Is it cheaper to live in Ann Arbor or Montgomery?

Montgomery, AL is cheaper. Its monthly baseline of $1,020 (1BR rent + utilities) runs about 37% below Ann Arbor, MI's $1,630, mainly because of rent.

How much more do you need to earn to live in Ann Arbor than in Montgomery?

To keep rent near the recommended 30% of gross income, you'd want to earn roughly $56,000 a year in Ann Arbor versus $33,000 in Montgomery.

Which has lower taxes, Ann Arbor or Montgomery?

Ann Arbor is taxed under Michigan's rules (a top state income tax rate of 4.25% and a 6% state sales tax); Montgomery under Alabama's (a top state income tax rate of 5.00% and a 4% state sales tax).

Ann Arbor vs Montgomery Cost of Living 2026

Ann Arbor

Michigan

$1,630/mo est.

Montgomery

Alabama

$1,020/mo est.

Monthly estimate = 1BR rent + electricity + gas

A one-person monthly baseline (1BR rent plus typical utilities) runs $1,630 in Ann Arbor, MI versus $1,020 in Montgomery, AL. Overall, Montgomery, AL is roughly 37% cheaper to live in day-to-day than Ann Arbor, MI, driven mainly by rent.

Median household income is $81,089 in Ann Arbor, MI and $55,687 in Montgomery, AL — about 31% higher in Ann Arbor, MI. Michigan has a top state income tax rate of 4.25% and a 6% state sales tax; Alabama has a top state income tax rate of 5.00% and a 4% state sales tax.

Ann Arbor, MI

Montgomery, AL

Rent

Studio

$1,274

$864

+32% in Ann Arbor, MI

1 Bedroom

$1,389

$831

+40% in Ann Arbor, MI

2 Bedroom

$1,692

$982

+42% in Ann Arbor, MI

3 Bedroom

$1,812

$1,172

+35% in Ann Arbor, MI

Buying a Home

Median Home Value

$435,100

$148,500

+66% in Ann Arbor, MI

Income

Median Household Income

$81,089

$55,687

+31% in Ann Arbor, MI

Metro Median Wage (annual)

$55,380

$44,950

+19% in Ann Arbor, MI

People & Lifestyle

Median Age

27.7 yr

36.2 yr

+8.5 yr in Montgomery, AL

Homeownership

45.6%

54.3%

+8.7 pp in Montgomery, AL

Bachelor's+ (25+)

77.7%

33.5%

+44.2 pp in Ann Arbor, MI

Avg Commute

19.9 min

20.5 min

+0.6 min in Montgomery, AL

Crime (per 100k/yr)

Violent Crime

311

605.5

+95% in Montgomery, AL

Property Crime

1,744.5

2,258.3

+29% in Montgomery, AL

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

Climate

Avg Annual Temperature

47.7°F

65.1°F

+17.4°F in Montgomery, AL

Annual Precipitation

32.8 in

53.1 in

+20.3 in in Montgomery, AL

Gas

Regular Gasoline

$3.85/gal

$3.62/gal

+6% in Ann Arbor, MI

Area: Midwest (PADD 2) vs Gulf Coast (PADD 3).

Utilities

Electricity (¢/kWh)

23.0

16.4

+29% in Ann Arbor, MI

Natural Gas ($/MCF)

$19.72

$24.06

+22% in Montgomery, AL

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

Groceries

Milk (gal)

$4.31

$4.00

+7% in Ann Arbor, MI

Bread (lb)

$1.66

$1.75

+5% in Montgomery, AL

Eggs (doz)

$3.63

$2.21

+39% in Ann Arbor, MI

Ground Beef (lb)

$6.77

$6.45

+5% in Ann Arbor, MI

Chicken (lb)

$2.10

$1.90

+9% in Ann Arbor, MI

Bananas (lb)

$0.62

about equal

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

State Taxes

Sales Tax (MI / AL)

+2.0 pp in MI

Income Tax (top rate)

4.25%

5.00%

+0.8 pp in AL

Ann Arbor vs Montgomery — FAQ

Is it cheaper to live in Ann Arbor or Montgomery?: Montgomery, AL is cheaper. Its monthly baseline of $1,020 (1BR rent + utilities) runs about 37% below Ann Arbor, MI's $1,630, mainly because of rent.
How much more do you need to earn to live in Ann Arbor than in Montgomery?: To keep rent near the recommended 30% of gross income, you'd want to earn roughly $56,000 a year in Ann Arbor versus $33,000 in Montgomery.
Which has lower taxes, Ann Arbor or Montgomery?: Ann Arbor is taxed under Michigan's rules (a top state income tax rate of 4.25% and a 6% state sales tax); Montgomery under Alabama's (a top state income tax rate of 5.00% and a 4% 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).