How has cost of living changed in KY’s 2 largest cities? It fell in one, report finds
Lexington’s cost of living increased from 2024 to 2025, while Louisville residents saw a slight decrease.
That’s according to a new report by financial website SmartAsset, which named Lexington the 104th location nationally for increase in cost of living over a one-year period in its March 16 report “Where Cost of Living Increased and Decreased Most – 2026 Study.”
The report found the city had an increase of 2.61%, although it still has a cost of living 7.9% below the national average. Louisville saw a 1.2% decrease in cost of living, according to the analysis, landing 9.2% below the U.S. average.
“The cost of living premium in a specific location reflects the relative cost of housing, groceries, utilities, transportation, and other common necessities, compared to the rest of the country,” SmartAsset’s report reads.
The analysis compared 236 locations in the U.S. over a one-year period using data from the Council for Community and Economic Research on pricing for housing, transportation, utilities, medical costs and more, adjusted for inflation.
Nationally, grocery prices are up 2.4% from February 2025 to February 2026, according to the BLS Consumer Price Index, with a 3.9% increase in restaurant dining prices. Electricity is up 4.8%, medical care services are up 4.1% and transportation costs are up 2.2%. Average gas prices in Kentucky are up by more than $1 per gallon in just one month.
In Kentucky, customers are particularly feeling the pinch of rising energy costs.
Real estate has become more expensive in Lexington, with a 4.5% increase in median home sale price from February 2025 to February 2026, according to real estate company Redfin.
Unemployment has seen a slight decline in Fayette County recently, with a 2.9% unemployment rate in December, compared to 3.7% the month prior, according to data from the U.S. Bureau of Labor Statistics.
The Massachusetts Institute of Technology’s Living Wage Calculator reports a single Lexington resident needs to earn $20.45 per hour to afford basic necessities, while a single parent with one child would need to make $34.96. The minimum wage in Kentucky is the same as the federal minimum, $7.25.
Where is cost of living increasing the most?
Here’s how the top 15 cities and metro areas with the greatest increases in cost of living from 2024 to 2025 compared, according to SmartAsset:
1. Great Falls, Mont.: 9.78% increase in cost of living
2. Springfield, Mo.: 8.25%
3. Rapid City, S.D.: 7.73%
4. Orange County, Calif.: 7.3%
5. Monroe, La.: 7.14%
6. Waterloo-Cedar Falls, Iowa: 6.8%
7. Augusta-Aiken, Ga.-S.C.: 6.66%
8. Champaign-Urbana, Ill.: 6.64%
9. Asheville, N.C.: 6.48%
10. Grand Junction, Colo.: 6.29%
11. Philadelphia, Pa.: 6.26%
12. Prescott-Prescott Valley, Ariz.: 6.22%
13. Dalton, Ga.: 6.16%
14. New York (Manhattan), N.Y.: 6.12%
15. Ponca City, Okla.: 6.1%
Some U.S. cities and metro areas saw relief in cost of living from 2024 to 2025. Those with the greatest declines included Meridian, Miss., Orlando and Cape Coral-Fort Myers, Fla., Charleston-North Charleston, S.C., and Hutchinson, Kansas, according to SmartAsset.
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