Iowa balances affordable living and quality of life, making it an appealing option for those seeking to live in the Midwest. With a cost of living below the national average, Iowans enjoy relatively low housing costs, inexpensive utilities, and an overall affordable lifestyle. Whether you’re considering renting or buying a home in cities like Des Moines or Cedar Rapids, or looking into rural communities, there’s plenty to choose from. In this article, we’ll break down the cost of living in Iowa, covering everything from housing to transportation and healthcare, so you can get a better sense of what to expect when living in the Hawkeye State.
Housing costs: Median home prices and average rent in Iowa
Housing costs in Iowa are notably lower than the national average, offering residents an affordable living option compared to many other states. The median home sale price in Iowa is $240,000, significantly below the national median of $428,000, making homeownership more accessible. Renters also benefit from lower-than-average rental prices, with the average one-bedroom apartment costing just $940 per month, compared to the national average of $1,645.
While Iowa as a whole is relatively affordable, certain cities can be more expensive. For example, Des Moines, the state’s capital and largest city, sees higher prices, with median home averaging closer to $1,100 for a one-bedroom. On the other hand, more affordable cities in Iowa include Waterloo, where average rents can be as low as $900 for a one-bedroom apartment.
Iowa housing costs: Average rents and median home sale prices
| City in Iowa | 1 Bed Avg. Rent | 2 Bed Avg. Rent | Median Home Sale Price |
| National Average | $1,495 | $1,725 | $428,000 |
| Des Moines | $1,107 | $1,210 | $211,000 |
| Cedar Rapids | $786 | $964 | $191,000 |
| Davenport | $1,040 | $1,017 | $179,000 |
| Sioux City | $1,022 | $1,297 | $208,000 |
| Waterloo | $905 | $935 | $171,000 |
| Iowa City | $1,275 | $1,875 | $315,000 |
| Ames | $912 | $1,077 | $320,000 |
| West Des Moines | $1,169 | $1,300 | $307,000 |
| Marshalltown | $637 | $775 | $160,000 |
| Bettendorf | $1,280 | $1,429 | $330,000 |
Housing costs in popular cities in Iowa
Des Moines
Des Moines, the bustling capital of Iowa, is full of amenities while having small-town charm. Housing costs here are reasonable for a city of its size, with the average rent for a one-bedroom apartment at $1,107 and two-bedroom apartments averaging $1,210. The median home sale price is $211,000, making homeownership accessible for many residents. Renters can expect modern apartments in the downtown area, while suburban neighborhoods provide spacious homes.
Read more: Should I Move to Des Moines? 10 Pros and Cons
Cedar Rapids
Cedar Rapids combines affordability with a relaxed lifestyle, making it a great option for those seeking budget-friendly housing. The average rent for a one-bedroom apartment is $786, and two-bedroom units average $964, well below national averages. The median home sale price sits at $191,000, offering excellent value for first-time buyers. Known as the “City of Five Seasons,” Cedar Rapids has a strong sense of community, scenic parks, and a great arts scene.
Davenport
Davenport, part of the Quad Cities along the Mississippi River, offers residents an affordable and scenic place to live. Average rents for one-bedroom apartments are $1,040, and two-bedroom apartments average slightly less at $1,017. Homebuyers can find deals with a median home sale price of $179,000, one of the lowest among Iowa’s major cities. The city has a laid-back vibe, with a revitalized downtown area, riverfront parks, and local breweries.
Sioux City
Sioux City, located in the northwest corner of Iowa, is a historic city. The average rent for a one-bedroom apartment is $1,022, while two-bedroom apartments average $1,297. The median home sale price is $208,000, making the city a cost-effective option for both renters and buyers. Sioux City’s historic districts and riverfront offer unique living experiences, with apartments and homes reflecting the city’s rich history.
Utility costs in Iowa are lower than the national average
Utility costs in Iowa are generally lower than the national average, making it an affordable state for monthly household expenses. The average electric bill in Iowa is around $117 per month, slightly below the national average. Heating costs can vary depending on the season, but the state’s reliance on renewable energy sources, particularly wind power, helps keep overall energy costs manageable.
On average, Iowans pay around $543 per month for utilities, which includes electricity, water, internet, and heating, compared to the national average of $610. Residents in larger cities like Des Moines may see slightly higher utility costs, while smaller towns and rural areas often benefit from lower rates.
Energy bill comparisons: Iowa cities vs. nationwide average
| Monthly Energy Bill | Monthly Phone Bill | Comparison to National Avg. | |
| National Average | $203.40 | $194.11 | |
| Des Moines | $145.79 | $187.11 | -19% less |
| Cedar Rapids | $218.73 | $189.40 | +4% more |
| Davenport | $148.84 | $199.73 | -15% less |
| Sioux City | $145.69 | $188.89 | -20% less |
| Waterloo | $141.67 | $189.26 | -20% less |
| Iowa City | $160.68 | $187.88 | -14% less |
| Ames | $210.78 | $189.26 | +1% more |
Data from Redfin’s Cost of Living Calculator, November 2024
Cost of groceries are lower than national averages
Grocery costs in Iowa are slightly lower than the national average. The average monthly grocery expense per person in Iowa is approximately $347, compared to the national average of $355. The state’s robust agricultural industry, including corn, soybeans, and pork production, helps keep prices for many staples more affordable. While larger cities like Des Moines may have higher grocery costs due to increased demand and a wider variety of options, smaller towns and rural areas often benefit from lower prices at local markets.
Transportation is cheaper in Iowa
Transportation in Iowa is relatively cheaper, with gas prices averaging $2.75 per gallon, notably lower than the national average of $3.07. However, the northeastern part of the state, particularly in areas near larger cities like Dubuque, tends to have slightly higher gas prices due to regional supply and demand dynamics.
For public transportation, major cities such as Des Moines, Cedar Rapids, and Davenport offer bus services, with fares typically costing around $1.75 per ride or $45 for a monthly pass, making it an economical option for commuters. Cycling is another cost-effective mode of transportation, especially in bike-friendly cities like Cedar Rapids, which have dedicated trails and lanes. Overall, Iowa’s transportation costs are manageable, providing options that suit both urban dwellers and those in rural areas.
Lower-than-average healthcare costs
Healthcare in Iowa is more affordable compared to many other states, with costs typically falling below the national average. Residents can expect to pay an average of $6,400 annually per person for healthcare, which includes doctor visits, prescriptions, and insurance premiums. This figure is significantly lower than the national average, where average annual premium for employer-sponsored health insurance was about $8,435 for single coverage.
While urban areas like Des Moines and Cedar Rapids have a wide range of healthcare providers and specialized services, rural parts of the state may face challenges with fewer providers and longer travel distances to access care.
Moderate tax structure
Iowa’s tax structure features progressive income tax rates ranging from 4.4% to 5.7%, higher than some neighboring states. Property taxes average 1.4% of a home’s value, slightly above the national average of 0.99%, though lower median home prices help offset the cost. The state sales tax is 6%, with some local additions bringing the total to a maximum of 7%. Overall, Iowa balances slightly higher taxes with affordability in other areas, creating a manageable cost of living for most residents.
How much do I need to earn to live in Iowa?
To comfortably live in Iowa using the 30% rule — which recommends spending no more than 30% of your income on housing — your annual income should align with your living arrangements. With an average rent of $940 per month, you’d need to earn at least $37,600 annually to meet this guideline for renting. For homebuyers, Iowa’s median home sale price of $240,000 translates to a mortgage payment of approximately $1,300 per month, assuming a 20% down payment and current interest rates. To afford this, a yearly income of about $52,000 is advisable. Iowa’s relatively low housing costs make it accessible for many, but earning more will allow you to comfortably cover other expenses like utilities, transportation, and groceries.
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.
