Michigan · Population 121,179 · Updated March 2026
How far your income goes in Ann Arbor
State-level tax rates that affect your costs
Ann Arbor has a significantly higher cost of living than most US cities, driven largely by premium housing costs. With a cost index of 121 (where 100 equals the national median), Ann Arbor residents can expect to pay median rent of $1,552/month while earning a median household income of $81,089/year.
The median home value in Ann Arbor, MI is $435,100, with typical monthly owner costs around $1,638 including mortgage, insurance, and taxes. The median rent-to-income ratio of 23.0% means housing is relatively affordable here — well below the 30% threshold that HUD considers cost-burdened.
Michigan has a moderate income tax rate of 4.25%. Combined with a 6.0% sales tax rate and 1.38% effective property tax rate, the overall tax environment is a factor in the total cost of living in Ann Arbor.
Common questions about living costs in Ann Arbor
Similar-sized cities to compare
Compare the cost of living in Ann Arbor, MI with 299 other major U.S. cities