When you’re moving to a state that was once known for selling the most expensive McDonald’s Quarter Pounder with Cheese in the U.S., it’s only natural that you’d wonder about the overall cost of living in Alaska. The 49th state has long occupied a top slot in the most expensive states to live in. By USA Today‘s estimates, Alaska ranks as the fourth-most expensive state, just behind New York, Washington DC, and Hawaii.i 

costs of a 1/4lb burger with cheese

However, we have some good news: Seattle, San Francisco, and Manhattan have since dethroned Alaska in the race for the most expensive Quarter Pounder with Cheese.  

Plus, since Alaska residents enjoy a yearly Permanent Fund Dividend that can help offset the cost of living, it might be the perfect time to move to Alaska. That being said, everyone’s finances are different. We’ll take you on a tour of several common categories of expenses so you can judge for yourself whether it’s time for you to make the Frontier State your home. 

Looking at the Whole Picture: The Overall Cost of Living in Alaska 

To give you a sense of the overarching cost of living in Alaska, let’s start with some broad numbers.  

Payscale.com estimates that the cost of living in Fairbanks is about 33% higher than the national average. That being said, the cost of living in Portland, Oregon is 29% higher than the national average. (Pretty similar!) Plus, the cost of living in Los Angeles is 43% higher than the national average, so it’s about 9.3% cheaper to live in Fairbanks.ii  

The Cost of Living in Fairbanks Is… 

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higher than the national average
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more expensive than Portland, OR
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cheaper than Los Angeles, CA

In comparison, living Anchorage is 28% higher than the national average, according to Payscale.com. That puts it nearly on par with living in Portland, Oregon and 12% cheaper than living in Los Angeles.iii 

The Cost of Living in Anchorage Is… 

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higher than the national average
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more expensive than Portland, OR
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cheaper than Los Angeles, CA

That said, if you’re currently living in an area where the cost of living is relatively low, moving to Alaska may be a shock to your wallet. However, if your current home is already a bit expensive—such as an urban area of the U.S.—you might find the prices in Alaska fairly comparable. Let’s break it down a bit more. 

Finding Your Home: The Cost of Housing in Alaska 

As the largest monthly expense for most Americans, housing costs contribute significantly to the overall cost of living in Alaska. 

If you’re looking to buy, the typical home value of homes in Alaska is $310,373 according to Zillow, which is actually 1% lower than the national typical home value of $312,728.iv  However, there can be significant deviation, depending on where in Alaska you decide to live: 

Typical Home Values, According to Zillow v 

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Anchorage
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Fairbanks
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Juneau

In other words, housing prices vary around the state. If you’re flexible in terms of your destination, you can likely find something within your budget.  

If you prefer to rent, know that prices increased 2% overall in between 2020 and 2021.vi Rental prices, like home purchase prices, will depend on where you decide to rent. They’ll also vary based on what kind of apartment you choose. The Department of Labor and Workforce Development estimates the average overall apartment average rent in Anchorage at $1,172 and $1,246 in Fairbanks.vii Keep in mind: The national average for all size units sits at $1,124.viii 

Median Rents in Alaska ix 

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Anchorage
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Fairbanks
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Juneau
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Kodiak
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Wrangell-Petersburg

With housing prices higher than the national average, you might expect that it will cost a fortune to heat and light your home, especially during those cold and dark Alaskan winters. However, we think you’ll be pleasantly surprised by this next section. 

Heating and Lighting Your Home: The Cost of Utilities in Alaska 

The U.S. Energy Information Administration reported that the average monthly electric bill for Alaska residents is $124.66/month. Although that’s higher than the national average of $117.46/month, it’s still less than you’d see in South Carolina, Alabama, or Connecticut. It’s also right on par with Florida, Georgia and New Hampshire.

Average Monthly Electric Bills xi 

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Alaska
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Connecticut
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Florida
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New Hampshire
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South Carolina

In other words, electricity is one of the few costs of living factors that puts Alaska on par with many other states. 

That being said, it can still get pricey to keep your house warm. So what do most Alaskans do? They get creative! Many homes in Alaska have a few sources for heat in the winter: electricity, fuel oil, natural gas (where available), and wood. Most people switch up their heating methods depending on current cost and outside temperatures. 

Winter, an ax with logs of firewood, harvesting firewood in northern Alaska

In general, those who are fortunate enough to have access to natural gas will find it cheaper to keep their homes warm. Fuel oil is a pricier option, especially if you live far from one of Alaska’s city centers, where the cost per gallon can double or triple. 

As you plan your move, make sure to include a cushion for winter utilities. They’ll vary greatly, depending on the size of your home and its insulation against the elements. Once you lock down a warm place to live, your next order of business will be securing the next essential: food. 

Fueling Your Adventures: The Cost of Groceries in Alaska 

If you don’t plan on subsisting on Quarter Pounders with Cheese, you’ll find yourself shopping for food sooner than later. Since everything has to be shipped in, you’ll find that groceries are more expensive in Alaska than the lower 48. In fact, the Missouri Economic Research and Information Center ranks Alaska as the state with the second-most expensive groceries in the nation. (Hawaii takes the #1 spot!)xii  

To give you some sense of the prices you’ll see, we’ve put together a chart of four essentials comparing Anchorage prices with two other American cities: 

Walmart Grocery Price Comparison xiii 

Grocery cost chart

As with housing prices, the cost of groceries can vary significantly, based on where you make your home. Data from the Cooperative Extension Service at the University of Alaska Fairbanks highlights these differences. In Anchorage, groceries for a family of four with two children, ages 6 and 11, cost $211. That’s $5 more than Fairbanks, $63 less than Sitka, and $185 less than Bethel..xiv    

Average Monthly Electric Bills xi 

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Anchorage
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Bethel
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Fairbanks
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Sitka

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