Cost of Living in Minnesota — Housing, Taxes & Everyday Expenses
High taxes, strong economy, below-average housing costs
Data: 2026-Q2 · BLS · HUD · KFFOverview
Minnesota has high income taxes but below-average housing costs and a very strong economy. The Twin Cities metro is a major center for healthcare, finance, and retail.
Housing costs
Median 1BR rent in Minneapolis is approximately $1,400. The broader Twin Cities metro is $1,200-$1,500. Greater Minnesota is significantly more affordable.
1BR FMR across major Minnesota cities: $1,405 – $1,405/mo (HUD FY2026)
Tax reality
Minnesota has a top income tax rate of 9.85%, one of the highest in the nation.
Everyday expenses
At a cost of living index of 98, Minnesota is about 2% cheaper than the national average of 100. Minnesota's high income tax significantly reduces take-home pay at higher incomes, partially offset by below-average housing costs.
City comparison
Salary reality in Minnesota
Cost of Living in Minnesota — FAQ
What is Minnesota's income tax rate?
Minnesota has a top income tax rate of 9.85% on income over $183,340 (single). Middle incomes face rates of 6.8-7.85%.
Is Minnesota affordable?
Minnesota has a cost of living index of 98, near the national average. Housing is moderately priced despite being a major metro state.