Cost of Living in Alaska: Average Rent, Groceries, Utilities, and More

Alaska isn’t just about stunning landscapes and epic wildlife—it’s also one of the most unique states when it comes to living expenses. The high cost of living in Alaska can take some by surprise. Whether you’re exploring apartments in Fairbanks or eyeing homes in Kodiak, understanding how far your dollar stretches is essential. From housing costs to groceries and transportation, living in Alaska comes with its own set of financial factors. But many residents find that Alaska is a great place to call home and these elevated costs are often worth it. Let’s break down the cost of living in Alaska.

Housing costs: Median home prices and average rent in Alaska

Housing costs in Alaska vary widely depending on location, but overall, they’re lower than the national average—though not by much. The average rent in Alaska is around $1,400, compared to the national average rent of $1,645, making it a bit more affordable for renters. That said, affordability depends heavily on where you live. Cities like Anchorage and Fairbanks tend to be more expensive areas, with limited housing options and a higher reliance on imported goods driving costs up. On the flip side, you’ll find more affordable options in places like Palmer, where housing prices are a little easier on the wallet. Whether you’re renting or buying, the cost of living in Alaska reflects its unique lifestyle: remote, scenic, and slightly pricier in certain cities.

Alaska housing costs: Average rents and median home sale prices

Housing costs in popular cities in Alaska

Anchorage

Anchorage is the largest city in Alaska and offers a mix of urban amenities, stunning natural beauty, and a diverse economy. With its strategic location as a hub for transportation and commerce, Anchorage comes with higher living costs compared to other areas in the state. The average rent in Alaska is about $1,400, while Anchorage sits just above this at $1,410 for a 1-bedroom apartment, moving closer to the national average rent of $1,645. Two-bedroom apartments are around $1,650, while the median home sale price is $420,000—slightly below the national median sale price of $428,000. Those considering homes in Anchorage will appreciate its modern amenities and access to Alaska’s most vibrant urban life, but it comes with a price tag that reflects its status as the economic and cultural hub of the state.

Read more: 14 Pros and Cons of Living in Anchorage, AK

Fairbanks

Nestled in central Alaska, Fairbanks combines the charm of a small-town vibe with natural Alaskan appeal. It’s a bit more expensive to live here, with an average rent in Fairbanks for a one-bedroom apartment sitting at $1,500 and two-bedroom apartments going for $1,750. While rent prices here exceed the average rent in Alaska ($1,400), Fairbanks offers affordability when it comes to home prices. The median home sale price here is $265,000, making homeownership slightly more attainable compared to other major Alaskan cities. Fairbanks offers a mix of cultural richness and proximity to stunning natural landscapes like Denali National Park, contributing to its appeal despite its rising costs.

Palmer

Nestled near the mountains and offering a quieter, small-town atmosphere, Palmer is an attractive choice for those seeking affordable housing while still being close to nature. The average rent in Palmer is around $1,095 for a one-bedroom apartment and $1,375 for a two-bedroom—well below the national average of $1,645 and even the average rent in Alaska of $1,400. With a median home sale price of $300,000, Palmer is an affordable option for potential homebuyers looking to escape the hustle and bustle of larger urban areas. Its affordability combined with its proximity to outdoor recreation opportunities makes it an ideal location for those wanting both affordability and lifestyle.

Sky-high utility costs in Alaska add to the above-average cost of living

The cost of utilities is a significant factor to consider when budgeting for life in Alaska. On average, monthly costs for basic utilities—covering electricity, gas, water, and sewer—are about $400.12, but when you factor in internet and phone services, the total rises to $691.12. This is just slightly above the national average of $609.90, though Alaska lands itself in the top five most expensive states for utility costs. The higher expenses stem from the state’s remote location, reliance on diesel fuel, and the energy demands of colder climates. Some areas, like Fairbanks and Juneau, experience even steeper costs due to the logistical challenges of fuel delivery and heating during the long winter months. While these costs can add up, they are a reflection of the unique lifestyle and conditions of living in the Last Frontier.

Utility bill comparisons: AK cities vs. nationwide average

Alaska finds itself in the top 3 most expensive states for average monthly grocery costs

Grocery costs in Alaska are among the highest in the country, reflecting the challenges of transporting goods to its remote locations. On average, Alaskans spend about 36% more on groceries each month compared to the national average, making it the third most expensive state for grocery bills, behind only Hawaii and Vermont. Everyday items show stark price differences—vegetable oil costs $12.22 for half a gallon in Kodiak and $10.58 in Anchorage, compared to the U.S. average of $8.45. Similarly, a dozen eggs will set you back $4.79 in Kodiak or $3.98 in Anchorage, far above the national average of $3.35. These higher costs are an unavoidable part of the cost of living in Alaska, but they also reflect the state’s unique geographic and logistical hurdles.

Expect above-average transportation costs to contribute to a higher cost of living in Alaska

Transportation costs in Alaska reflect the state’s vast size and limited infrastructure, making them an important factor in the cost of living in Alaska. The current average gas price in the state is $3.42 per gallon, slightly above today’s national average of $3.01, but in rural areas or remote locations, prices can spike significantly due to transportation challenges. For many Alaskans, driving is essential, as public transportation options are limited outside urban centers like Anchorage, where the People Mover bus system offers an affordable, albeit limited, alternative. In rural areas, residents often rely on ferries, small planes, or even snowmobiles during the winter months, which come with additional costs. Vehicle maintenance, insurance, and registration also tend to run higher due to the harsh climate and rugged terrain, which take a toll on cars and trucks. For those planning to live in Alaska, understanding these factors is key to budgeting effectively for day-to-day travel.

Alaska residents should expect to pay more for healthcare

While the exact cost of care depends on personal needs, insurance coverage, and location, residents often face prices well above the national averages in Alaska. For instance, a visit to the dentist in Anchorage costs around $167.10, compared to the national average of $116.86. In Fairbanks, the price rises to $172.14, and in Juneau, it’s $153.98, on average. Doctor visits show an even larger gap, with Anchorage averaging $239.38, Fairbanks at $257.63, and Juneau reaching $271.96, far above the national average cost of $142.74. These elevated costs reflect Alaska’s remote geography and limited provider availability, so those moving to Alaska should plan carefully for healthcare, as these costs can significantly impact overall budgets.

Alaska’s tax-friendliness helps offset the state’s higher living expenses

Taxes in Alaska play a unique and beneficial role in the cost of living in Alaska, helping offset some of the state’s higher expenses. Alaska stands out for having no individual income tax and no state sales tax, which allows residents to keep more of their earnings. While some local jurisdictions impose sales taxes, the combined state and local rate averages just 1.82 percent, far below the national average. Property taxes are slightly higher, with an effective rate of 1.07 percent on owner-occupied homes, but this is balanced by the lack of other significant tax burdens. Alaska’s tax system ranks an impressive 3rd overall on the 2025 State Tax Competitiveness Index, reflecting its resident-friendly structure. For those weighing the state’s elevated costs in areas like healthcare and groceries, these tax benefits can provide meaningful relief.

How much do I need to earn to live in Alaska?

To determine how much you’d need to earn to live comfortably in Alaska, the 30% rule is a helpful starting point. This guideline suggests spending no more than 30% of your monthly income on rent. With the average rent in Alaska at $1,400, you’d need to make about $4,667 per month, or roughly $56,000 annually, to adhere to this rule. However, where you live in Alaska can significantly affect this calculation. For example, renting in Fairbanks, where a one-bedroom apartment averages $1,500, would push the income needed to about $5,000 per month. It’s important to note that this is just a guideline. Alaska’s elevated costs for essentials like groceries, utilities, and healthcare mean you’ll likely need to earn more to maintain a comfortable lifestyle or carefully budget for other monthly expenses.

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.