What's the Cost of Living in Kentucky?

August 14th, 2023

What's the Cost of Living in Kentucky?

Cost of Living Kentucky

Is Kentucky an expensive place to live? Let's look a little deeper into the cost of living in Kentucky, the average household income, and typical expenses. 

Are you searching for a place to reside with reasonably priced housing and a low cost of living? You've come to the right place, as this state is renowned for these features, and they are among the top reasons why individuals choose to reside here.

Kentucky sits in the southeastern part of the United States and boasts a vibrant cultural heritage alongside hospitable and amiable locals. With a population of over 4.5 million, this state presents an array of opportunities for its inhabitants.

Big fan of basketball, baseball, and horse racing? Good thing Kentucky is home to the famous Kentucky Derby, Louisville Slugger, and many college basketball teams. Whether you are searching for a fresh start or a place to retire, this place has something for everyone. 

If you are interested in moving to this gorgeous and fun-filled state, you should check out some beautiful homes for sale in Kentucky to jumpstart to process. 

Keep reading to learn more about the cost of living and typical expenses in Kentucky. 

Cost of Living Kentucky

In general, Kentucky has a low cost of living. The cost of living in this state is roughly 8 percent lower than the national average.

To break it down, the cost of housing in this area is 23 percent lower than the national average, while utilities are 4 percent higher and food and groceries are 3 percent lower. According to the Bureau of Economic Analysis, an estimated amount of $40,816 per year is required for a comfortable living in Kentucky.

Kentucky is a relatively affordable state and has no expected rise in living costs anytime soon. Even with large metropolitan cities throughout, you still will live more affordable in this state overall. 

Light up bridge in Kentucky

Louisville is one of the biggest cities and the cost of living is still 4 percent lower than the national average. Homes in Louisville are even 21 percent lower. Check out some expenses broken down from this city to get a better understanding. 

Cost of Living Category Median Price
Median Home Price $355,319
Median Rent Price $1,080
Gas $3.84
Gallon of Milk $2.27

Sourced from Payscale

Real Estate

Kentucky is recognized for its reasonably priced housing. The cost of housing is 23 percent lower than the national average. In the past year, home values have experienced a 9 percent increase, which is faster than the average growth in home prices.

The median home price of a house here is about $355,319 and the median rent cost is $1,080 a month. Whether you are searching for homes in urban or rural areas Kentucky has it. 

Typically, houses remain available for sale for a period of 27 days to as long as 4 years. Currently, in Kentucky, the housing market is favorable towards sellers as the demand has increased steadily over the years, driven largely by the thriving economy.

Housing in Louisville and Lexington is in higher demand, resulting in a more competitive market. If you are considering relocating to Kentucky, you should monitor the market closely and search for the best location that works for you.

Check out the best places to live in Kentucky to help you find the perfect location to find your forever home. 

Horses in green field in Kentucky


In the year 2023, Kentucky's job market ranks as the 8th best in the nation. This is due to a 3% increase in overall employment, a 7% rise in job opportunities, and a low unemployment rate of just 5%.

According to the United States Census Bureau, the median individual income in Kentucky is $27,503, and the median household income is $52,238. To live comfortably here, about $29,479 is needed annually. 

Kentucky's major industries include healthcare, manufacturing, construction, education, and hospitality. Moreover, the economy is predicted to grow in the coming months.

Kentucky boasts a diverse and robust economy with strong sectors across various industries. If you're on the lookout for job opportunities, this state offers plenty of options. However, it's essential to keep in mind that every job market has its own set of strengths and weaknesses.

One of the first steps when moving somewhere is finding a job; good thing this state ranks high in many sectors and has something for everyone so that is one thing you do not need to worry about whne moving to Kentucky. 


It's unfortunate that utility costs in Kentucky are 4% higher than the national average, with an average cost of around $386 per month. However, it's important to note that these costs can vary based on your location, lifestyle, and network.

The average residential electricity rate in Kentucky in 2023 is 12.03 cents per kilowatt hour, which is below the national average, which is 15.68-kilowatt hour. There are many different providers in this state, so make sure you find the best fit for you!

Please bear in mind that utility costs may differ based on your lifestyle and usage for each category. As every individual is unique, you may experience higher bills during the colder and hotter months due to your air conditioning and heating usage.

Here are some of those typical utility charges broken down per month. 

Water $31
Electricity $125
Gas $128
Cable/Internet $102


On average, a single adult will spend about $2,932 on food annually, while a family of four will spend about $8,467. The food and grocery costs here are 4 percent lower than the national average, so these prices are more affordable compared to other places. 

Keep in mind that these prices will vary depending on your diet, where you shop, your family size, and how many times you eat out. Budgeting is very important if you want to lessen the costs. However, if you are looking for some of the best places to eat in Kentucky, check out the list below. 

  • Hall's On The River: This is a restaurant that offers fried catfish and other Southern-inspired comfort fares that are served in a quaint, casual riverside setting. 
  • Wunderbar!: This is a German restaurant located in a funky neighborhood nook with housemade sausages and other German bites, plus craft beers and patio seating. 
  • Claudia Sanders Dinner House: This is an American restaurant that has southern fare in a replica of an elegant, old home opened by Colonel Sanders of KFC fame. 

Barrels in Kentucky


Here, the typical expenditure on healthcare for an individual adult is approximately $3,679 each year. For a family of four, the average expense is about $11,086, which is lower than the countrywide average.

Please be aware that health insurance costs are unique to each individual. In the state of Kentucky, the average cost per person is approximately $7,111. To help you find the best deal, we have listed some of the most affordable plans available in Kentucky.

Company Monthly Cost Maximum Out-of-Pocket
WellCare $400 $5,400
Anthem (BCBS) $405 $5,950
CareSource Kentucky Co. $397 $9,100
Passport by Molina Healthcare $414 $8,900


Kentucky does have a large automobile manufacturing industry here, so using cars is usually the most popular option here. On the other hand, cities do offer affordable public transit as well. 

Did you know that in Kentucky, around 92% of the population commutes to work? That's higher than the national average. Considering expenses like gas prices, car insurance, and other factors, the transportation costs for a single adult in Kentucky come to approximately $10,292 per year.

If you do not have your own vehicle and need to use public transit, check out public transportation providers to help find the best provider and services that work for you. 


Kentucky has a 5 percent corporate income tax rate and a 6 percent state sales tax rate and does not levy any local sales taxes. The tax system for Kentucky ranks 18th overall on the 2023 State Business Tax Climate Index

Some things vary in Kentucky rather than in other states. Groceries and prescription drugs are exempt from sales tax, clothing is taxable, and motor vehicles are exempt if 6 percent of the vehicle usage tax is paid. 

On the other hand, Kentucky has an average property tax of 0.83 percent per assessed home value, according to the Tax Foundation. Every working individual in the state of Kentucky must pay their taxes and file tax returns. The state employs a flat income tax rate of 5 percent. 

After accounting for state and federal income taxes, as well as Social Security and other contributions, the average working adult can expect to pay around $5,723 in taxes each year. This amount is actually lower than the national average.

Capital building in Kentucky with pink flowers


Is Kentucky an affordable place to live?

Kentucky is an incredibly affordable place to live. Whether it's housing or transportation, almost all aspects of living in Kentucky are lower than the national average.

What are the main pros of moving to Kentucky?

Some of the main reasons why people move to Kentucky are because of the low cost of living, centralized location, rich cultural history, great sports scene, affordable housing and so much more. 

Is it worth moving to Kentucky?

Each city in this state has something unique to offer, whether it's the excitement of big-city life or the charm of a small town. The state as a whole boasts a vibrant culture that is reflected in its people, cuisine, and traditions.

What part of Kentucky is the cheapest to live in?

Some of the most affordable cities in Kentucky are Middlesboro, Ashland, Henderson, Owensboro, and Glasgow. Check out the homes for sale!

Is hunting popular in Kentucky?

Kentucky is known to be a great state for hunting and offers opportunities for deer, elk, bear, and small game like rabbits, squirrels, quail, and grouse. If you are looking for a big buck state, then Kentucky is a great option and is one of the top starts in the country to Boone and Crockett bucks. 

Buildings in downtown area with flags in front

Cost of Living in Kentucky - The Bottom Line

Full of southern charm and vibrant sceneries, Kentucky is home to many festivals, arts, traditions, and so much more that you should not miss out on. 

Known for the rich history this state holds, it is also a popular option for those who are interested in sports, hunting, and food. Not only does it have such a bustling scene, but it also has a low cost of living, affordable housing, and low crime rates. 

There are many reasons why people love this state. If you are looking for somewhere to live where you will feel like you are at home, Kentucky is for you. Beautiful views, friendly residents, and many things to do are some of the main reasons why people love living here. 

If you or anyone you know is interested in moving to Kentucky, please get in in touch with us so we can connect you with one of our Realty Specialists to help you with this transition. 

No matter location, price, or preferences, we are here to help you through every step of the home buying process to ensure we find you the perfectn home that meets all of your needs and lifestyle perfectly. 

Please feel free to contact us here today for any questions or help. 

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Ryan Fitzgerald

Ryan Fitzgerald

Hi there! My name is Ryan Fitzgerald, and I am a REALTOR®. My goal is to help you learn more about real estate through our Real Estate Blog! Hopefully, you enjoyed the above blog post and it found a way to provide help or value to you. When you're ready to buy or sell a home of your own let us know here. Please feel free to join the conversation by dropping us a comment below.

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