If you’re thinking about moving to Chicago, you’re not alone. Every year, we see thousands of people moving into our city, drawn in by our world-class food scene, rich culture, and those iconic skyline views.
We’re the Ben Lalez Team, a top Compass real estate team that has been actively selling real estate in Chicago for over a decade. In this article, we’ll walk you through the 2025 edition of the cost of living in Chicago. We’ll compare it to national averages, plus cities like Boston, New York, and Los Angeles (for all the west coast readers!).
Whether you’re planning to buy your first home, relocate from another city, or just curious about affordability in the Windy City, we’ve got you!
Housing Affordability
Let’s tackle the biggest expense of all – housing.
In 2025, the median home price in Chicago is around $355,000. That might come as a shock if you’re living in other major cities in America. That’s because this price is:
- 13% lower than the national median of $407,500
- Half the price of Boston at around $748,000
- A third of the price of Los Angeles at around $973,000
- Less than half of New York City at around $763,000
As a buyer moving to Chicago, you’ll find you can afford more space, better finishes, and even a yard! This is especially true if you’re willing to explore some of Chicago’s emerging neighborhoods that offer tremendous value.
What if you’re looking to rent?
The average one-bedroom is currently around $2,150, and a two-bedroom will set you back $2,630. Although rents in Chicago are higher than the national average, they’re well below New York City or Boston. A 1 bedroom in Manhattan could easily run you $3,500. With that kind of budget in Chicago, you could snag a two-bedroom in a trendy neighborhood with a parking spot.
But here’s what makes Chicago special.
The neighborhood diversity means you have housing options at every price point. Areas like Lake View, Lincoln Park, and West Loop typically fetch higher prices, but if you’re looking for affordability, you can check out Avondale, Rogers Park, and Pilsen.
Property Taxes
This is where Chicago loses some of its shine. Illinois has some of the highest property taxes in the country. In Cook County, where Chicago sits, the effect tax rate is about 2% of your home value. That means if you own a home worth $300,000, you’re paying around $6,000 roughly in property taxes per year.
That’s double the national average and much higher than you would pay in Boston or Los Angeles.
The good news is that there are exemptions available that can reduce your property tax bill:
- Homeowner Exemptions: reduces your EAV by up to $10,000
- Senior Citizen Homestead Exemption: For those eligible and above 65+
- Long-Time Homeowner Exemption: For qualifying long-term residents
- Home Improvement Exemption: Delays taxation on certain home improvements
Income Tax
Here’s where Chicago makes up for high property taxes. Chicago has no city income tax, and Illinois has a flat 4.95% state income tax (which is lower than what you would pay in New York or Los Angeles).
For comparison:
- New York City has city income tax rates up to 3.876% on top of state taxes
- California’s state income tax rates can reach 13.3% for high earners
- Massachusetts has a flat 5% state income tax
This tax structure makes Chicago attractive for high-income earners who would face much higher income taxes in coastal cities.
Utilities
Yes, the Chicago winters are legendary, but you’re not breaking the bank when it comes to utility costs.
Here’s the monthly breakdown for a typical Chicago household:
- Electricity: $100 – $300 (seasonal)
- Gas (heat): $100 (can reach $200 – $300 in winter))
- Water (metered): $60
- Internet: $60 – $100
- Cell phone: $55 – $90 per line
This is actually below the national average and way cheaper than cities like Boston (where electricity is 30 cents per kWh vs. Chicago at 16 cents) or Los Angeles (where gas and electricity costs are much higher).
By the way, many Chicago buildings include heat in the HOA fees or rent, which can be a significant cost-saver during winter. When house hunting, we always point this out to our clients as it can mean substantial monthly savings.
Transportation
Chicago is a commuter-friendly city if you plan on taking public transportation. Here are some of the average transportation costs:
- CTA Fare: $2.50
- Monthly CTA pass: $75
- Metra monthly pass: $116 – $245 (depending on distance)
- Gas prices: $3.30 – $3.40 per gallon
- Car insurance: $3,245 per year
- Monthly downtown parking: $220 per month
- Rideshare (average trip): $15 – $25
If you compare this to New York City (where insurance and parking are sky high) or Boston (limited parking and expensive gas), Chicago falls somewhere in the middle. However, car insurance is higher than the national average.
The city’s excellent public transportation means many Chicago residents choose to live without a car. This is especially true in highly walkable areas like The Loop, Lincoln Park, and Lakeview. This can save you thousands per year on parking, insurance, and maintenance.
Groceries, Healthcare, & Dining Out
Whether you’re enjoying some of Chicago’s famous dining spots or you’re dreaming of auditioning for Master Chef, here’s a quick peek at your day-to-day expenses:
- Groceries: About 4% above the national average
- Healthcare: About 7% above the national average
- Dining out: $100 per meal for two (mid-range restaurant)
- Fine dining: $200+ per meal for two
- Coffee: $4 – $5.50
- Sales tax: 10.25% (higher than Boston but not as high as New York City)
Overall, your groceries will be a bit on the expensive side, but you’re still paying less than you would in Boston or New York City on the same budget.
Chicago has access to excellent farmers markets and ethnic grocery stores, where prices can be substantially lower than those of major supermarkets. Areas like Albany Park, Pilsen, and Chinatown offer specialty ingredients at prices that might surprise you.
Childcare & Education
This is an important part of the family budget for every family. How does Chicago measure up?
- Infant daycare: $1,800 – $2,000 per month
- Preschool: $1,200 – $1,500 per month
- Nanny: $18 – $25 per hour
- After-school programs: $200 – $400 per month
- Private K-12: $5,000 – $40,000 per year
- Public schools: Free
While childcare costs are still better than in New York City or Boston, they’re still a significant chunk of the budget. Many families rely on family help, nannies, or shift work to make it work.
Chicago public schools vary widely by neighborhood, with some among the best in the state.
Quick Snapshot: Chicago vs Other Cities (2025)
| Chicago | Boston | NYC | LA | National Avg | |
| Median Home Price | $355,000 | $748,000 | $763,000 | $973,000 | $407,500 |
| 1BR rent (avg) | $2,150 | $2,950 | $3,500+ | $2,300 | $1,534 |
| Property Tax % | ~2.0% | ~0.67% | ~0.9% | ~0.69% | ~1.1% |
| Sales Tax | 10.25% | 6.25% | 8.875% | ~9.5% | ~6-7% |
| Monthly Utilities | $190 | $220+ | $250+ | $220 | $170 |
| Car Insurance | $3,245 | $2,100 | $5,000+ | $2,570 | $2,678 |
| Infant Daycare | $1,800-2K | $2,000+ | $2,500+ | $1,500-1,800 | $1,480 |
Final Thoughts
After helping over a thousand families find their perfect Chicago home, we’ve seen firsthand how this city offers the perfect balance of big-city life and Midwestern affordability.
So, is Chicago still affordable? Absolutely, but like any financial decision, it comes down to your priorities.
The housing market offers tremendous value compared to some other big cities. You’ll get significantly more space for your dollar and access to a wide range of property types. Plus, Illinois’ flat income tax means you’re keeping more of your paycheck.
Yes, property taxes and winter heating bills can sting a bit, but these costs are offset by Chicago’s excellent public transportation and the city’s world-class dining and entertainment options.
In Chicago, you get breathtaking architecture, 26 miles of lakefront, 77 diverse neighborhoods, and one of America’s best food scenes, all at a lower price point than you’d pay in New York, Boston, or San Francisco.
For families, Chicago offers a range of education options, from top-rated public schools to private institutions. While childcare costs remain a challenge (as they do across America), the city’s family-friendly amenities and parks offer an excellent quality of life for you and your kids.
Ready to explore what Chicago has to offer? The Ben Lalez Team knows this city inside and out, from hidden gem neighborhoods to figuring out property tax exemptions to save you money. Reach out to us today, and let’s find your perfect Chicago home!
Sources:
www.illinoisrealtors.org/marketstats/
www.fox32chicago.com/news/chicago-housing-market-prices-rise
www.nar.realtor/newsroom/existing-home-sales-retreated-1-0-in-december
www.zillow.com/research/data/
www.zumper.com/blog/rental-price-data/
www.taxfoundation.org/data/property-taxes/effective-property-tax-rates/
www.chicago.gov/city/en/depts/fin/supp_info/revenue/tax_list.html
www.bls.gov/regions/midwest/data/consumerpriceindex_chicago_table.htm
www.bls.gov/regions/west/data/consumerpriceindex_losangeles_table.htm
www.bls.gov/regions/northeast/data/consumerpriceindex_boston_table.htm
www.numbeo.com/cost-of-living/
www.eia.gov/petroleum/gasdiesel/
www.nerdwallet.com/best/insurance/car-insurance-rates
www.spothero.com/blog/monthly-parking-rates/
www.whereipark.com/blog/
www.taxfoundation.org/data/all/state/sales-tax-rates/
www.payscale.com/cost-of-living-calculator/Illinois-Chicago
www.healthcostinstitute.org/
www.dhs.state.il.us/page.aspx?item=30355
www.axios.com/2023/08/28/child-care-costs-increase-2023
