Cost of Living in Bozeman 2% Higher Than National Average

Wednesday Sep. 2nd, 2015

Bozeman’s composite cost of living index score came in at 2.0 percent above the national average for the second quarter of 2015, according to the latest Cost of Living Index Report released by Prospera Business Network today. The composite index is based on six component categories – housing, utilities, grocery items, transportation, health care and miscellaneous goods & services. The national average composite index is set at 100 each collection period; therefore the index conveys relative price levels at a specific point in time and the index score can be seen as a percentage of the average for all places. The Index does not measure inflation (price change over time). Figures above 100 represent costs above national average; figures below 100 represent costs below national averages.

Housing: The second quarter housing index score was 112.7, meaning that area housing was 12.7 percent above the national average as of April 2015. The average price of a 2,400 square foot new home on an 8,000 square foot lot that met the index collection specifications was $362,452 in Bozeman in April. The average monthly rental rate for a 950 square foot apartment in Bozeman that met the index collection specifications was $1,015 in April. Mortgage rates are also taken into consideration when computing the housing index score. Bozeman’s housing index score is often above the national average but seems very reasonable in comparison with the housing markets in San Francisco, CA or Manhattan, NY with housing index scores of 321.1 and 433.3 respectively.

All Other Categories: As is typical, Bozeman residents enjoy a bargain when it comes to utilities which were 15.4 percent below average. Transportation costs were at 0.3 percent above average while miscellaneous goods & services came in at 1.1 percent below average. Groceries were 1.4 percent above average and health care was 4.6 percent above average for the quarter.

Area Comparisons: To put Bozeman’s index scores in perspective, the other cities included in the table below include the cities with the most expensive and least expensive composite scores for the year—Manhattan, New York and McCallen, Texas respectively. The table also includes the most comparable cities to Bozeman in the Western region that participate in the index. Note: San Francisco was included to provide insight into how Bozeman compares to the Bay area since none of the participating cities in California were comparable to Bozeman. Similarly, Portland was included as the only Oregon city with data available for the quarter.

 

The national average composite index is set at 100 each collection period. The index conveys relative price levels at a specific point in time and the index score can be seen as a percentage of the average for all places The Index does not measure inflation (price change over time).

About the Cost of Living Index

Prospera insists on providing accurate, dependable information that helps inform and advance local businesses. The Cost of Living Index measures regional differences in the cost of consumer goods and services, excluding taxes and non-consumer expenditures, for professional and managerial households in the top income quintile. It is based on more than 50,000 prices covering almost 60 different items for which prices are collected three times a year by chambers of commerce, economic development organizations, and university applied economic centers in each participating urban area. Small differences should not be interpreted as showing a measurable difference. Prospera Business Network, the local economic development organization, collects prices for the index items in Bozeman and submits its research to be analyzed and compared to other communities.

All items are priced in each place at a specified time and according to standardized specifications. The Cost of Living Index measures relative price levels for consumer goods and services in participating areas. The average for all participating places, both metropolitan and nonmetropolitan, equals 100, and each participant’s index is read as a percentage of the average for all places. Small differences in the index numbers should not be interpreted as significant. The Index does not measure inflation (price change over time). Because each quarterly report is a separate comparison of prices at a single point in time, and because both the number and the mix of participants changes from one quarter to the next, Index data from different quarters cannot be directly compared.

About C2ER, the Council for Community and Economic Research
C2ER is a nonprofit professional organization comprising research staff of chambers of commerce, economic development organizations and agencies, and related organizations throughout the United States and Canada. In its dedication to improving business information through research, C2ER developed the Cost of Living Index to meet the need for a measure of living cost differentials among urban areas. Originally titled Inter-City Cost of Living Indicators Project, the Cost of Living Index has been published quarterly since 1968. The Cost of Living Index is based on nearly 100,000 data points gathered primarily by C2ER members located in 400 cities. For more information about participating in this project or joining C2ER, please visit www.c2er.org or call 703-522-4980.

About Prospera Business Network
Prospera Business Network is a member-supported nonprofit economic development organization in southwestern Montana whose purpose is to advance, challenge and inspire our regional business communities. Originally established in 1985 as the Gallatin Development Corporation, Prospera plays a leading role in economic development serving a region that is one of the fastest growing economic areas in the northern Rocky Mountains. Prospera is dedicated to supporting business expansion, retention and relocation by providing access to business consulting, financing, professional development and economic research. Prospera Business Network provides a wealth of resources and tools to business leaders and visionary entrepreneurs and prides itself on the range and quality of its programs. To learn more visit: www.ProsperaBusinessNetwork.org