The Top 5 Most Expensive Cities in America: How Much You Really Need to Earn

What does it actually cost to achieve the American Dream in the most expensive U.S. cities? According to recent GOBankingRates analysis of the 50 largest American cities, the answer varies dramatically depending on where you want to live. The most expensive cities in the US require household incomes that might shock you—ranging from $187,000 to over $300,000 annually when applying the widely-used 50/30/20 budgeting rule (50% for essentials, 30% for discretionary spending, 20% for savings).

California Dominance: West Coast Cities Claim the Top Spots

Three of the five most expensive U.S. cities are located in the San Francisco Bay Area and greater Los Angeles region. San Jose leads the nation, requiring a household income of $319,000 annually to comfortably live the American Dream—driven largely by astronomical housing costs averaging $9,228 per month for mortgages alone. San Francisco follows closely at $297,000 in required household income, with similar real estate pressures pushing monthly mortgage payments to $8,110.

San Diego rounds out California’s contribution to the list, requiring $242,000 in household income, while Los Angeles comes in at $234,000. Both cities face significant housing expenses, though somewhat lower than their northern counterparts. When combined with grocery costs around $9,400-$10,000 annually and other living expenses, these California destinations represent the steep price of coastal living.

Beyond California: East Coast and Pacific Northwest Contenders

New York City, the nation’s financial hub, requires a $220,000 household income to achieve the American Dream, with notably lower mortgage costs ($4,656/month) compared to California cities, offset by higher expenses in other categories. Seattle and Boston round out the top expensive cities discussion, requiring $212,000 and $199,000 respectively—significantly lower than West Coast leaders but still demanding six-figure incomes for comfortable living.

The stark contrast between these most expensive cities in America and the national average highlights a critical reality: geography dramatically determines how far your paycheck stretches. Whether you’re drawn to California’s economic opportunities, New York’s career possibilities, or the Pacific Northwest’s quality of life, understanding the true cost before relocating is essential for achieving genuine financial security alongside the American Dream.

Data sourced from GOBankingRates analysis using Sperling’s BestPlaces cost-of-living indexes, Bureau of Labor Statistics, Zillow home value data, and U.S. Census American Community Survey, based on 2025 statistics.