What Is the ​Cost of Living in Madison WI? 💵 A Dive Into the Average Cost of Living in Madison WI

Madison, WI, is the capital city of Wisconsin and the third largest city in the state with a population of 269,840 at the time of the 2020 U.S. Census. Considering these factors alone, one would likely assume the cost of living in Madison, WI, is high. And while it’s true that the average cost of living in Madison is higher than both the state and national averages, it isn’t exorbitantly overpriced for being such a large, modern city in a great location.

Here, we will take a closer look at the average cost of living in Madison, WI. No matter if you're a single person or married, this information will hopefully help you make an informed choice when deciding whether to live in Madison, WI, or move to another new city or town.

Madison WI Cost of Living Index

To determine the cost of living in Madison, WI, you should first understand the Cost of Living Index (COLI). The Cost of Living Index measures the cost of living differences among different urban areas; it does so by measuring the relative prices of certain consumer goods and services in those areas.

The average among these different areas equals 100, and each area’s index reads as a percentage of that average. For instance, if the COLI for an area is 125, then that area is about 25% more expensive than the national average. And if the COLI for an area is 90, then that area is 10% less costly than the national average.

The cost of living in Madison, WI, is 104.2, which means the cost of living is about 4.2% above the national average. And when compared to the state of Wisconsin cost of living, which is 95, the cost of living in Madison is almost 10% higher.

Overall, across several categories, the average cost of living in Madison, WI is slightly above the national average. Healthcare is one of the more expensive items in Madison WI, at almost 20% higher than the national average and 12% above the state average. In general, Madison is more expensive when compared to the rest of the state of Wisconsin; however, in categories like housing, groceries, and utilities, it falls at or just below the national average.

Consumer Price Index for Madison, WI

The Consumer Price Index in the Midwest region went up 0.1% in July. The increase was led by a 0.2% rise in the all items, not counting food and energy index. The energy index went down 0.3%, and the index for food fell 0.2%.

All items increased 2.6% for the 12 months ending in July. This increase was largely due to a 3.0% increase in the index for all items less food and energy. The food index rose 2.4%, while the energy index declined 1.7%.

Madison, WI, Consumer Expenditures Survey

The Consumer Expenditures Survey is a national survey conducted by the Bureau of Labor Statistics (BLS) that gathers data about how U.S. households spend their money, offering a glimpse of the cost of living in Madison, WI. It details household expenditures–such as food, housing, transportation, and healthcare–as well as income and demographics. Consumer Expenditure Survey results are used for various purposes, including updating the Consumer Price Index and informing economic policy.

Like the Consumer Price Index, Consumer Expenditures Survey results are broken down by region. According to the Consumer Expenditures Survey, the average Madison, WI, household (Midwest region) spends the following amounts in these categories annually:

• Food: $9,223 (12.9% of total income)
• Housing: $22,014 (30.9% of total income)
• Utilities, fuels, and public services: $4,530 (6.4% of total income)
• Transportation: $12,213 (17.1% of total income)
• Healthcare: $6,619 (9.3% of total income)

Family Budget Cost of Living Calculator: The Economic Policy Institute

If you’re looking for a simple answer to the question, “How much do you need to make to live in Madison, WI?” then look no further than the Economic Policy Institute’s Family Budget Calculator.

According to the EPI Family Budget Calculator, a family size of four (two adults and two children) would have an average Madison cost of living of $114,970 annually in order to live comfortably.

Let’s take a closer look at how this figure breaks down into various expenses when determining the cost of living in Madison, WI:

• Housing: $16,464
• Food: $13,536
• Child Care: $26,832
• Transportation: $17,940
• Healthcare: $13,740
• Other necessities: $10,092
• Taxes: $16,368

Cost of Household Items, Utilities, Gas, & Groceries in Madison, WI

Is Madison, WI, expensive? It isn’t an incredibly expensive place to live when compared with other large cities; however, the cost of living in Madison, WI, is slightly higher than the national average–about 4.2% higher. The following are just a few examples of consumer prices, average Madison utilities, public transportation costs, and more.

• Steak (Ribeye, 1 lb): $13.93
• Milk (Whole 1/2 Gal.): $4.79
• Eggs (1 Dozen, Grade A): $3.93
• Potatoes (5 lb bag): $4.20
• Bread (Wheat, 1 loaf): $4.16
• Beer (Heineken's 6 pack): $8.82
• Movie ticket (1st Run): $12.47
• McDonald’s burger (1/4 pounder): $5.43
• Average cell phone bill: $185.25
• Average cost of gasoline (Per Gal.): $3.39
• Madison Metro Transit Bus System Fare: Adult, single-ride fare is $2.00. (For multiple rides, fares are capped at $5/day, $16.25/week, and $65.00/month)
• Average electricity bill (per month): $92.00
• Average gas bill (per month): $84.00
• Average water & sewer bill (per month): $88.00
• Average car insurance premium (per month, full coverage not basic): $112.00

Housing Costs: Madison, WI, Real Estate Market

According to Redfin, the Madison real estate market is competitive despite home prices being down 1.4% from 2024. The median home price in Madison is $435K, with a cost per square foot of $259.00, which is up 4.4% from the previous year. Many Madison homes for sale receive multiple offers and sell for about 2% above the listing price, and the hottest homes can sell for up to 5% above the listing price. Homes generally sell in about 41 days. The percentage of owner-occupied homes in Madison is 43%.

If you’re interested in the median home price by type of home, here is a helpful breakdown:

• Single Family Home: 458K
• Townhouses: $324K
• Condos/Co-ops: $265K

Price-To-Rent Ratio

Trying to decide if you should rent or buy? The price-to-rent ratio can help you make that decision. The calculation is simple: Median Home Price ÷ Median Annual Rent = Price-To-Rent Ratio. The lower the ratio, the better it is for buyers, and the higher the ratio, the better it is for renters. A ratio of 1 to 15 indicates that it’s better to buy than rent; 16 to 20 means it is probably better to rent; 21 or more means it’s better to rent.

Calculation for Madison: $435,000 ÷ $21,432 = 20.3

In this case, the price-to-rent ratio in Madison is 20.3. When considering the cost of living in Madison, WI, it is probably better to rent in Madison than to buy.

Madison Rental Market – Average Rent in Madison, WI

If you’re apartment hunting and wondering, “What is the average rent in Madison, WI?” you should know that at $1,786 per month, it is slightly above the national average of $1,750.

The most affordable neighborhoods in Madison, WI, include Carpenter-Ridgeway, where rent averages $1,189 per month, and Elvehjem, where rent averages $1,203 per month. In more expensive neighborhoods, like Radio Park and South Campus, rent ranges from $2,060 to $2,643.

According to ATTOM, the Midwest has some of the most affordable rental and home ownership markets. Whether you’re renting or buying in the Midwest, both rent and home prices are affordable, so either is a good option.

In order to afford rent in Madison, WI, you can look to the Out of Reach report by the National Low Income Housing Coalition. This report indicates the hourly wage you need to earn in order to afford the HUD Fair Market Rent so that your rent does not exceed 30% of your income. In order to afford a one-bedroom home in Madison, WI, you must earn at least $29.42 per hour, and to afford a two-bedroom home, you must make $33.85 per hour.

Average Salary & Household Income in Madison, WI

The median household income in Madison is $70,484. The average salary in Madison, WI, is $77,000, and the average hourly wage is $23.92 per hour according to Payscale. The average weekly wage in Madison is $1,435, making it slightly lower than the national weekly wage of $1,507.

Income, Sales, & Property Taxes in Madison

In order to understand the cost of living in Madison, WI, you can’t forget to include the taxes you would have to pay. The following data covers what types of taxes you can expect to pay in Madison, WI, from income to sales and property taxes.

Income Tax

The Wisconsin income tax rate ranges from 3.50% to 7.65%; the rate will vary based on factors like income and marital status.

Sales Tax

Sales tax in Madison, WI, is 5.50% and is broken down here:

If you’re wondering how the state of Wisconsin sales tax compares to the rest of the U.S., it ranks #44 out of 50, placing its sales tax on the lower end. Lower sales tax can significantly reduce the cost of living in Madison, WI.

Property Tax

Property taxes can be quite expensive and greatly increase the cost of living in Madison, WI. Madison property taxes are calculated based on the assessed value of the property and the total property tax rate, also called the mill rate. The mill rate is determined by taking the total property tax levy and dividing it by the total taxable property value. And finally, the property tax calculation is: Property Tax Bill = Assessed Property Value x Mill Rate.

Madison vs Milwaukee Cost of Living

If you’re trying to decide whether you’d prefer to live in Madison or Milwaukee, you’ll find some of the biggest differences between cost of living, Madison, WI vs Milwaukee are in the housing options. Otherwise, sales and income taxes are the same, and average salary and hourly wage are similar. In the chart below, you can compare Madison costs side-by-side with Milwaukee.

Ready to Make a Move to Madison, WI? We Can Help

Is Madison, WI, affordable? While higher than the state and national averages in some categories, the average cost of living in Madison, WI, is affordable compared to other large cities. A relatively lower cost of living offers a nice quality of life with less stress, a lifestyle we all no doubt strive for.

If you’re ready to make a move to Madison, the professionals at StraightLine Moving are here to help. We offer relocation services that include local moving, long distance moving, apartment moving, packing services, and much more. Call the best Madison, WI, movers for your free quote today, at 815-708-7875.