It’s a question more Americans are asking: Is it expensive to live in Michigan? Specifically, many are scrutinizing the Detroit cost of living as inflation, real estate shifts, and urban migration reshape how people choose where to live.
Once a symbol of American industrial might, Detroit, Michigan, has been undergoing a quiet transformation. Its cost of living, compared to major metropolitan areas like New York, Los Angeles, and Chicago, paints a compelling economic picture for anyone considering relocation, investment, or simply wanting to understand where their dollar stretches furthest.
Below, we’ve unpacked the cost of living in Detroit and compared it with six other major U.S. cities. From housing and transportation to groceries and healthcare, these comparisons offer a clear view of how far your money can go in the Motor City.
Cost of Living in Detroit, Michigan at a Glance
Breakdown of Daily Expenses in Detroit
Living in Detroit, Michigan, offers affordability across a range of categories, especially when compared to coastal urban centers.
According to the Detroit Data Center, the average salary in the city stands at $70,471, aligning closely with other major cities, while housing costs remain strikingly low. A home in Detroit typically costs between $95,000 and $109,000, and the average rent in Detroit, Michigan, is approximately $1,097 per month, which is significantly lower than the national urban average.
Public transit is accessible and largely fare-free via the Detroit People Mover and QLINE, with DDOT bus rides costing just $2 for a 4-hour pass.
Based on recent data, Michigan’s 6% sales tax and 4.25% average state income tax offer a moderate tax environment. Auto insurance averages $74+ per month.
For entertainment, a mid-range night out might run between $75 and $150 per person, including dinner and nightlife.
How the Cost of Living in Detroit, MI Compares Overall
When evaluating the cost of living in Detroit, MI, as a whole, the city offers an affordable alternative to pricier urban centers.
Key drivers, such as housing and transportation costs, are exceptionally low. While the unemployment rate sits at 5.1% — slightly higher than in some cities — the low entry costs for both renters and buyers offer strong incentives for those wondering where to live in Detroit.
For many, living in Detroit presents a high value-to-cost ratio.
New York City, NY vs. Cost of Living in Detroit, MI
What It Costs to Live in the Big Apple
New York City is among the most expensive urban centers in the United States. The U.S. Bureau of Labor Statistics puts the average salary at $80,324, which is higher than Detroit’s, but the cost of everything else tells a very different story.
The average home price is $785,000, and the average rent is a substantial $4,037 per month, according to the NYC Comptroller.
State income tax ranges from 4% to 10.9%, plus a city sales tax of 4.5% on top of a 4% state sales tax for most purchases over $110.
Getting around costs $2.90 for subway and standard bus fare, with express buses charging $7. Auto insurance is nearly double Detroit’s at $351 per month.
A night out in New York? Expect to spend anywhere from under $50 to more than $300, depending on your plans.
Conclusion: Comparing Detroit and New York
Detroit’s lower costs make it a financially strategic option. Though average salaries are nearly identical, Detroit’s housing and daily expenses are a fraction of New York’s.
From a budgetary perspective, the cost of living in Detroit offers more room for saving or investing.
Los Angeles, CA vs. Living in Detroit
West Coast Spending vs. Midwest Saving
Los Angeles dazzles with opportunity, but demands a high price. Per the U.S. Bureau of Labor Statistics, there’s a higher $76,211 average salary, yet that doesn’t necessarily translate to more disposable income.
Public transit costs are modest ($1.75 for standard Metro rides), but often less practical than driving, where auto insurance averages over $200 per month.
Homes average around $970,600 in Los Angeles, based on data from Zillow, while typical monthly rent stays near $2,874.
A moderate night out, including a meal and entertainment, usually costs around $200.
Detroit Cost of Living Advantage
Despite a lower average salary, Detroit residents face significantly lower housing, insurance, and tax costs.
For anyone evaluating whether Detroit living is financially viable, the answer is clear: the cost of living in Detroit, Michigan, makes it highly competitive when stacked against the West Coast.
Chicago, IL vs. Detroit Living
Windy City Expenses in Detail
Chicago presents a middle ground between coastal expense and Midwest affordability.
Residents earn an average of $71,593, based on data from the U.S. Bureau of Labor Statistics — close to Detroit’s average.
Based on insights from SoFi’s Chicago housing market report, homes cost roughly $350,000, while monthly rent is $1,957. The city levies a 10.25% sales tax, and the state income tax stands at 4.95%.
Transit fares are reasonable at $2.25 for bus rides and $2.50 for ‘L’ train service, while monthly auto insurance runs around $142, according to CBS News. Nightlife is lively but costly, averaging over $90 per night.
Final Thoughts on Chicago vs. Detroit
Detroit’s lower home and rental prices, coupled with a higher average salary and cheaper insurance, make it an attractive option.
The Detroit average salary offers more flexibility, thanks to the city’s relatively low cost of living — especially when compared to nearby metro areas.
While the city has long struggled with safety concerns, recent years have seen a notable drop in crime rates, bringing Detroit closer in line with national averages and making it increasingly appealing to others around the country.
Philadelphia, PA vs. Cost of Living in Detroit
East Coast Lifestyle, Midwest Comparison
Philadelphia combines urban convenience with relative affordability.
The average home costs $290,000, according to data from Redfin’s Philadelphia housing market report, and monthly rent is around $1,749. Residents earn an average of $69,617 and pay a 3.75% state income tax.
Public transit costs $2.90 per ride, with monthly passes at $116. Auto insurance averages $347 per month, while a typical night out costs $86.45.
Affordability Analysis: Detroit vs. Philly
Though Philadelphia offers reasonable costs for an East Coast city, it still can’t compete with the cost of living in Detroit, Michigan.
Lower housing, transportation, and insurance costs make Detroit a better value for the same quality of lifestyle.
Houston, TX vs. Detroit
Comparing Southern and Midwestern Budgets
Houston stands out with its absence of state income tax and a modest 6.25% sales tax. The average salary is $63,523, based on U.S. Department of Labor data.
Homes cost about $339,000, while the monthly rent is $1,198, as highlighted by Zumper’s rental report, which sits close to Detroit’s.
Public transit costs only $1.25 per ride, while car insurance averages around $239 a month, as estimated by MarketWatch.
A night out is quite expensive, ranging from $200 to $300 per person, making it a not-so-affordable option for entertainment seekers.
Living in Detroit, Michigan, Still Holds Its Own
While Houston wins on state taxes, Detroit remains competitive due to significantly lower housing prices and more affordable auto insurance.
Those considering where to live in Detroit should know the city stands tall, even among no-income-tax states, when factoring in other daily expenses.
Detroit Cost of Living Summary: Affordable, Livable, and Growing
Detroit’s story is no longer just one of economic recovery; it’s now one of financial opportunity — bolstered by a steady decline in crime rates.
The city offers affordable housing, accessible transportation, and a substantial average salary, all wrapped into a cost of living that ranks lower than many comparable U.S. cities.
For those asking, is it expensive to live in Michigan? The answer is increasingly “no.”
The Detroit cost of living gives residents more financial breathing room and the potential for a better quality of life. Whether you’re looking to invest, relocate, or rethink your budget, comparing these major metros shows how much ground Detroit has gained.
This article appears in Jul 23 – Aug 5, 2025.