Indiana is known for its affordable living, making it a popular choice for those seeking a balanced lifestyle with lower expenses. From its bustling cities like Indianapolis and Fort Wayne to its charming small towns, the state offers diverse living options that cater to various budgets. With housing costs significantly below the national average and everyday essentials like groceries and utilities remaining relatively affordable, Indiana provides financial breathing room for residents. In this Rent. article, we’ll explore the cost of living in Indiana, including housing prices, transportation, healthcare, and more.
Housing costs: Median home prices and average rent in Indiana
Indiana’s housing costs are a standout feature for affordability, with both rents and home prices significantly below national averages. The median home sale price in Indiana is $258,500—nearly $170,000 less than the national median of $428,000. Renters also benefit from this affordability, with the average rent in Indiana at $1,190 per month, compared to the national average of $1,645. Cities like Indianapolis and Bloomington tend to have slightly higher prices due to their amenities and job opportunities, while smaller towns and rural areas offer even more affordable options.
Indiana housing costs: Average rents and median home sale prices
| City in Indiana | 1 Bed Avg. Rent | 2 Bed Avg. Rent | Median Home Sale Price |
| National Average | $1,495 | $1,725 | $428,000 |
| Indianapolis | $1,250 | $1,463 | $240,000 |
| Fort Wayne | $1,142 | $1,236 | $220,000 |
| Evansville | $835 | $1,020 | $155,000 |
| South Bend | $839 | $1,140 | $158,000 |
| Carmel | $1,672 | $2,036 | $492,000 |
| Bloomington | $1,183 | $1,417 | $273,000 |
| Lafayette | $994 | $1,359 | $212,000 |
| Muncie | $743 | $875 | $134,000 |
| Zionsville | $1,377 | $1,636 | $648,000 |
| Greenwood | $1,212 | $1,409 | $290,000 |
Housing costs in popular cities in Indiana
Indianapolis
As Indiana’s capital and largest city, Indianapolis is filled with Midwest charm. The average rent for a one-bedroom apartment is $1,250, while a two-bedroom averages $1,463. For homebuyers, the median home sale price stands at $240,000, making it accessible for many. Indianapolis offers a vibrant downtown with cultural attractions like the Indianapolis Museum of Art and thriving neighborhoods like Broad Ripple for dining and nightlife.
Read more: Should I Move to Indianapolis? 10 Pros and Cons
Fort Wayne
Fort Wayne is a growing city known for its atmosphere and robust job market. The average rent for a one-bedroom apartment is $1,142, while a two-bedroom costs about $1,236. The median home sale price in Fort Wayne is $220,000, making it more affordable than Indianapolis. Residents enjoy a relaxed pace of life, with attractions like the Fort Wayne Children’s Zoo and an expanding downtown area.
Read more: 5 Unique Things to Do in Fort Wayne
Evansville
Located along the Ohio River, Evansville offers small-town charm with big-city amenities. The average rent for a one-bedroom apartment is $835, while a two-bedroom averages $1,020. The median home sale price is just $155,000, making Evansville one of the most affordable options in Indiana. Residents can explore the city’s parks, museums, and the scenic riverfront.
South Bend
Home to the University of Notre Dame, South Bend blends academic prestige with a strong community spirit. The average rent for a one-bedroom apartment is $839, while a two-bedroom costs about $1,140. The median home sale price is $158,000, making it another budget-friendly city in Indiana. South Bend offers plenty to do, from college football games to the beautiful St. Joseph Riverwalk.
The cost of utilities are on par with national averages
Utility costs in Indiana are generally on par with national averages, making them manageable for most residents. The average monthly electricity bill in the state is approximately $140, while water bills typically cost around $30 per month. Combined, Indiana households spend close to $600 monthly on utilities, which is similar to the national average of $610. Winters in Indiana can be cold, so heating expenses may drive up costs during peak months, while summer air conditioning also adds to the overall bill. However, energy-efficient homes and apartments can help renters keep these costs in check, making utility expenses relatively stable throughout the year.
Energy bill comparisons: Indiana cities vs. nationwide average
| Monthly Energy Bill | Monthly Phone Bill | Comparison to National Avg. | |
| National Average | $203.40 | $194.11 | |
| Indianapolis | $177.30 | $191.72 | -8% less |
| Fort Wayne | $180.97 | $191.72 | -7% less |
| Evansville | $221.02 | $190.77 | +5% more |
| South Bend | $181.68 | $191.72 | -7% less |
| Bloomington | $176.35 | $191.72 | -9% less |
| Lafayette | $187.09 | $191.72 | -5% less |
| Muncie | $240.50 | $189.88 | +8% more |
Data from Redfin’s Cost of Living Calculator, November 2024
Groceries are 10% less than what the average person pays
Groceries in Indiana are generally more affordable compared to the national average, with residents paying about 10% less on average each month. The typical monthly grocery bill for a person in Indiana is around $318, while the national average tends to be closer to $355. This makes Indiana an attractive place for renters looking to stretch their budgets. You can expect lower costs for items like fresh produce, meat, and dairy, which makes meal planning and grocery shopping more affordable. Whether you’re shopping at big-box stores or local farmers’ markets, the cost of food in Indiana is well below the national average, helping renters save on one of the more consistent monthly expenses.
Slightly more affordable cost of transportation
Transportation costs in Indiana remain affordable, with gas prices averaging $2.97 per gallon, slightly below the national average of $3.06. However, gas prices tend to be higher in the northern parts of the state, where residents may face a slight premium compared to other regions. In larger cities like Indianapolis, public transportation is widely accessible, with the IndyGo bus system providing affordable fares, typically around $1.75 for a standard ride. Amtrak also services various routes through Indiana, offering train travel options for commuters or long-distance travelers. Despite these options, owning a car is still the most convenient choice for many residents, especially outside major urban centers where public transit is limited.
Hospital costs rank 8th highest in the country
Moving to Indiana, you’ll start to notice that healthcare costs slightly higher than the national average, with some cities, such as Lafayette, experiencing costs that are 7% more than the national average. Additionally, Indiana ranks #8 in the country for the highest hospital costs, which contributes to the overall higher healthcare expenses. This can make certain procedures and services more expensive for residents. While healthcare is somewhat pricier in specific areas, particularly in cities like Lafayette, those in larger urban centers such as Indianapolis may find more competitive pricing. Despite these costs, healthcare in Indiana remains relatively affordable compared to more expensive states on the coasts.
Indiana has a favorable tax structure
Indiana has a relatively straightforward tax structure, which is generally favorable for residents. The state levies a flat income tax rate of 3.15%, meaning everyone pays the same percentage regardless of income. This makes it simpler to estimate your tax burden, with no progressive tax brackets to navigate. Property taxes are also relatively low, with the average effective rate around 0.75%, compared to the national average of 0.99%. Sales tax in Indiana is set at 7%, which is in line with many other states. Overall, Indiana’s tax rates are considered competitive and affordable, especially in comparison to states with higher income or property taxes, making it a good place to live.
How much do I need to earn to live in Indiana?
To comfortably live in Indiana, following the 30% rule (spending no more than 30% of your income on housing), you’ll need to earn a certain amount based on the average rent and home prices. With the average rent for a one-bedroom apartment in Indiana around $1,190 and a median home price of $258,500, a single renter should ideally earn at least $47,600 annually to cover rent comfortably. This is based on the 30% rule for housing costs. For homeowners, factoring in mortgage payments, property taxes, and insurance, a household would likely need to earn around $55,000 or more to cover the costs of homeownership while maintaining a comfortable standard of living. Of course, factors like location within the state, household size, and lifestyle can affect these estimates, but overall, Indiana offers a relatively affordable cost of living compared to many other states in the U.S.
Methodology
Average 1-bedroom and 2-bedroom rent sourced from Rent. Median home sale price, state average monthly rent, national rent prices, and cost of living data sourced from Redfin.
