What's the Cost of Living in New Mexico?

Are you considering moving to New Mexico and want to learn more about the actual cost of living? Let's take a look at the overall cost of living, average household income, real estate, and other expenses.

Known as the Land of Enchantment, it is no surprise that over 350,000 people have chosen to move to New Mexico over the past five years.  

Offering endless opportunities for adventure, delicious restaurants, beautiful neighborhoods, a thriving economy, and prime real estate. New Mexico is a fantastic state to live in, with a wide variety of opportunities for people of all ages.

New Mexico has something for everyone, whether you're a young adult looking for job opportunities, a family looking to settle down, or a retiree seeking a peaceful place to spend your golden years. 

The moving process can be stressful and overwhelming, but understanding the cost of living is essential. This means looking at the accumulating costs from the average home cost to the cost of groceries. Each expense varies greatly depending on where you move to; that is why it is so important to learn these seven most important parts of the cost of living in New Mexico. 

Here is everything you need to know about the cost of living in New Mexico

Cost of Living

New Mexico is known as one of the most affordable states in the country. The cost of living is about 5% lower than the national average. This is a combination of various expenses like utilities, housing, transportation, and food. Remember that this percentage can vary based on factors such as your career, lifestyle, budget, and number of people in your home. 

If we look a little closer, compared to the national average, housing prices are 8% lower, utilities are 10% lower, food is 3% lower, healthcare is 2% lower, and transportation is 1% lower. The costs of your expenses are all up to you; you have the power to lower these even more depending on your budget. 

However, the cost of living in New Mexico is rising slightly each year as more people move to the beautiful state. Nonetheless, it is still relatively low, primarily due to the low housing prices. Whereas in most states, housing is the most costly expense. 

Each city or town in New Mexico has a different cost of living. For example,e Los Alamos is the most popular city and the most expensive. Take a look at the average cost of living in each of these sought-after cities, according to PayScale. 

Real Estate

New Mexico is a wonderful location to establish your roots and turn it into your permanent residence. With an extremely low cost of living, you will be able to spend all your extra cash on things you really want, with housing being one of the lower-cost expenses. 

There are many excellent choices to choose from, whether you want to live in a bustling city or a rural home on a beautiful piece of land. Finding the perfect area to live is vital when moving to a new state. There are many amazing neighborhoods available in each city, like Albuquerque. 

The median home price is around $363,300, although this can change throughout the year depending on many factors. In the last year, home prices have risen about 18.2%.

When buying a home, location is essential, so ensure that your new area has everything you want and need, whether that be proximity to jobs, school districts, or recreational activities. The most competitive cities in New Mexico include Albuquerque, Los Alamos, White Rock, and Bernalillo. 

Income

New Mexico has been among the top job gainers in the country since June 2023, adding 7,300 jobs in that month alone. Over the last year, New Mexico has added 20,900 jobs, according to the Department of Workplace Solutions. 

According to the U.S. Census Bureau, the median household income from 2017-2021 was about $54,020. This is higher than the recommended annual income for a resident living in New Mexico. The persons in poverty percentage was around 17.6%.

New Mexico has a rich history of mining and ranching. Over the years, the job market has diversified, and major industries have shifted towards energy, aerospace and defense, healthcare, logistics and transportation, tourism, and food. If you are searching for job opportunities in a different industry, there are still plenty of options available.

The largest employers in New Mexico include the New Mexico State Government, Sandia National Laboratories, the University of New Mexico, and Presbyterian Healthcare Services. 

Many residents choose to work from home so they can take advantage of the beautiful community, landscape, and comfort. Of course, keep in mind that the average annual income will vary greatly depending on your career, experience, and more. 

Food

Food costs are one of the most overlooked expenses out of all the cost of living factors. Although, average grocery costs can vary greatly depending on your area. It is important to take into account how the average food costs in your new area will impact your overall cost of living. 

As an essential expense, it will significantly impact your overall cost of living. On the bright side, food costs in New Mexico are about 3% lower than the national average. In New Mexico, the average family of four will spend about $9,297, and a single adult will spend about $3,240 on food annually. 

If you aim to cut down on your food expenses, it's crucial to plan your budget wisely. This means limiting eating out, as making food at home will reduce your food expenses greatly. However, New Mexico is known for its delicious restaurants. So, when you want a great night out and a delicious meal, make sure to check out these top restaurants in New Mexico. 

• Buckhorn Saloon and Opera House: Located in Pinos Altos, this restaurant features live music, open mic nights, and a variety of mouthwatering dishes, including their famous green chile stew. 
• Blue Window Bistro: Check out this spot for lunch and dinner, where you can enjoy fresh, made-from-scratch food in a casual atmosphere. 
• M'Tucci's Moderno: Voted one of the best restaurants in Rio Rancho, this restaurant focuses on providing fresh and flavorsome Italian cuisine. 

Taxes

New Mexico has a 5.0 percent state sales tax rate, a max local sales tax rate of 3.813 percent, and an average combined state and local sales tax rate of 7.72 percent. The state's tax system ranks 22nd overall on the 2023 State Business Tax Climate Index, meaning it is average compared to other states in the country. 

If you make around the median household income of $54,020, you will be taxed around $6,456 per year. This means the average tax rate would be 8.74%, and the marginal tax rate would be 12%, which is just around the national average.

New Mexico is known to have the lowest property tax rates in the country, with an average effective property tax rate of 0.73%. 

If you are a retiree, this might be the perfect state for you as it is a moderately tax-friendly state. Social Security income is partially taxed, withdrawals from retirement accounts are partially taxed, and wages are taxed at normal rates. 

Transportation

Transportation costs are only 1% lower than the national average. There are many public transportation options for residents and visitors alike in NM. The New Mexico Department of Transportation's Transit and Rail Division provides all the information for transit providers. 

On average, a resident pays about $1,275 on car insurance premiums, which is less than the national average of $1,517. Yearly, the average single adult in New Mexico pays about $9,746 for transportation. This is a combination of gas prices, car insurance, and bus and train fares. 

There aren't many public transportation options to take you from city to city in New Mexico. However, large cities like Alburquerque have various public transportation options like the Alvarado Transportation Center, which houses train and bus travel. 

The state is working to improve its public transportation options, starting with North Central New Mexico, where they are modernizing their facilities and buses to improve connectivity. 

Healthcare

Healthcare costs in New Mexico are about 2% lower than the national average. It's important to keep in mind that healthcare costs can differ significantly, ranging from affordable to very expensive. The ultimate price is influenced by various factors such as location, the kind of coverage selected, age, and medical needs. It's crucial to find the most appropriate rates to ensure that your healthcare expenses are within your budget. 

In 2020, the average single adult spent about $6,886 on healthcare. A family of four would spend about $19,185 on healthcare annually. Again, this will vary greatly depending on your health and where you go for healthcare. 

There are several highly-rated hospitals in the state, including Presbyterian Hospital in Albuquerque, Eastern New Mexico Medical Center in Roswell, and Memorial Medical Center in Las Cruces. No matter where you live in the state, you can rest assured that a great medical facility will take care of you and your loved ones. 

FAQ: Cost of Living in New Mexico

Here are some commonly asked questions about the cost of living in New Mexico.

Is it expensive to live in New Mexico?

Compared to other states around the country, New Mexico is much less expensive. Depending on what area you live in, the typical expenses are less costly than the national average. Some of the more popular cities, like Los Alamos, do have a higher cost of living, but still relatively inexpensive. 

Is it cheaper to live in Texas or New Mexico?

Both states are affordable places to live compared to the national average. However, the overall cost of living is higher in Texas than it is in New Mexico. 

Is the state of New Mexico a good place to retire?

New Mexico is a popular retirement destination, primarily due to the abundance of activities, low cost of living, warm climate, and rich culture. It is known as one of the best places for military retirees as well. 

Why are people moving to New Mexico?

People from all over the country are attracted to New Mexico for the low cost of living and median home price. On top of this, the state has a vibrant art scene, diverse cuisine, and many outdoor activities. 

Why is New Mexico land so cheap?

The low cost of land is mostly due to the low population density in the state. With a population density of just 17 people per square mile, it is the main reason why the land is so cheap. 

Moving to New Mexico - Our Last Words

Upon moving to New Mexico, you will quickly understand why so many are drawn to this beautiful state, from beautiful snowy mountain peaks to incredible sites at the National Parks. New Mexico really is one of the best places to live in the country.

Understanding the cost of living is vital before moving to a new state, as your typical expenses will vary greatly depending on where you live. Luckily, the overall cost of living is relatively affordable, meaning not only will you be able to live in a beautiful place, but you'll most likely spend much less than you would somewhere else. Many of the cities across NM have a low cost of living, including Santa Fe and Albuquerque. 

If you find that New Mexico may not be for you, make sure to check out surrounding states with relatively low costs of living, like Texas, Arizona, and Colorado. 

There are many things to look for when buying a house. To ease the transition, feel free to contact one of our highly qualified real estate specialists to help you along the process. Our team at UpHomes is dedicated to helping you find the home of your dreams. Don't forget to check out the beautiful homes for sale in New Mexico.