What Is The Cost Of Living In Montana Vs. California?

Jessica Stone
by Jessica Stone

In recent years, we’ve seen numerous Californians leave the state in search of more affordable housing, lower tax rates, and overall better quality of life. Montana is one such state that residents of California are heading to. With its low population density, beautiful landscapes, unspoiled land, minimal traffic, and abundant outdoor recreational activities, there is much to love about the state of Montana. However, when you compare Montana versus California, how do these two states stack up in terms of cost of living?

The cost of living index in Montana is 94, meaning it is about 6% more affordable to live in Montana than the national average (100). California, on the other hand, has a cost of living index of 149.9, so it is significantly more expensive than both Montana and the national average. Montana’s median home price is $353,700, which is only about 21% higher than the national average of $291,700. Meanwhile, the median home price in California is $684,800 – a staggering 135% higher than Montana.

Aside from median housing prices, let’s take a deeper look at how the cost of living compares in Montana vs. California.

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Housing Market in Montana vs. California

When you consider the fact that the median home price in Montana is just $353,700, it is much more cost-effective to purchase a home here than in the state of California. In fact, you can expect to spend close to double the amount on a home in California, with the median home price of nearly 700,000.

Like most other places in the U.S., the Montana housing market boomed as a result of the COVID-19 pandemic last year. Although the housing shortage began in Montana several years ago, it was only exacerbated by the pandemic. Now, with so many people returning to the state and moving to Montana, there is a lot of buyers but not enough homes.

In 2021, the median home prices in Montana have increased simply due to supply and demand. Aside from more buyers than houses, multiple offers on a property has also contributed to the prices increasing even more. A similar situation is happening in California, although the affordable housing crisis has been going on for quite some time.

While the competition may be intense in both states, it is still much cheaper to buy a home in Montana than California. The median home price in California reached a record high in May of 2021 and, as a result, residents are heading to more rural locations in California or leaving the state entirely in search of more affordable housing.

Home Prices in Montana vs. California Comparison

Median home prices ultimately come down to the specific city and county that you live in a particular state. They vary quite a bit across both Montana and California. The table below displays some of the major cities in Montana and California, along with their applicable median home prices:

City Median Home Price
Los Angeles, CA$883,400
San Francisco, CA$1,471,200
San Diego, CA$812,100
Billings, MT$285,600
Missoula, MT$459,400
Great Falls, MT$232,100

As you can see in the table above, more affordable home prices are a major benefit of living in Montana. Of course, prices will vary based on the specific city that you live in. For example, the median home price in Missoula, Montana is $459,400, while the median home price in Great Falls is just $232,100 – well below the national average.

While home prices in Montana may be slightly higher than some other states in the country, they are over 100 percent cheaper than California.

Rent Prices in Montana vs. California

Rental prices are usually higher in states that have higher incomes. In fact, the states with the top five highest average rents are among the ten highest-earning states in the country. With a statewide average rent of $1,503, California takes the second slot on the list of the highest average rental prices in the U.S.

However, there are about twenty-one states that have average rents below $1,000. West Virginia has the lowest average rent in the country, followed closely behind by Montana with an average rent of $678 a month. States with the lowest rental prices – Montana included – also tend to have the lowest overall costs of living.

With that said, examine the following table for the average rent in some of the various cities across the state of Montana:

City Average Rent
Billings, MT$1,012
Missoula, MT$1,035
Great Falls, MT$982
Bozeman, MT$1,250
Butte, MT$789

Again, California has the second-highest average rent in the country, but rental prices vary based on the city that you live in. Though, some cities in California – such as Los Angeles and San Francisco – boast the highest recorded apartment rental rates in the U.S. Refer to following table for a more comprehensive look at the average rental prices you can expect in some of the most popular cities in California:

City Average Rent
Los Angeles, CA$2,518
San Francisco, CA$3,102
San Diego, CA$2,433
Long Beach, CA$2,333
Santa Clarita, CA$2,306
San Bernardino, CA$1,575

Taxes in Montana vs. California

There are some significant differences between the taxes in Montana versus the taxes in California, emphasized in detail below.

State Income Tax

Montana has what’s known as a progressive state income tax, meaning you pay based on your income. As such, there are higher rates for higher income earners and lower rates for lower income earners. Montana has seven income brackets in total, with rates ranging from as low as 1% to a top marginal rate of 6.9%. Although the bottom rate is considered low on average, the top marginal rate is fairly high.

Like Montana, California also has a progressive state income tax. The state has ten income brackets in total, starting at 1% as well but reaching 13.3% for the highest income earners. California’s top marginal rate is the highest in the U.S., but only applies to those that make over $1 million in taxable income.

Sales Tax

While most states charge a sales tax on goods and services, California has a very unique method. At 7.25%, California has one of the highest minimum sales tax rates in the country. But, this rate only applies to less than a quarter of the cities in California. Because of the additional city and county sales taxes, you pay as much as 10.5% in sales tax. For example, Los Angeles County’s sales tax is 9.5%, but if you head over to Glendale (located in LA County) the rate is a whopping 10.25%.

On the other hand, residents of Montana enjoy no sales tax. This means that the state does not collect any sort of sales tax – at the state or local level. In fact, the lack of sales tax can be seen as one of the most significant financial benefits of living in Montana over California.

Property Tax

Property tax rates below the national average are another reason why Montana can be considered a tax-friendly state. The average property tax collections in Montana are pretty low, with an average effective rate (property taxes as a percentage of home’s assessed value) of 0.83%. This is the 24th-lowest property tax rate in the nation.

Though, this is higher than California’s average effective rate of 0.73%, but both are lower than the national average of 1.07%. Passed in 1978, Proposition 13 set the maximum allowable property tax rate in California at 1% of the home’s assessed value. It also limited the increase in assessed value to 2% every year, unless the home had undergone construction or changed ownership.

This law has continued to help property tax payments in California stay underneath the national average.

Taxes in Montana vs. California Comparison

StateIncome TaxSales TaxProperty Tax
Montana1% – 6.9%None0.83% (average effective rate)
California1% – 13.3%7.25% – 10.50%0.73% (average effective rate)

Transportation Costs in Montana vs. California

Whether you decide to live in Montana or California, transportation costs must be considered in order to determine the cost of living in either state. Transportation costs include expenses such as gas prices, vehicle purchase prices, bus fares, transit passes, and other public transportation costs. Transportation costs in Montana are about 25% lower than the national average, likely due to the cheaper gas prices and public transportation costs.

With California’s transportation cost index of 133.1 and Montana’s transportation cost index of 75.2, these expenses are more affordable in Montana than California.

Cost FactorMontanaCalifornia
Gallon of gas$2.56$3.48
Monthly public transit pass$27.67$67.11
Taxi trip in downtown (approx. five miles)$17.50$17.42
New Volkswagen Golf$23,243$23,327

Entertainment & Miscellaneous Costs in Montana vs. California

Cost FactorAverage Price in MontanaAverage Price in California
Monthly local gym membership$53.32$47.20
Movie ticket$11.29$12.93
Pack of cigarettes$7.20$9.22
Domestic beer (1 pint)$3.79$5.83
Cappuccino (mid-range area)$3.99$4.39
Pair of running shoes$77.28$77.14
Fast food combo meal$7.54$8.29

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Montana vs. California: Which is More Expensive?

When you consider cost of living index, Montana sits below the national average and California comes in considerably higher than the national average. However, in comparing these two states together, Montana is about 37% cheaper than California. Most of Montana’s cost savings are contributed to more affordable housing costs, with homes costing nearly half the price in Montana compared to California.

However, in addition to housing, utilities, groceries and food, transportation costs, healthcare, childcare, and pretty much every other expense is more affordable in Montana than California.

Jessica Stone
Jessica Stone

Jessica considers herself a home improvement and design enthusiast. She grew up surrounded by constant home improvement projects and owes most of what she knows to helping her dad renovate her childhood home. Being a Los Angeles resident, Jessica spends a lot of her time looking for her next DIY project and sharing her love for home design.

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