Cambridge Massachusetts Cost of Living [2024] | 💰 What Is the Cost of Living in Cambridge MA? (2024)

Last Updated on: 26th December 2023, 03:03 pm

Come one and all to Cambridge! With top schools, high-paying jobs, and safe streets, Cambridge is one of the best places to live in Boston. However, many people are concerned about the cost of living in Cambridge. A 2023 report from CBS News found that the Boston-Cambridge metropolitan area is the third-most expensive area to live in America.

Is Cambridge expensive? To answer this question, you should do a deep dive. Here is your complete guide on the Cambridge Massachusetts cost of living.

Cambridge Cost of Living Index

Many factors impact your cost of living in Cambridge MA, including your lifestyle, neighborhood, and household size. The cost of living index (COLI) compares the cost of items in a city or metro area to the cost of the same items nationwide. 100.0 is the nationwide average; a city with an index of 95 is 5% less expensive than the national average, while an index of 105 means a city is 5% more expensive.

The Cambridge Massachusetts cost of living index is 153.2. This means that items in Cambridge cost 53.2% more than the national average. Each category of items is higher than the national average. Transportation in Boston has the lowest index of 109.5. Housing is the highest, with an index of 224.5.

The COLI is a good tool to use for a basic estimate, though you will need additional statistics for a clear picture of your Cambridge cost of living. Here are a few other statistics you can use for the cost of living in Cambridge MA.

Cambridge Consumer Price Index

The Consumer Price Index (CPI) measures how the prices paid by residents for common items change over time. The higher the CPI is, the higher the cost of living in Cambridge MA is.

The Cambridge CPI rose between July and September 2023 by 0.7% and between September 2022 and September 2023 by 2.6%. Food prices rose by 1.3% between July and September, with meat and poultry becoming 2.5% more expensive. Energy prices increased by 1.5% between July and September, with gasoline becoming 5.0% more expensive.

Consumer Expenditures Survey

The Bureau of Labor Statistics conducts the Consumer Expenditures Survey (CE) to see how much Americans spend on common items. Bureau employees interview Americans about how much they spend and ask them to keep diaries tracking expenses over time. You can see what the current cost of living in Cambridge is and determine how much the cost has changed over time.

The average household in Cambridge spent $89,795 a year in 2021-22, which is 28.2% higher than the national average. The average Cambridge household spent 68.7% of what they earned in 2021-22.

The biggest expenditure was housing, at $31,679 a year. Housing accounts for 35.3% of an average household’s budget and 24.2% of their income. The average household also spent $11,697 a year on transportation (13.0% of their budget and 9.0% of their income) and $10,873 a year on food (12.1% of their budget and 8.3% of their income).

However, Cambridge and Boston residents spent less money on food, transportation, and healthcare than average Americans. Boston residents saved 31.3% of what they earned, compared to average Americans who saved just 22.8%.

The cost of living in Massachusetts is similar to the cost of living in Cambridge. Massachusetts is the fifth most expensive state in America. The Massachusetts cost of living is high in all categories, with the average resident spending $406.21 a month on groceries ($4,874.52 a year).

Family Budget Calculator

The Economic Policy Institute (EPI) offers a Family Budget Calculator you can use to estimate how much money you need to cover your expenses. A family of four would need to make $131,028 a year ($10,919 a month) to cover their expenses in the Boston-Cambridge metro area.

Child care is the biggest expense for a family of four, at $2,421 a month. Housing is the second-biggest expense, at $2,336 a month. People living by themselves can live an affordable life in Cambridge because they don’t need to pay for child care and can live in a smaller home or apartment. According to the EPI, a single adult can pay just $4,801 a month or $57,611 a year.

Cost of Household Items, Utilities, Gas, and Groceries in Cambridge

While the Cambridge MA cost of living may be more expensive than the national average, many items are affordable, and you can find opportunities to save money. Here are a few common items you can buy in Cambridge:

• 1 pound of ribeye: $15.77
• 1 gallon of regular milk: $4.30
• 1 pound of white rice: $1.40
• 1 pound of apples: $2.89
• 1 pound of potatoes: $1.15
• 1 loaf of wheat bread: $3.87
• 1 gallon of gasoline: $3.57
• Monthly MBTA LinkPass: $90.00
• Average City of Cambridge utilities per month: $144.25
• Average car insurance Cambridge MA premium per month: $63
• 1 pair of jeans: $52.50
• 1 pair of Nike running shoes: $90.00

If you have trouble paying your Cambridge utilities, you can request assistance from the City of Cambridge. The Fuel Assistance Program can help you cover the cost of gas during the winter months.

Cambridge, MA Housing Market

Cambridge real estate can be pricey, though you have options for luxurious homes for sale you can’t find elsewhere. According to Redfin, the median sale price of homes for sale in Cambridge MA is $992,500, with a median price per square foot of $916. The Cambridge MA median home price has dropped by 10.6% since 2022, but the average home price in Cambridge MA per square foot has risen by 7.3%.

Cambridge houses for sale sell in 21 days. 36.2% of homes are sold over their Cambridge housing prices, while 31.7% experience price drops. The sale-to-list price is 100.7%.

58 Cambridge homes for sale were sold in Cambridge in September 2023, 37 of them being condos or co-ops. The median sales price of Cambridge MA condos for sale is $815,000, while the median price of single-family homes is $2,000,000, and the median price of townhomes is $1,145,000.

The price-to-rent ratio determines whether it is more affordable to buy a home or rent an apartment. The Cambridge price-to-rent ratio is 22.6, meaning it is much better to rent than buy.

While the price of real estate is high, many homes also have very high values. The median value of an owner-occupied home in Cambridge is $1,023,900, which is nearly double the average in Massachusetts. 69% of homes in Cambridge are valued at over $500,000, with 21% valued at over $1 million. You will be able to turn a profit if you sell your home.

Cambridge Rental Market – Average Rent in Cambridge MA

Many people reduce the average cost of living in Cambridge MA by renting. 66% of homes in Cambridge are renter-occupied, which is nearly twice the Massachusetts average of 38%. 85% of properties in Cambridge are multi-unit structures, while just 15% are single-unit structures.

Despite the popularity of Cambridge apartments, the Cambridge average rent is very high. According to RentCafe, the average cost of Cambridge apartments is $3,658 a month. The national average rent is $1,726, so the average rent in Cambridge MA is two times higher than the national average. The average rent in Cambridge neighborhoods is similar to the average rent citywide.

The most expensive neighborhood for renters is East Cambridge, at $3,982 a month. The three least expensive neighborhoods are Cambridge Highlands, Strawberry Hill, and West Cambridge, each at $3,131 a month. Many people consider these neighborhoods to be the best neighborhoods in Cambridge.

The 2023 ATTOM Rental Affordability Report found that it is more affordable to rent than buy in Middlesex County, so you can diminish your Cambridge MA cost of living by renting. However, it can still be hard for Cambridge residents to afford a rental property. The Out of Reach Report from the National Low-Income Housing Coalition found that Massachusetts is the third-most expensive state for renting homes. A worker would need to earn $41.64 an hour to cover the cost of a two-bedroom home comfortably.

Average Salary and Household Income in Cambridge

Cambridge has a median household income of $109,358, which is roughly 20% higher than the state median. 26% of residents make over $200,000. According to Payscale, the average salary in Cambridge is $95,000, while the average base hourly rate is $27.97. Wages have fallen by 3.4% during the third quarter of 2023. The high income in Cambridge jobs makes it easy for many people to pay for the Cambridge MA average rent.

Income, Sales, and Property Taxes in Cambridge

You should break Cambridge taxes into three categories: income, sales, and property taxes. Here are brief guides on how much you can expect to pay while living in Cambridge.

Income Taxes in Cambridge

All Cambridge residents must pay the Massachusetts income tax of 5.0% on all earned and unearned income. Earned income includes commissions, salaries, tips, and wages, while unearned income consists of capital gains, dividends, and interest. The Massachusetts income tax rate is flat, applying to everyone regardless of how much they earn, except for certain capital gains, which are taxed at 12.0%. Every resident whose gross income is at least $8,000 must file a Cambridge income tax return.

Cambridge MA Sales Tax

Cambridge residents must pay the Massachusetts sales tax of 6.25% on tangible personal property, including utilities and telecommunications services. Middlesex County and the City of Cambridge do not impose their own sales taxes. Cambridge residents pay their sales taxes during transactions with vendors, who then send the money to the state government.

Cambridge Property Tax

The City of Cambridge charges a Cambridge property tax rate of $5.92 in property taxes for every $1,000 your home is worth. Your Cambridge property tax is based on the fair market value of your home for the year prior; for 2023, you would pay taxes for the value of your home on January 1, 2022.

You can reduce your Cambridge MA property tax rate by applying for a residential exemption. To receive the exemption, you must give the city a Massachusetts tax return showing your Cambridge home is your primary residence. You can receive a 30% discount on the assessed value of your home, saving you thousands of dollars in Cambridge MA property tax payments.

Property tax rates have stayed stable in Cambridge over the last few years. 23.2% of residents experienced a Cambridge property tax decrease between 2021 and 2022. 35.0% paid $0-$100 more in additional property taxes in 2022 than they did in 2021.

Cambridge vs Boston Cost of Living

In general, the cost of living in Cambridge Massachusetts is lower than the Boston cost of living. Here are a few items you can purchase in Cambridge vs Boston:

Is Cambridge MA expensive? The overall cost of living in Cambridge MA is high, but you can find ways to reduce your Cambridge living costs. You should rent a home instead of buying one, use public transportation instead of driving, and buy fruits and vegetables instead of meat. The Cambridge average rent and average utility costs in Cambridge are less expensive than in Boston, so people considering moving to Cambridge vs Boston should move to Cambridge.

If you’re ready to start living in Cambridge, you should contact affordable and professional Cambridge movers. Mass Bay Movers performs over 2,000 moves every year with a crew of over 50 dedicated movers. Get a free moving estimate by calling 978-587-3775.