Is it cheaper to live in Anchorage or Chicago?

Anchorage, AK is cheaper. Its monthly baseline of $1,320 (1BR rent + utilities) runs about 11% below Chicago, IL's $1,490, mainly because of rent.

How much more do you need to earn to live in Anchorage than in Chicago?

To keep rent near the recommended 30% of gross income, you'd want to earn roughly $42,000 a year in Anchorage versus $50,000 in Chicago.

Which has lower taxes, Anchorage or Chicago?

Anchorage is taxed under Alaska's rules (no state income tax and no state sales tax); Chicago under Illinois's (a top state income tax rate of 4.95% and a 6.25% state sales tax).

Anchorage vs Chicago Cost of Living 2026

Anchorage

Alaska

$1,320/mo est.

Chicago

Illinois

$1,490/mo est.

Monthly estimate = 1BR rent + electricity + gas

A one-person monthly baseline (1BR rent plus typical utilities) runs $1,320 in Anchorage, AK versus $1,490 in Chicago, IL. Overall, Anchorage, AK is roughly 11% cheaper to live in day-to-day than Chicago, IL, driven mainly by rent.

Median household income is $98,152 in Anchorage, AK and $75,134 in Chicago, IL — about 23% higher in Anchorage, AK. Alaska has no state income tax and no state sales tax; Illinois has a top state income tax rate of 4.95% and a 6.25% state sales tax.

Anchorage, AK

Chicago, IL

Rent

Studio

$1,001

$1,186

+18% in Chicago, IL

1 Bedroom

$1,052

$1,258

+20% in Chicago, IL

2 Bedroom

$1,433

$1,406

+2% in Anchorage, AK

3 Bedroom

$1,952

$1,554

+20% in Anchorage, AK

Buying a Home

Median Home Value

$375,900

$315,200

+16% in Anchorage, AK

Income

Median Household Income

$98,152

$75,134

+23% in Anchorage, AK

Metro Median Wage (annual)

$60,200

$54,720

+9% in Anchorage, AK

People & Lifestyle

Median Age

34.9 yr

35.7 yr

+0.8 yr in Chicago, IL

Homeownership

63.7%

45.5%

+18.2 pp in Anchorage, AK

Bachelor's+ (25+)

37.7%

43.3%

+5.6 pp in Chicago, IL

Avg Commute

19.0 min

33.5 min

+14.5 min in Chicago, IL

Crime (per 100k/yr)

Violent Crime

1,016.5

539.8

+47% in Anchorage, AK

Property Crime

2,796.2

3,489.9

+25% in Chicago, IL

FBI Crime Data Explorer. Offenses per 100,000 residents per year; agency reporting practices vary, so this is approximate.

Climate

Avg Annual Temperature

37.4°F

52.7°F

+15.3°F in Chicago, IL

Annual Precipitation

17.9 in

38.0 in

+20.1 in in Chicago, IL

Gas

Regular Gasoline

$5.09/gal

$4.29/gal

+16% in Anchorage, AK

Area: West Coast (PADD 5) vs Chicago.

Public Transit

Base Fare (one-way)

—

$2.50

Adult base one-way fare — — vs CTA (2026).

Utilities

Electricity (¢/kWh)

28.2

23.9

+16% in Anchorage, AK

Natural Gas ($/MCF)

$14.40

$15.39

+7% in Chicago, IL

Residential, state-level averages (EIA). MCF = 1,000 cubic feet.

Groceries

Milk (gal)

$4.82

$4.31

+10% in Anchorage, AK

Bread (lb)

$2.04

$1.66

+19% in Anchorage, AK

Eggs (doz)

$2.19

$3.63

+66% in Chicago, IL

Ground Beef (lb)

$7.36

$6.77

+8% in Anchorage, AK

Chicken (lb)

$2.01

$2.10

+4% in Chicago, IL

Bananas (lb)

$0.70

$0.62

+12% in Anchorage, AK

Average prices — West vs Midwest (BLS). Regional where available, otherwise U.S. average.

State Taxes

Sales Tax (AK / IL)

None

6.25%

+6.3 pp in IL

Income Tax (top rate)

None

4.95%

+5.0 pp in IL

Anchorage vs Chicago — FAQ

Is it cheaper to live in Anchorage or Chicago?: Anchorage, AK is cheaper. Its monthly baseline of $1,320 (1BR rent + utilities) runs about 11% below Chicago, IL's $1,490, mainly because of rent.
How much more do you need to earn to live in Anchorage than in Chicago?: To keep rent near the recommended 30% of gross income, you'd want to earn roughly $42,000 a year in Anchorage versus $50,000 in Chicago.
Which has lower taxes, Anchorage or Chicago?: Anchorage is taxed under Alaska's rules (no state income tax and no state sales tax); Chicago under Illinois's (a top state income tax rate of 4.95% and a 6.25% state sales tax).

Sources: US Census Bureau, ACS 5-Year (rent, income, home value, demographics); NOAA Climate Normals 1981–2010 (climate); EIA weekly retail (gas); Tax Foundation 2026 (state taxes).