii due to its reliance on imported oil for power generation. Energy bills, water, and even internet costs are considerably higher compared to the national average. Additionally, natural disasters in the state can considerably contribute to the high utility and insurance rates in the state.
4. Food and Grocery Expenses
Fresh produce, dairy, meat, and other essentials are pricey because of the transportation costs and limited local agriculture. A basic grocery run can easily cost 30–50% more than on the mainland.
Hawaii’s Cost of Living and Tax Burden
Cost of Living Index
Hawaii’s overall cost of living index sits at over 190 (where the national average is 100). That means it’s nearly double the cost to live in Hawaii compared to the rest of the United States.
Here’s a breakdown:
- Groceries: 150–170% of the national average
- Housing: 250–300% of the national average
- Utilities: 180–200% of the national average
- Transportation: 120–140% of the national average
- Healthcare: 110–120% of the national average
Taxes
Hawaii isn’t exactly a low-tax haven, either:
- State Income Tax: Up to 11% (one of the highest top brackets in the U.S.)
- General Excise Tax (GET): About 4% statewide but applies to almost everything you buy, and effectively drives prices up more than a traditional sales tax would.
- Property Taxes: Surprisingly low in rate (~0.35%), but given the astronomical home values, dollar amounts can still be hefty.
Pros and Cons of Living in Hawaii
So, is living in paradise worth the price? Let’s break it down:
Pros
- Unparalleled Natural Beauty: Beaches, mountains, volcanoes – you name it.
- Laid-Back Lifestyle: The “aloha spirit” promotes a slower, more connected way of living.
- Mild Climate Year-Round: Expect sunshine and pleasant temperatures most days.
- Diverse Culture: A rich mix of Native Hawaiian, Asian, and Western cultures.
- Outdoor Activities Galore: Surfing, hiking, snorkeling, and whale watching are just part of daily life.
Cons
- Astronomical Cost of Living: From groceries to housing, everything costs more.
- Limited Job Market: Unless you work in tourism, government, or healthcare, finding a well-paying job can be tricky.
- Island Fever: Some residents find island living isolating after a while.
- Traffic: Believe it or not, Honolulu has some of the worst traffic in the country.
- Higher Risk for Natural Disasters: Hurricanes, tsunamis, and volcanic eruptions are real risks.
Is Living in Hawaii Worth It?
For some, absolutely. If you value natural beauty, a relaxed pace of life, and warm weather year-round – and you can afford it – Hawaii can be a true paradise.
But if budget constraints are a major factor, or you prioritize career opportunities in fast-growing industries, you might find the financial burden overwhelming.
Many residents adopt a “small is beautiful” mentality: living in smaller spaces, embracing minimalist lifestyles, and focusing more on community and experiences rather than possessions. (Which isn’t such a bad trade-off when you can walk out your door and surf world-class waves before breakfast.)
If you’re planning a move to Hawaii, be prepared to budget carefully, simplify your lifestyle, learn the local culture, and embrace the spirit of aloha – both in attitude and in bank account flexibility.
Or, you know, maybe just visit for a week… your wallet will thank you.