New York, Los Angeles Among Most Pricey Places to Live

It's becoming increasingly costly to take up residence in major U.S. cities, but Americans' living expenses don't hold a candle to some of the costliest accommodations abroad, according to a new report from the Economist Intelligence Unit.

Singapore for the third year running was judged to be the world's most expensive city for expatriates, based on local price inflation, currency strength and energy valuation, among other factors. Singapore has long been regarded as one of the most expensive destinations in the world – a separate study published last month by TheRedPin Canadian real estate hub found that it would take roughly four times the average U.S. salary to live comfortably in Singapore.

"Though Singapore is home to a rich culture, renowned cuisine, and a diverse population, daily life is even more expensive there than it is in New York City," TheRedPin study said. "Many of its staggering population live in public-housing tower blocks, and virtually everything (education, clothing, gas, groceries, and alcohol) tends to cost more than it does in the U.S."

That's not to say it's cheap to live in America nowadays. Though Zurich and Hong Kong rounded out the top three, two U.S. cities – New York and Los Angeles – cracked the Economist Intelligence Unit's top 10 list for the first time in a decade

Most Expensive Cities

  1. Singapore
  2. Zurich
  3. Hong Kong
  4. Geneva, Switzerland
  5. Paris
  6. London
  7. New York
  8. (Tie) Copenhagen, Denmark
  9. (Tie) Seoul, South Korea
  10. (Tie) Los Angeles

"A strong dollar has delivered a rise in the relative cost of living for U.S. cities in a year marked by price and currency volatility," the unit said in a statement accompanying the report. "The U.S. dollar is on its fastest rise in 40 years. Moreover, the raising of interest rates by the U.S. Federal Reserve Bank in December 2015 for the first time in almost a decade is expected to have a global impact." 

Higher interest rates make mortgages, car loans and borrowing money in general more expensive for domestic consumers, so it's easy to see how action from the Fed would translate into a cost of living bump. But rate hiking also bolsters the country's persistently strong dollar, which further complicates expenses inside the U.S.

A stronger dollar helps make imports from other countries more affordable, but it isn't very helpful from the outside looking in. Expats looking to convert their savings into American dollars upon moving to or visiting the U.S. will face unfavorable exchange rates and essentially get less bang for their buck. All 16 major American cities profiled in the report were deemed to be more pricey to live in and visit than they were last year.

Most Expensive U.S. Cities

  1. New York (No. 7 overall)
  2. Los Angeles (No. 8 overall)
  3. Chicago (No. 21 overall)
  4. Minneapolis (No. 24 overall)
  5. Washington, D.C. (No. 26 overall)
  6. Houston (No. 31 overall)
  7. San Francisco (No. 34 overall)
  8. Seattle (No. 42 overall)
  9. (Tie) Honolulu (No. 46 overall)
  10. (Tie) Pittsburgh (No. 46 overall)
  11. Miami (No. 49 overall)
  12. Boston (No. 56 overall)
  13. Lexington, Kentucky (No. 62 overall)
  14. Detroit (No. 68 overall)
  15. (Tie) Cleveland (No. 73 overall)
  16. (Tie) Atlanta (No. 73 overall)

New York and Los Angeles (ranked 7th and 8th, respectively) are the most expensive cities in the region, although even within the U.S. there is scope for significant variation," the report said. "Cleveland and Atlanta, for example, are the joint cheapest [U.S.] cities, ranked 66 places lower than New York and with a cost of living that is 31 percent cheaper. On average the cost of living across the 16 U.S. cities surveyed (excluding New York) is about 20 percent cheaper than New York." 

Those keeping an eye on U.S. inflation may be surprised the national cost of living climbed to such an extent over the past year. The Bureau of Labor Statistics' primary price trackers for consumer and producer prices in January were up only 1.4 percent and down 0.2 percent, respectively, over the year. Neither metric points to a notable shift in how much it costs to live in or visit the U.S.

But the new cost of living report is relative based on prices in other parts of the world. Deflationary concerns abound in parts of Asia and Europe, and international interest rate cuts (like what theEuropean Central Bank announced Thursday) only weaken global currencies against the dollar. The report doesn't necessarily imply the U.S. is becoming wildly unaffordable. But it does point to a high degree of international price volatility around the world. Only eight of the 133 cities profiled in the report held the same ranking they did last year.

"When looking at the global average of all cities we can see that in relative terms, with U.S. cities riding high, the rest of the world is becoming cheaper," the report said. 




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