5 Cities Where the Cost of Living Could Skyrocket in 2025

In many parts of the United States, the cost of living has skyrocketed. A major part of this is due to rising housing prices — purchases and rentals alike.

As of August 2024, the average home value was $361,282. The cost of renting an 899-square-foot apartment is just over $1,700 on average.

Some states, like Hawaii and Alaska, are much more expensive to live in than others. Generally speaking, the cheapest places are those in the South and Midwest, while the West Coast and Northeast are the most expensive.

While there’s no surefire way to know where the cost of living could skyrocket in 2025 and beyond, some financial and real estate experts have their predictions. These are the big ones.

Also here is the cost of living in every state.

Daniel Cabrera, a house flipper and the founder of Sell My House Fast SA TX, believes that the cost of living will skyrocket in Dallas.

“I’ve seen housing costs in North Dallas neighborhoods climb over 60% in under 3 years due to job growth and development,” he said.

A big reason for this, he said, is that Dallas is a tech hub where major investments in infrastructure have been made. These investments are attracting skilled workers and businesses alike, which has also led to limited housing supply. Following the law of supply and demand, this means higher prices, which can also affect property taxes and rents.

As per Zillow, the average home sales price is $313,158 in Dallas — up just 0.6% over the past year.

Miami is another city where the cost of living has already risen and is predicted to continue to do so. Dennis Shirshikov, an economics professor at the City University of New York, real estate professional and Head of Growth at GoSummer, offered several possible reasons for this.

“Miami’s appeal as a coastal city with no state income tax, combined with its growing reputation as a financial and tech hub, positions it for a significant increase in living costs,” he said.

There’s also been a surge of real estate buyers, which has driven up property prices.

But another key consideration is the threat of climate change, he said. Because of the environment and natural disasters in the area, taxes and insurance premiums are likely to continue to rise.

The average home value in Miami is $580,297. This is an 7.5% increase over the past year.

Garrett Ham, the CEO of Weekender Management in Arkansas, predicts the cost of living will continue to rise there as well.

“Limited housing supply against increasing demand results in higher costs of living overall,” he said. “I’ve watched this play out in Northwest Arkansas where I operate.”

While he didn’t specify which cities these might be, he did say that any second-tier cities where major infrastructure, arts and culture investments are planned could see significant price hikes.

“I’d keep an eye on cities lining up public-private partnerships to accelerate growth,” he said. “Real estate remains deeply cyclical, but in general, follow the jobs.”

Martin Orefice, the CEO of Rent to Own Atlanta, predicted that Atlanta will become significantly more expensive in the near future.

“Minneapolis, Minnesota and Atlanta, Georgia wouldn’t seem to have a lot in common, but they have one thing in common: Lots of new construction,” he said. “This is having the effect of helping to lower rents and housing costs, which in turn is giving people more spending money to make ends meet.”

The typical home value in Atlanta is $395,201. In Minneapolis, it’s $324,256.

The typical home value in Austin is $527,213. This is actually a 4.9% dip over the past year. Other costs — like apartment rentals — are still high, though.

“Austin has been on a meteoric rise, and I expect the cost of living to continue to skyrocket in 2025,” said Shirshikov. “The city’s booming tech industry…has attracted a significant influx of new residents.”

More people means more demand and competition for housing and other local resources. This, in turn, gives businesses — and homeowners — the opportunity to increase their prices.

Anything could happen to the housing market, so do your research before choosing a place to live. If you already live in an area where costs are high, or you want to move to one of the places on this list, just be prepared financially. Even if you’re overprepared — or if prices don’t skyrocket as these experts predict — you’ll be better off.