Apache is functioning normally
The Midwestern state of Iowa is perhaps best known for its abundant agricultural output of corn and cows. But, that’s far from the only thing that defines the Hawkeye State. Bordered by the Mississippi and Missouri Rivers to the east and west, this lovely state of rolling hills and peaceful forests also has vibrant cities full of art, culture, dining and shopping. It’s also one of the most affordable states in the Midwest, a region that’s known for its low cost of living.
With an appealing mix of big cities and small towns, understanding more about how the cost of living in Iowa differs around Iowa will help you find the best place to live. With low costs on everything from housing to groceries, even big Iowa cities are budget-friendly. Here’s the rundown on the cost of living in Iowa.
Iowa housing prices
Iowa is a fantastic state for affordable housing, with housing costs falling well below the national average. Even in major cities like Des Moines, the average rents are very reasonable. So, maybe this is the place you ditch the roommate and finally get a two-bedroom apartment all to yourself without stretching your budget. Even if big-city rents are too much, nearby towns likely have more affordable options within easy driving or commuting distance.
Let’s take a closer look at the cost of living in Iowa for average rent and home sale prices in different cities.
Ames
Ames is a quickly-growing city in central Iowa. It’s the home of Iowa State University, a renowned research university with top-tier programs in agriculture, engineering, veterinary medicine and design. Thanks to the presence of the university, Ames has fun, youthful energy with lots of art, culture, entertainment, dining and shopping. Right in the heart of the town, residents have access to nature in lush parks like the Reiman Gardens.
As a college town, Ames also boasts affordable rent and housing costs. The cost of living for housing here is 19.7 percent below the national average. Around town, one-bedroom apartments cost around $825 a month, up 8 percent from last year. The cost for two-bedroom apartments is up 3 percent to $840. With a price difference of just $15, you can easily size up to a more spacious two-bedroom unit.
Ames’ housing market has also seen some growth over the past year. The median sale price for a house here is up 9.8 percent to $314,000. For reference, the national median home price is $430,982.
Davenport
Located on the banks of the mighty Mississippi River in eastern Iowa, Davenport is another quickly-expanding city. It forms part of the larger Quad City metro area which includes Bettendorf and Rock Island, Moline and East Moline in Illinois. It’s the biggest city in the metro area with 101,009 residents and Iowa’s third-biggest city. Locals get to enjoy music festivals like the Bix Fest, sports games and outdoor recreation in the city’s 50 lush parks. The city and overall metro area get high marks for liveability.
Despite being a fair-sized city, housing costs here are 36.7 percent below the national average. The average rent for a one-bedroom apartment is $925 and two-bedroom apartments cost around $952 a month. The cost of one-bedrooms is up 9 percent from last year, while two-bedroom unit prices are down 1 percent.
Des Moines
Located in the south-central part of the state, Des Moines is Iowa’s capital city. It’s also the most populous city. Another feather in its cap is that it’s the fastest-growing metro area in the entire Midwest. There’s a good reason for that. From being a hub for insurance companies to dynamic cultural offerings, Des Moines has a lot to offer. Residents can experience art at local museums and sculpture gardens, enjoy the up-and-coming food scene and have family-friendly fun at annual events like the Iowa State Fair. All these reasons and more are why it’s considered one of the best state capitals to call home.
As Iowa’s biggest city, housing prices are higher here. But they’re still very reasonable. In fact, Des Moines has some of the cheapest rents in the U.S. Housing costs are 33.9 percent below the national average. You’ll find one-bedroom apartments for $1,092, which is down 2 percent from last year. But it’s actually more economical to rent a two-bedroom apartment. Costs are down 13.2 percent for these larger units and they’re also far cheaper at $857.
Des Moines also has a very affordable housing market, with a median sale price of $200,000. That number is up 8.2 percent from the previous year.
Sioux City
Located on the banks of the Missouri River in northwestern Iowa, Sioux City is a mid-sized city of around 85,617 residents. One of the city’s claims to fame is that it marks the navigational head of the Missouri River, meaning it’s the further upstream cargo ships can travel. Lewis and Clark also were the first known U.S. citizens to pass through the area. Today, the city is home to museums and parks. Locals enjoy a laidback, relaxed quality of life and it’s a good place for families with young kids.
Housing costs in Sioux City are 29.9 percent below the national average, and average rents have gone down over the past year. The cost for a one-bedroom apartment is down 14 percent from last year to $750. Two-bedroom units are down 10 percent to $950.
Waterloo
The city of Waterloo in northeastern Iowa is part of the larger Waterloo-Cedar Falls metro area. Waterloo is the more populous city of the two with 66,941 residents. From family fun centers to art museums, Waterloo is a great city for families. With the Cedar River running through the heart of the city, nature preserves and urban parks are right in the middle of town. It’s one of the least-crowded cities in the U.S.
Waterloo also has some of the lowest average rents in the state. Overall housing costs are also 21.5 percent below the national average. The cost for one-bedroom apartments jumped 22 percent over the past year to $795. You can get a two-bedroom apartment for $845. The cost for two-bedroom apartments is up 6 percent from last year.
Iowa food prices
Another cost of living in Iowa is food. With more than 85 percent of its land being farms, agriculture and food are deeply entwined with both Iowa’s economy and way of life. Corn and pig are two of its most notable exports, giving rise to famous state foods like breaded pork tenderloins. With food being grown and raised around the state, Iowans enjoy affordable food costs. Average grocery costs are 1.7 percent below the national average. Iowans spend between $233 and $266 per person on food each month. On a yearly basis, that’s between $2,801 and $3,200.
Many Iowa cities are below the national average for total grocery costs. But a few exceed it:
- Waterloo is 5.6 percent below the national average
- Sioux City is 2.8 percent below the national average
- Des Moines is 0.5 percent below the national average
- Ames is 5.7 percent above the national average
- Davenport is 12.6 percent above the national average
In terms of averages, Davenport is the most expensive city for food costs and Waterloo is the least expensive. As an example, a half-gallon of milk is $2.39 in Davenport and $1.96 in Waterloo. But sometimes these prices flip. It’s more expensive to buy steak in Waterloo, costing $14.49 compared to $13.49 in Davenport.
The cost of dining out also changes depending on whether you’re in a bigger or smaller city. Unsurprisingly, Des Moines is the most expensive city for a date night out. The bill for a three-course meal for two at a mid-range restaurant costs $60. You’ll save the most on a date night in Ames, where the same kind of meal costs $47.50.
Iowa utility prices
You’ll be paying less for utilities like electricity, water and internet for the cost of living in Iowa. With its wide-open fields and plains, Iowa is a leader in wind power. In 2020, wind turbines produced 57 percent of the state’s electricity. So, if you’re living in Iowa, what’s powering your home may come from a renewable, sustainable source. A mix of coal, natural gas, nuclear and other renewables make up the rest.
Here’s how the cost of utilities in these Iowa cities compares to the national average:
- Des Moines is 15.7 percent below the national average
- Sioux City is 14 percent below the national average
- Davenport is 13.2 percent below the national average
- Waterloo is 9.7 percent below the national average
- Ames is 5 percent below the national average
Ames is the most expensive city, with total energy costs for the month coming out to $161.90. Davenport and Des Moines are nearly tied for the lowest energy bill at $128.89 in Davenport and $128.69 in Des Moines.
For water, the average water bill in Iowa is $28. Internet is another essential utility for the modern household. For 60 megabits per second, you’ll be paying the least in Waterloo at $63.16 monthly. Des Moines has the priciest internet bills at $77.71 a month.
Iowa transportation prices
WIth the cost of living in Iowa, you’ll be paying less than the national average for public transit. Using public transportation is a great method of saving money on gas. It can also reduce your car insurance payments and cut back on vehicle maintenance costs. Beyond that, using mass transit is more eco-friendly. It’s also an effective way to reduce traffic in big cities. It will likely also save you commuting time. If you’ve ever spent hours stuck in rush hour traffic, you know the value of a speedy commute.
Iowa has 35 different public transit systems throughout the state for both urban and rural areas. All our highlighted cities have public transit systems that serve the city, county and/or metro area. Here’s how the cost of transportation in these cities compares to the national average:
- Sioux City is 10.6 percent below the national average
- Waterloo is 7.6 percent below the national average
- Davenport is 5.2 percent below the national average
- Des Moines is 4.1 percent below the national average
- Ames is 1.9 percent below the national average
Sioux City has the least expensive public transportation. Smaller cities like Sioux City, Ames and Waterloo have less extensive systems than major cities like Des Moines. The Sioux City Transit System provides mass transit throughout the metro area with a fleet of buses. One-way fares cost $1.80 and a monthly pass is $48. The Metropolitan Transit Authority has 11 different bus routes around the city of Waterloo, with fares starting at $1.50. CyRide provides mass transit in Ames, with $1 one-way rides. The use of CyRide buses is free to students of Iowa State University.
Let’s take a closer look at the public transit systems in the bigger cities of Des Moines and Davenport.
Citibus in Davenport
The Citibus system in Davenport operates a bus fleet with routes covering 30 miles of the city. It also connects to broader mass transit in the Quad City metro area. The general fare for adults and children 7 and up is $1 per ride with free transfers. Using the system’s SMART card, you can get a 30-day unlimited ride pack for $22.
With so many parks and interconnected neighborhoods, Davenport is fairly friendly to pedestrians and cyclists. It has a decent walk score of 53 and an OK bike score of 48.
DART in Des Moines
The Des Moines Area Regional Transit Authority is the biggest public transportation system in Iowa. Its fleet consists of 145 fixed routes, paratransit and on-call buses and vehicles with over 1,600 stops around the city and metro area. Riders pay $1.75 for a one-way ride on local routes and $2 on express routes. On local routes, a day pass costs $4 and a monthly pass is $48. Different, personalized services like paratransit and on-call have variable costs, as well.
Des Moines is also a decent city to navigate on foot or by bike, with a walk score of 54 and a bike score of 47. Certain areas like downtown are easier to get around by foot than others.
Iowa healthcare prices
Iowa is a good state to live in healthcare-wise. It ranks well nationally for healthcare access, as well as the quality of care. The state is also in the middle of a big initiative to become the healthiest state in the union. In most cities, the cost of healthcare is also below the national average or slightly above it. You’ll also be paying roughly the same for health care services around the state. As an example of this, here’s how much a doctor’s visit costs in these different cities:
- Sioux City: $140.22
- Ames: $130
- Davenport: $131.25
- Des Moines: $130.25
- Waterloo: $130
Ames, Davenport, Des Moines and Waterloo all cost practically the same. Sioux City is the sole outlier. Going to the dentist is also more expensive here. You’ll be paying around $113.80 for a dental check-up here compared to $85 in Waterloo. As you’ll see below, this makes sense because it’s also the most expensive city compared to the national average:
- Davenport is 4.5 percent below the national average
- Des Moines is 4.4 percent below the national average
- Waterloo is 4.1 percent below the national average
- Sioux City is 5.4 percent above the national average
- Ames is 0.6 percent above the national average
As you can see, healthcare is fairly affordable and accessible throughout the state. But it’s important to note that healthcare costs are challenging to average. This is because of their variability. A person’s health situation determines these costs. Some people have pre-existing conditions or require more expensive prescriptions. As such, one person may pay far more for healthcare than the number above. So, it’s important to remember that the average healthcare cost in your Iowa city isn’t exactly the same for you.
Iowa goods and services prices
Living in Iowa, you’ll be paying less than the national average for basic goods and services items. Here’s how those costs compare nationally:
- Waterloo is 13.9 percent below the national average
- Sioux City is 8.5 percent below the national average
- Des Moines is 5.6 percent below the national average
- Ames is 4 percent below the national average
- Davenport is 1.6 percent below the national average
Waterloo is the least expensive city for goods and services, while Davenport is the most expensive. To make that differential clearer, getting a haircut in Waterloo costs $16.67 compared to $22 in Davenport.
But prices don’t always reflect a city’s high or low ranking. Movie tickets are more expensive in Waterloo, costing $12.04. But in Davenport, they’re $10.62.
Another regular expense you may need to consider is childcare. Iowa’s cities and towns are great for raising families due to their overall safety, fun activities and good schools. But, childcare costs vary widely depending on where you live. If you want to send your child to a private preschool or kindergarten, you’ll be paying around $1,000 a month in Waterloo and Davenport. But in Sioux City, the same type of childcare only costs around $160 monthly. Sure, you switch from a big-city environment to a small-town one by living in Sioux City. But if you have multiple kids, those low childcare costs are pretty appealing.
Taxes in Iowa
Iowa’s statewide sales tax is 6 percent. To put that in perspective, if you spend $1,000 on corn, you’ll be paying $60 extra in taxes. In terms of national rankings, that sales tax rate is pretty middle-of-the-road.
Counties also tack their own taxes onto the statewide rate, hiking up the overall sales tax. Here’s the sales tax rate in our highlighted cities:
- Sioux City has a combined tax of 7 percent
- Ames has a combined tax of 7 percent
- Davenport has a combined tax of 7 percent
- Des Moines has a combined tax of 7 percent
- Waterloo has a combined tax of 7 percent
With the addition of county taxes, the sales tax in all these cities comes up to 7 percent. You’ll be paying $70 extra for every $1,000 spent in these counties. In terms of markups, that’s not too bad.
How much do I need to earn to live in Iowa?
Wondering if life in Iowa fits your budget? A good rule of thumb to follow is the 30 percent rule. It’s recommended that you only spend 30 percent of your gross monthly income on your housing costs, like rent or a mortgage. That way, you have 70 percent left over for other important expenses like groceries. Plus, you need extra left over for savings and fun, leisure activities.
The average rent in Iowa is $960. For 30 percent of your monthly budget, you need to make $3,200 a month or $38,400 annually. Iowa’s median household income is $61,836. This means that most Iowans can comfortably afford housing costs and aren’t stretching their budget.
You can use our rent calculator to crunch some numbers and see for yourself what you can afford for monthly rent.
Living in Iowa
From vibrant cities to relaxed small towns, Iowa offers residents a variety of lifestyles to choose from. No matter where you live in the state, you’ll find an affordable cost of living. On top of that, you’ll get to enjoy all of Iowa’s unique charms and benefits like fresh, local produce and beautiful Midwestern landscapes.
The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of July 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.
Source: rent.com