Aerial view of Annapolis state house, Maryland.

Cost Of Living In Maryland: Baltimore And Beyond

Sean Bryant8-Minute Read
October 19, 2021

If you’ve ever thought about packing up and moving yourself to Maryland, be forewarned that the Old Line State isn’t going to be the friendliest state to your wallet. However, even with the higher cost of living in Maryland, this is still your typical east coast state filled with charm and some of the best seafood around.

Before we start looking into the cost of living in Maryland and some of its most popular cities, let’s take some time to look at what “cost of living” actually means.

‘Cost Of Living’ Defined

When you think of the term “cost of living,” you probably think about how expensive certain things are in a particular area. While this is true, it’s only half of the story. In addition to looking at how much living expenses like housing, transportation, food, and entertainment would be, cost of living also considers the average incomes for the area. All of these numbers are used to calculate the cost of living.

One thing to keep in mind is that just because certain expenses might cost a lot compared to other parts of the country, it doesn’t mean there’s a high cost of living. Average household incomes might also be quite a bit higher as well.

To help easily understand how much it takes to live in a certain area, the cost of living index was developed. This was put together to help people compare the cost of living in a major city to that over other metropolitan areas. This is useful for people who might be looking to relocate for new job opportunities since it will help them understand how affordable things might be if they decide to move.

When calculating the cost of living index, the following items are considered: 

  • Housing
  • Groceries
  • Health care
  • Childcare
  • Taxes
  • Education
  • Transportation
  • Utilities
  • Clothing
  • Household supplies

Average Cost Of Living In Maryland

When putting together a cost of living index, there’s a baseline number of 100. If a city is higher than 100, then its cost of living is greater than the national average. If they’re below, then they have a lower cost of living than the average.

The average cost of living in Maryland is 113, according to Best Places, which means it’s significantly more expensive than the average U.S. city. Here are how different pieces of the overall cost of living index stack up against other parts of the country.

  • Median home price – $294,100 (National average is $231,000)
  • Median household income – $74,149
  • Housing – 127.2
  • Groceries – 105.2
  • Health care – 89.1
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $15,461 (national average is $12,383)
  • Transportation – 119.3
  • Utilities – 105.6
  • Miscellaneous – 104.9

Cost Of Living In Maryland By City

The cost of living in Maryland can fluctuate quite a bit from city to city. As you get closer to Washington D.C. and the suburbs, the cost of living increases dramatically. A lot of this is driven by the high price of real estate in the area. If you’re planning a move to Maryland, make sure you check out the top real estate cities in Maryland.

Baltimore

Baltimore is the most populated city in Maryland with an overall cost of living rating of 88.2. It’s full of rich history that can be felt throughout the city. Fort McHenry, which is at the mouth of the Baltimore Inner Harbor, inspired the creation of “The Star Spangled Banner” after the War of 1812.

  • Median home price – $114,300 (National average is $231,000)
  • Median household income – $41,819
  • Housing – 49.4
  • Groceries – 98
  • Health care – 89.6
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $16,838 (national average is $12,383)
  • Transportation – 124.4
  • Utilities – 107.3
  • Miscellaneous – 97.6

Baltimore Real Estate Listings

Baltimore Trend Report

Ocean City

Ocean City is a quaint little town with miles of white sandy beaches and boardwalks. With over 200 restaurants you’re almost guaranteed to find some of the freshest seafood around. The best part is that Ocean City is relatively affordable by Maryland standards. With a cost of living index of 104.8, it’s just slightly above the national average.

  • Median home price – $267,600 (National average is $231,000)
  • Median household income – $56,458
  • Housing – 115.7
  • Groceries – 107.2
  • Health care – 118.9
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $16,831 (national average is $12,383)
  • Transportation – 81
  • Utilities – 104.6
  • Miscellaneous – 103.1

Ocean City Real Estate Listings

Ocean City Trend Report

Columbia

Located between Washington D.C. and Baltimore, Columbia is one of Maryland’s most populated cities. Columbia isn’t your typical East Coast city with centuries worth of history. Instead, it was a planned community constructed in the 1960s. Don’t let that fool you, though, because Columbia is a constant on Money Magazines best places to live, coming in at number one in 2016. Columbia does have a fairly high cost of living with an index score of 121.6 and average home prices north of $400,000.

  • Median home price – (National average is $231,000)
  • Median household income – $100,252
  • Housing – 151
  • Groceries – 104.5
  • Health care – 92.2
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $17,082 (national average is $12,383)
  • Transportation – 107.9
  • Utilities – 109.7
  • Miscellaneous – 118.8 

Columbia Real Estate Listings

Columbia Trend Report

Frederick

Located less than an hour from both Baltimore and Washington D.C., Frederick has it all. You can hike the Appalachian Trail, tour a Civil War battlefield and then make it into the city for a baseball game all in one day. Because of its further proximity to Baltimore and Washington D.C., Frederick has a lower cost of living with an index score of 107.6.

  • Median home price – $283,800 (National average is $231,000)
  • Median household income – $65,967
  • Housing – 122.8
  • Groceries – 107.4
  • Health care – 89.9
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $13,827 (national average is $12,383)
  • Transportation – 98.1
  • Utilities – 97
  • Miscellaneous – 107.3

Frederick Real Estate Listings

Frederick Trend Report

Gaithersburg

If you want to stay close to the hustle and bustle of Washington D.C. but still want a slower pace of life, Gaithersburg is the place to be. While it has a higher cost of living of 125.9, there is plenty to do. Gaithersburg offers many different museums and galleries as well as acres upon acres of parks. Plus, you can make your way to the neighboring Germantown and visit Butler’s Orchard. 

  • Median home price – $366,600 (National average is $231,000)
  • Median household income – $78,441
  • Housing – 158.6
  • Groceries – 111.5
  • Health care – 92.6
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $16,548 (national average is $12,383)
  • Transportation – 136.1
  • Utilities – 106.3
  • Miscellaneous –- 99.5

Gaithersburg Real Estate Listings

Gaithersburg Trend Report

Annapolis

Located on the Chesapeake Bay, Maryland’s capital city, Annapolis impresses with four century old architecture while still giving off a 21st century vibe. Like many other cities in Maryland, Annapolis has a higher cost of living. Its score of 125.6 puts it quite a bit above the state’s average.  

  • Median home price – $417,000 (National average is $231,000)
  • Median household income – $75,320
  • Housing – 180.4
  • Groceries – 105.9
  • Health care – 87.6
  • Taxes – State sales tax is 6.0%; individual income tax rates range from 2.0% to 5.75%
  • Education – School expenditures per student is $14,810 (national average is $12,383)
  • Transportation – 95.3
  • Utilities – 106.3
  • Miscellaneous – 109.8

Annapolis Real Estate Listings

Annapolis Trend Report

The Bottom Line On Maryland Cost Of Living

Maryland is full of rich history and plenty of things to do. However, it comes at a cost with a higher than average cost of living. But if you talk to any longtime resident, most will tell you the cost is well worth the reward. If you’ve been thinking about buying a house in Maryland, make sure to work with a Rocket Homes® Verified Partner Agent.

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Sean Bryant

Sean Bryant is a Denver based freelance writer specializing in travel, credit cards, and personal finance. With more than 10 years of writing experience, his work has appeared in many of the industries’ top publications.