What's the Cost of Living in Lexington, KY?

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

Lexington, located in the heart of the state, is famous for its horses and bourbon. The city is abundant in culture and history.

Lexington offers residents a plethora of amenities and activities, making it one of the best places to live in the state.

This city has a population of 321,793 and is a desirable place to live due to its affordable cost of living, stunning scenery, and lively community.

Lexington boasts a diverse economy that has led to growth and prosperity in multiple sectors such as housing, education, and the job market. It is an ideal destination for those seeking a new place to study, work, or simply admire the natural beauty.

If you're looking for a vibrant city to relocate to, explore the stunning homes for sale in Lexington and all real estate options in Kentucky.

Keep reading to learn more about the cost of living in Lexington. 

Cost of Living Lexington

Lexington is becoming a popular choice for many due to its affordable living. The cost of living in Lexington is 6 percent lower than the national average. 

The cost of living can vary depending on several factors. Various categories, such as housing, utilities, groceries, and transportation, determine it. 

Housing expenses in this area are 24% lower than the national average. However, utility prices are 8% higher. On the bright side, transportation costs such as gas prices and bus fares are 3% lower, food expenses are 7% lower, and healthcare costs are 18% lower when compared to the national average.

When calculating the cost of living, it's important to consider income and current living situation. Compared to other cities of similar size, this city is relatively affordable. However, it's worth noting that it's one of the pricier cities in Kentucky.

To provide you with a better understanding of the cost of living in Lexington, here are some of the typical median prices for various items in the city. 

Sourced from Payscale. 

Real Estate

Many people are choosing to move to Lexington because of its affordable housing expenses, which are 24% lower than the national average.

The average cost of a home is $343,145, while the average monthly rent is $1,043. It is important to note that these figures vary depending on the location and size of the property. 

Lexington has 116 distinct neighborhoods, each with varying home sizes, styles, and ages. It's a great place to find affordable homes for sale.

Since July 2023, the median listing price has increased by 8% YoY, creating a seller's market with more demand than supply.

It is worth noting that in this area, homes typically stay on the market for around 70 days. However, since this is a highly sought-after location, it is best to keep a close eye out if you are planning to relocate here. 

If you are intersted in this city, explore the available single-family homes, new-construction homes, and condos that are currently up for sale in the area, as well as the best neighborhoods in Lexington. 

Income

The average annual salary in the Lexington area is $50,030, which is slightly lower than the national average but still ranks high. 

The median household income, according to the Census Bureau, in this city is $61,526, which is higher than the state median income of $55,454. There are sadly, about 15 percent of the population in Lexington, while there are about 17 percent of the population in Kentucky in poverty. 

The city of Lexington has a thriving and stable economy thanks to its diverse range of industries. From healthcare and technology to agriculture, these industries provide many employment opportunities.

Several prominent companies and headquarters are located in the region. Furthermore, the job market in Lexington is stronger than in other similarly sized metro areas.

The unemployment rate in Lexington is 6 percent, which is lower than the national average, which is almost 9 percent. If you are looking for a thriving location that is on the rise, then Lexington could be the perfect place for you to relocate to. 

Utilities

In Lexington, the average cost of monthly utilities for an apartment or common living space is around $420, including $200.60 for energy bills, along with heating, water, garbage, and other common utilities. 

The utility bills here are like other cities in Kentucky. The primary electricity supplier here is the Kentucky Utility (KU), which is based in the city. 

Electricity in Lexington costs $0.09 per kWh, resulting in an average monthly cost of $102. Internet can cost up to $50 per month. 

Utility bills will fluctuate based on home size, season, and usage.

Food

Food expenses are 7 percent lower than the national average in Lexington. Food costs will vary from person to person depending on the size of the family, where you grocery shop, how much you eat out, and what diet.

On average, a single adult will spend about $2,900 annually on food, while on the other hand, a family of four will spend almost $9,000 annually. These numbers are more affordable than the national average. 

Budgeting is a very important thing to do if you want to lessen the costs for this cost of living category. Depending on where you shop as well can have a huge impact on how much you spend on food costs a month so make sure you find the best deals. 

On the other hand, grocery costs are less than the national average. So, on the plus side, food is more affordable here, and it won't break your break. 

Healthcare

On average, healthcare costs are 18 percent lower when compared to the national average. Most residents in Lexington get coverage from Medicaid and Medicare through the ACA and other federal healthcare coverages. 

Health insurance premiums are about $470, and generally, employers are required to contribute at least 50 percent of the costs. So, per month, in Lexington, you will spend about $235 per month. 

However, Kentucky does offer free health insurance through programs for low-income residents, so if you can not afford healthcare insurance, then do not worry because there are programs to help with this. 

Just to let you know, health insurance costs are unique to each individual, and in the state of Kentucky, the average cost per person is approximately $7,111. Finding the best affordable plans is important to lowering the cost of living. 

Transportation

Transportation through Lexington is not very expensive, especially since it is a metropolitan area. For public transportation, Lextran operates a fleet of buses through several routes through the city and through the campus.

Transportation costs such as gas prices and bus fares are 3% lower. If you decide to own your own vehicle, costs will vary depending on the services, maintenance, gas, and other things. 

About 91 percent of commuters drive to work, which is more than the national average. Taking into account all the costs that go into owning your own vehicle, you will spend about $2,100 a month on just insurance and gas. 

According to the data from the EPI, the average single adult in the state will spend about $10,292 a year on transportation as a whole. 

The main bus fares are $1 and include unlimited transfers on one-way trips. You can also get a day pass, a month pass, and even a student pass. Lexington is a budget-friendly city due to its ease of travel and lower prices compared to similarly sized cities.

Taxes

The minimum combined 2023 sales tax rate in Lexington is about 6 percent. That is the total of state, county, and city sales tax rates since Kentucky's rate is 6 percent. 

Residents and nonresidents pay a flat county income tax rate of 2.25 percent. Property taxes vary based on assessed value.

The state of Kentucky does rank 18th overall on the 2023 State Business Tax Climate. Some things do 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 vehicle usage tax is paid. 

After accounting for all of the state and federal income states as well as other contributions, the average working adult will pay around $5,723 in taxes each year in Kentucky which is lower than the national average. 

You can also check out the cost of living in Kentucky to compare the costs and taxes on the state-wide level to have a better understanding of what you will pay in this state. 

It is important to remember that tax rates and regulations can change. Knowing up-to-date information on taxes is crucial, so make sure to check out the local government page.

FAQs

Is Lexington, KY, expensive to live in?

The overall cost of living in Lexington is lower than the national average, but it is slightly higher than the state average. Many parts of the overall cost of living are lower than the nation, which makes it one of the most affordable places to live in the US.

Why are people moving to Lexington, KY?

People are moving to Lexington because of the diverse economy, strong job sectors, education, and much more. This place has a high quality of life and something for everyone. 

Is Lexington, KY, a good place to move to?

Yes, Lexington offers the residents so much to do while also being an affordable state with a high quality of life. Lexington is also considered to be one of the best places to move to in Kentucky. 

Is Lexington or Louisville better to live in?

Both Lexington and Louisville have made it on the Best Places to Live, but Lexington was ranked number 24 while Louisville was ranked number 7, so Lexington is considered to be the better city to live in. 

Cost of Living in Lexington - The Bottom Line

If you're planning to moving to Lexington, you'll find plenty of affordable housing options in a vibrant area. You can browse through a variety of homes and select the one that is perfect for you.

Lexington is a charming city with a rich cultural and historical heritage. It has an affordable cost of living, breathtaking scenery, and vibrant communities.

Every community in this city has its own distinct charm that sets it apart. Regardless of your preferences, you find a neighborhood that suits your needs perfectly. 

Lexington, located in the heart of the state, offers a diverse economy and numerous amenities and activities for residents to enjoy. It is widely considered one of the top locations in the state.

If you or anyone you know is interested in searching for homes for sale in Lexington, please get in touch with us here so we can connect you with one of our Realty Specialists to help make this transition for you go smoothly. 

No matter the location, price, or prefrences, we are here to help you through every step of the home-buying process to ensure we find you the perfect home that meets all of your needs. 

Feel free to contact us here today.