What Is The Cost Of Living In Ann Arbor, MI?

Ann Arbor is one of the most vibrant, dynamic cities in the Great Lakes area. Home to the well-known University of Michigan, Ann Arbor also houses Michigan Stadium, the largest football stadium in the country. If you have a passion for education, culture, and sports, this city is the right place for you.

Rating at 117.5 on the cost of living index with a US average of 100, Ann Arbor is not a cheap place to live. This university town is the second most expensive city in Michigan, next only to East Lansing. Housing costs are one of the highest in the nation owing to high demand and zoning decisions made decades ago.

The average home value in Ann Arbor is a hefty $401,979 compared to the US average of $247,084. This translates to a median price of $221 per residential square foot. The most expensive neighborhood is Angell, with a median home price of $1.2M.

There are 42 neighborhoods in Ann Arbor with median home prices ranging from $166,500 – $1.2M. Here is a chart to showcase the neighborhoods and their average home prices. The city’s homeownership rate is 44.8% which is much lower than the US average of 63.9%

Ann Arbor residents pay a combined sales tax of 6%, which is 1.3% less than the US average. There are no income tax brackets in Ann Arbor, and all filers pay a flat rate of 4.25%. Along with Michigan are 9 other states that pay a flat income tax rate, ranging from 3.07% – 5.25%.

Michigan property tax is referred to as millage and figured in mills which equate to 1/1000 of a dollar. Simply put, for every $1,000 in property value, a property owner pays $1 in taxes. In Ann Arbor, homeowners pay a millage of 39.5, which is slightly lower than the state average of 42.

In comparison, nearby Detroit pays a much higher 69.6 mills. However, this number does not in any way indicate the highest millage rate in the state. The most expensive property taxes in Michigan go to Ecorse, with a millage rate of 111.5.

There are more restaurants per person in Ann Arbor than there are in any other city in the US. With over 400 restaurants packed in a mere 28.8 square miles, this is a definite foodie town. The international student body drawn in by Ann Arbor’s top universities translates to international flavors offered in the restaurant scene.

If being in the kitchen is more your style, the chart below shows you the basic cost of grocery staples. Check out the item prices in Ann Arbor compared to key cities in the US.

Michigan drivers pay one of the highest car insurance rates in the country. The state abides by its unmatched no-fault insurance system, which provides crash victims with unlimited lifetime coverage of medical bills. Exorbitant insurance rates have caused residents to ditch insurance altogether, causing the state to place fourth nationwide for uninsured drivers.

Michigan residents pay an annual premium of $2,111, which is about 35% more than the national average of $1,592. Ohio, New Hampshire, and South Carolina pay the lowest car insurance rates in the country. Here is a quick comparison of the states with the highest car insurance premiums.

Ann Arbor public transit means navigating and relying heavily on its bus transit system, also known as “The Ride.” Over 1500 bus stops in this city of 28 square feet make bus-riding pretty convenient for residents. You may be able to get away with not owning a car because of the efficiency of its bus system.

Ann Arbor prides itself in being a bike-friendly city with 90.1 lane-miles of on-street bike lanes. The city is also highly walkable, with downtown being the most walkable neighborhood.

Ann Arbor is proud to house the best universities and top schools in the state of Michigan. The most-renowned would be the University of Michigan Ann Arbor campus, home to 45,000 students. The average tuition fee is about $16,000 for in-state students, but this number jumps to $51,000 for out-of-state.

Aside from its stellar universities, Ann Arbor is also rated one of the top 10 school districts in the state. The city’s average private high school tuition is $16,344 compared to the national average of $14,978. The most expensive private school is Rudolf Steiner, with an average tuition fee of $22,600.

Daycare costs are high in Ann Arbor, with an average annual cost of $8,744.

Related Questions

Is it safe in Ann Arbor?

Ann Arbor may not be the safest city in the country, but it ranks 6th safest city in Michigan. 49 residents out of 1,000 find themselves victims of crimes, which is low compared to Detroit’s 196 per 1,000 residents. The least unsafe area to walk alone late at night in Ann Arbor is on campus.  

What is the climate in Ann Arbor?

Ann Arbor gets an average of 36 inches of rain per year, close to the annual average of 38. The summer high in July is around 83°F, and the winter low in January is 17°F. The area does get 43 inches of snow in a year. 

How is healthcare in Ann Arbor?

Ann Arbor is home to some of the highest-rated medical care facilities in the nation. The University of Michigan Hospitals-Michigan Medicine tops the list, followed by C.S. Mott Children’s and the Ann Arbor VA.  Despite the easy access to excellent healthcare, Michigan residents rank in the bottom third in overall personal health.