An outdoor paradise with four lakes, many parks and playgrounds, and plenty of bike trails, Madison is the capital city of Wisconsin and the second largest behind Milwaukee, named after James Madison, the 4th president. The University of Wisconsin–Madison, the Overture Center for the Arts, and the Henry Vilas Zoo are a few of the reasons why Madison is a great place to live. Nine National Historic Landmarks reside in Madison, including several buildings designed by architect Frank Lloyd Wright.
Madison is the fastest-growing city in Wisconsin and home to major companies, including Epic Systems, American Family Insurance, Exact Sciences, Promega, American Girl, Sub-Zero, and Lands' End. A number of factors influence how much it will cost you to live in Madison, such as the size of your household, the neighborhood you will be moving to, and your overall lifestyle. This guide will help you determine if Madison is an affordable place for you to live.
The cost of living index is based on the national average, which is set at 100. A city with a cost of living index of 90 has a cost of living 10% below the national average. A city with a 110 cost of living index has a cost of living 10% higher than the national average. There are several factors that go into determining the cost of living index, including housing, healthcare, groceries, utilities, transportation, and more. You can compare the cost of living index in Madison to where you’re living now to see how affordable Madison will be for you.
The Madison cost of living index is 107, just 7% higher than the U.S. average. This means Madison is not an expensive city to live in. Two significant factors contributing to the slightly higher cost of living in Madison are healthcare, which is 22% above the national average, and housing, which is 13% higher than the national average.
The Consumer Price Index (CPI) is what the Bureau of Labor Statistics (BLS) uses to measure the average change over time in the prices of what we spend money on daily. The Madison consumer price index in the Midwest Region of the U.S. advanced 0.5% in February 2023, according to the BLS. All items less food and energy index increased 0.6% over the month and 5.0% over the past year. Food prices increased 0.3% over the month and 10.2% over the past year. Energy prices have risen 2.8% over the past year but decreased 1.0% in the last month, due mostly to falling natural gas service prices.
The Consumer Expenditure Surveys (CE), maintained by the BLS, provide data on expenditures, income, and demographics of consumers in the United States. There are two surveys: the Interview Survey for major and/or recurring items and the Diary Survey for more minor or frequently purchased items.
CE in the Chicago Metropolitan Area — 2020-21, which includes the Chicago-Naperville-Elgin, IL-IN-WI, metropolitan area, shows an average spending of $66,901 per year, only slightly higher than the $64,187 average expenditure level for households in the United States. Housing costs averaged $24,941, which was 37.3% of the area’s household budget, significantly higher than the U.S. average of 34.3%. Transportation costs accounted for 13.8%, or $9,255, of the household budget, a little less than the national average of 16.2%. The portion of the household budget spent on food was 13.0%, or $5,642, close to the 12.2% national average.
Can you afford to live in Madison? A great way to find out is by using the Family Budget Calculator on the Economic Policy Institute (EPI) website. The average expenses for a family of 2 adults and 2 children living in the Madison Metro Area are $7,658 per month or $91,895 a year. Here is the breakdown of monthly and annual costs:
|Monthly Cost||Annual Cost|
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The chart below shows the estimated amount you will have to spend on common household items, food, gas, the average cost of utilities in Madison, and other expenses that make up the Madison cost of living index.
|Steak ribeye, 1 pound||$15.92|
|Milk whole 1/2 gallon||$2.27|
|Eggs 1 dozen, Grade A||$1.29|
|Potatoes 5 pound bag||$2.90|
|Bread wheat, 1 loaf||$3.80|
|Beer Heineken 6 pack||$8.43|
|MovietTicket 1st run||$10.93|
|McDonald's burger 1/4 pounder||$5.33|
|Average cell phone bill||$182.84|
|Average cost of gasoline per gallon||$2.597|
|Average Madison utilities||$179.45|
Madison public transportation is offered via the city. The City of Madison Metro Transit system bus fares cost $2.00 per adult, $1.25 for youths ages 5–17, and $1.00 per senior and disabled rider. Children under 5 ride for free. The average car insurance premium in Madison is $1,236.
The Madison real estate market is somewhat competitive. Madison real estate prices were up 6.8% in February 2023 compared to last year. The average home price in Madison is $370,000. Homes in Madison sell after 43 days on average, compared to 43 days last year. By comparison, the average price for a home in Milwaukee is $160,000, and the median price for a home in the state is $339,900.
The average rent in Madison is $1,567 for an 840-square-foot apartment and can greatly depend on the unit type, location, and number of bedrooms. If you’re debating whether to buy or rent in Madison, you can use the price-to-rent ratio to help with your decision. The calculation is:
Median Home Price ÷ Median Annual Rent = Price-to-Rent Ratio.
A higher ratio is better for renters, and a lower ratio is better for buyers. A ratio of 1 to 15 means it’s much better to buy than rent. A ratio of 16 to 20 means it’s typically better to rent than buy. A ratio of 21 or more means it’s much better to rent than buy.
The price-to-rent ratio in Madison is: $370,000 ÷ $18,804 = 19.7.
Based on the price-to-rent ratio, it’s better to rent than to buy in Madison.
Madison has some great, family-friendly neighborhoods, excellent higher education opportunities, and a growing tech industry. Here are two of the best, safest, and most desirable neighborhoods to consider when moving to Madison:
The Hill Farms-University neighborhood is perfect for singles, families, and young professionals. The community is safer than 81% of Madison’s neighborhoods, and the median home price is only $274,000. The streets are tree-lined with ranch and Colonial-style homes and mid to high-rise apartments. Rennebohm Park, Hilldale Shopping Center, and the Hilldale Farmers’ Market are close by for shopping and outdoor activities.
The quiet neighborhood of Walnut Grove is one of the safest neighborhoods in Madison, with top-rated schools, making it ideal for families. Home prices average $286,300. The neighborhood features walking and biking paths, and nearby parks, including Walnut Grove Park. For your dining and shopping needs, many local restaurants, Prairie Towne Center, and West Towne Mall are minutes away.
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The average size for an apartment in Madison is 840 square feet, but this number varies greatly depending on location, number of bedrooms, and unit type. The average apartment rent in Madison is $1,567 per month. You can find a variety of apartments in the city.
The most affordable neighborhoods in Madison are:
The most expensive neighborhoods in Madison are:
The most popular neighborhoods in Madison are:
Out of Reach estimates the hourly wage in each state that a full-time worker must earn to afford a modest rental home without spending more than 30% of their income on housing. In Wisconsin, working at minimum wage, $7.25/hr, you would have to work 82 hours a week to afford a modest 1-bedroom rental home. If you spent approximately 30% of your income on rent, you could afford to pay $669 per month in rent, which is less than half of the average rental cost in Madison.
The median household income in Madison is $70,466. According to Payscale, the average income in Madison is $71,000 a year. Madison wages increased by 1.7 percent in Q4 2022. The average salary in Madison for some of the most popular occupations are:
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Compare how much you’ll pay in taxes in Madison to where you’re living now. Here is some helpful tax information you’ll need when looking to move to Madison:
The state income tax rate in Wisconsin range from 0% to 7.65%.
The sales tax in Madison is as follows:
The Dane County Treasurer's Office collects property taxes for Madison. The Madison property tax in Dane County is $4,149 per year for a home valued at $230,800. Dane County collects average Madison property taxes of 1.8% of a property's assessed fair market value as property tax.
The Madison cost of living is 63% lower than in Chicago. Here are some comparisons of food, housing, healthcare, and utilities between Madison and Chicago.
Although the cost of living in Madison is 7% higher than the national average, it is an affordable city to live in, especially when compared to other big cities in the Midwest, such as Chicago. With a growing job market, good schools, lots of outdoor spaces, and quiet, family-friendly neighborhoods, Madison more than makes up for the slightly high cost of living. When you’re ready to move to Madison, call Dairyland Moving at 608-856-6683 for a free quote. Let our professional, affordable Madison movers take care of you.
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