Composite Index
94.9
US average = 100.0
North Carolina (NC) | Composite 94.9
North Carolina Cost of Living 2026
North Carolina sits at 94.9 on the 2026 cost of living index, modestly below the national average. The state has a 4.5% flat income tax (one of 14 flat-tax states) with a scheduled drop to 3.99% in 2027. Charlotte and Raleigh-Durham metros run above state average; eastern NC remains substantially below.
Composite 94.9Flat 4.5% income taxHeaded to 3.99% by 2027
Median Home
$318,600
2BR rent $1,220/mo
Median Income
$62,891
Household, Census ACS
Category breakdown
All 6 categories vs national average
| Category | NC index | National avg | Difference |
|---|---|---|---|
| Housing | 85.5 | 100.0 | -14.5% |
| Groceries | 96.2 | 100.0 | -3.8% |
| Utilities | 99.8 | 100.0 | -0.2% |
| Transportation | 97.5 | 100.0 | -2.5% |
| Healthcare | 99.5 | 100.0 | -0.5% |
| Miscellaneous | 97.2 | 100.0 | -2.8% |
Sources: BEA Regional Price Parities, C2ER Cost of Living Index, Census ACS 5-year (median income, home value), North Carolina Department of Revenue (income and sales tax), Tax Foundation (state tax burden), KFF (uninsured rate post-Medicaid-expansion).
Pros / offsets
What works in North Carolina.
Modest cost of living statewide. Composite 94.9 puts NC in the cheap-half of the US. Median home $318,600 is reasonable for major-metro standards; rural and eastern NC home values are substantially lower.
Flat 4.5% income tax. One of 14 flat-tax states. The North Carolina Department of Revenue confirms a scheduled rate cut to 3.99% by 2027 (HB 1097 / 2023 reform). Standard deduction $12,750 single / $25,500 joint.
Bailey settlement for retirees. Federal, NC state and local government retirement income earned before 1989 is exempt under the Bailey settlement. Significant benefit for pre-1989 retirees.
Medicaid expanded. North Carolina expanded Medicaid in late 2023, closing the coverage gap. Uninsured rate has dropped from 13%+ to 9.8% per KFF.
Cons / drivers
Where North Carolina costs more.
Charlotte and Raleigh-Durham premiums. Major metros run 10-25% above state average. Charlotte median home $410,000+; Raleigh $475,000+. Both metros have seen substantial migration-driven inflation since 2020.
Sales tax 4.75% state plus local. Combined rates reach 7.5% in most counties. Mecklenburg County (Charlotte) hits 7.25%. Groceries are exempt; prepared food is taxed.
Property tax 0.70% effective. Below national average. But Mecklenburg, Wake and Durham counties charge effective rates closer to 0.85-1.0% on rising home values. Property tax is locally levied; the NC Department of Revenue maintains the county rate database.
Hurricane and coastal storm exposure. Eastern NC and the Outer Banks have substantial hurricane exposure, raising property insurance costs in coastal counties.
Tax + benefit signals
North Carolina tax and access overview
State income tax
4.5%
Graduated or flat
Property tax effective
0.70%
Of assessed value, annual
Sales tax (state)
4.75%
Local can add 1-4% more
Uninsured rate
9.8%
Medicaid: expanded
Metro variation
State averages mask city variation.
NC state composite 94.9 averages substantial intra-state variation:
Charlotte (Mecklenburg County): Roughly 105-115 RPP. Major banking center, substantial new construction supply offsetting demand. Median home value $410,000.
Raleigh-Durham (Research Triangle): Roughly 105-115 RPP. Tech, biotech and university employment cluster. Median home value $475,000 in Wake County.
Asheville: Roughly 100-110 RPP. Tourism + retirement destination. Median home value $400,000.
Greensboro / Winston-Salem (Triad): Roughly 90-95 RPP. Lower than state average. Median home $250,000-$275,000.
Wilmington: Roughly 95-105 RPP. Coastal premium, hurricane insurance considerations.
Eastern NC / smaller cities: Roughly 80-90 RPP. The cheapest parts of North Carolina; very low home values.
Frequently Asked
North Carolina cost of living, answered
Is North Carolina cheap or expensive?
Modestly cheap statewide (composite 94.9). The major metros (Charlotte, Raleigh-Durham) are at or above the US average due to migration-driven housing inflation; the smaller cities and rural areas remain substantially cheaper. State income tax is moderate at 4.5% flat. The pattern is similar to Tennessee and Georgia.
What is the North Carolina income tax in 2026?
4.5% flat rate. North Carolina is one of 14 flat-tax states. HB 1097 (2023 reform) scheduled cuts: 4.5% in 2026, 4.25% in 2026 partial year, 3.99% by 2027. Standard deduction $12,750 single / $25,500 joint. The North Carolina Department of Revenue publishes the year-by-year schedule.
What is the Bailey settlement?
A 1998 NC Supreme Court ruling (Bailey v. State) that exempts federal, NC state and local government retirement income earned before 1989 from NC state income tax. Significant for retirees who worked in qualifying government positions before 1989. Post-1989 government retirement income is taxed normally.
How does NC compare to South Carolina for cost?
SC is slightly cheaper overall (composite 92.5 vs NC 94.9) but has graduated income tax up to 6.2% (vs NC flat 4.5%). For high earners, NC's flat tax is more favorable. For lower earners, SC's lower starting brackets can be more favorable. Both states have hurricane exposure on the coast.
Has Medicaid expansion changed NC's healthcare picture?
Yes. NC expanded Medicaid in late 2023 (effective December 2023). The uninsured rate has dropped from 13%+ pre-expansion to 9.8% per KFF (latest data). The coverage gap that affected 600,000+ NC residents has been closed. Healthcare access remains tighter in rural counties.
Should I move to North Carolina from a high-cost state?
Common move from NY, NJ, MA, CA. The savings vary: housing 25-50% cheaper than coastal-blue-state median, state income tax 4.5% vs 6-13% in origin state, sales tax similar. Migration data shows NC is a top inbound state. Run the calculator with your specific situation; metro choice within NC matters substantially.