Last Updated on: 12th September 2023, 11:58 am

Make your move to Merced CA! The city is a wonderful place to live, with great schools, beautiful outdoor attractions, and an affordable cost of living. The Center Square named Merced County the least expensive place in California to live in 2020. In 2020, a resident needed to make only $2,946 a month to maintain a good standard of living.

However, the Merced cost of living has changed over the last three years. Before you call a moving company, you should get all the details on the cost of living in Merced CA. Here’s your guide on the Merced CA cost of living.

Merced Cost of Living Index

To get a full sense of the cost of living in Merced CA, you should use a few different statistics. Keep in mind that these statistics are just averages, and several factors can impact your cost of living. The more people who live with you, the higher your Merced cost of living. Buying a house has a higher upfront cost than renting an apartment. The cost of Merced real estate also varies from neighborhood to neighborhood, so some places have a lower cost of living than other places. You may want to compare the cost of living in Merced to the cost of other cities near Monterey, so you have options when moving.

Cost of Living Index

The Cost of Living Index (COLI) lets you compare the cost of living in a city or metropolitan area to the national average. The national average has an index of 100, so a city with an index higher than 100 has a higher cost of living than the country.

Merced is in the San Francisco metro area, so you can use the cost of living index for the San Francisco area to estimate the Merced cost of living. The COLI for San Francisco is 194.1; items cost 94.1% more in San Francisco than the national average.

A major factor in why the COLI is so high is housing. The index for housing is 341.0; homes for sale in San Francisco cost 241% more than the national average. Other expenses cost less. The index for groceries is 130.4, while the index for utilities is 133.6. Though these statistics are higher than the national average, they suggest that you can cover the bills with an average job if you avoid buying an expensive house.

Consumer Price Index

The Consumer Price Index (CPI) measures how the prices for items change over time. The higher the index, the higher prices are rising, and the higher your cost of living will be. The CPI for the San Francisco area in June 2023 was 340.056. The CPI has risen by almost three points since February, suggesting the cost of living is increasing.

However, the average CPI for urban consumers is 305.109, so the San Francisco cost of living is not substantially higher than the average for cities. The nationwide CPI has also been rising; over the last year, it increased by 3.0%. If costs are increasing across the country, you can expect costs to increase in Merced.

Consumer Expenditure Survey

The Bureau of Labor Statistics conducts the Consumer Expenditure Survey (CES) to track how much money Americans spend on items. The Bureau contacts consumers in each metropolitan area and asks them questions about how much they spend. Here are the statistics for San Francisco according to the 2020-2021 CES:

  • Income before taxes: $154,091
  • Average annual expenses: $91,290
  • Annual housing expenses: $38,212 (24.8% of the average consumer’s income)
  • Annual transportation expenses: $11,077 (7.2% of the average consumer’s income)
  • Annual food expenses: $10,819 (7.0% of the average consumer’s income)

One reason why these expenses are high is discretionary purchases. The average consumer spends $3,250 a year on restaurants, $906 on alcoholic beverages, and $3,535 on entertainment. If you cut each of these expenses by half, you will save more than $3,800 a year.

Family Budget Calculator

The Economic Policy Institute’s Family Budget Calculator estimates how much a family needs to earn to cover the cost of living. A family of four living in Merced County must earn $82,079 a year to cover their expenses. The highest cost is transportation, which costs $1,319 a month. Health care costs $1,313, while housing costs $1,067.

Cost of Household Items, Utilities, Gas, and Groceries in Merced

Merced can be an expensive place to live, but you can reduce your expenses by understanding how much items cost. Here are some examples of items in Merced.

  • 1 gallon of milk: $4.33
  • 1 loaf of fresh white bread: $1.65
  • 12 regular eggs: $7.00
  • 1 pound of ribeye steak: $16.71
  • 5 pounds of potatoes: $3.74
  • 1 pound of bananas: $1.18
  • 1 head of lettuce: $1.00
  • 1 gallon of gasoline: $4.74
  • 1 first-run movie ticket: $16.04
  • Average Merced utilities per month: $142.26
  • 31-day fixed route pass for Merced Bus: $60.00
  • Average cost of car insurance Merced: $126 monthly ($1,512 annually)

You can save money on each of these expenses, including by hiring an affordable Merced electric company and qualifying for discounts on car insurance Merced CA.

Merced Real Estate

The Merced housing market is competitive, but you have options for affordable Merced CA real estate. 63% of housing units in Merced are single-unit properties. 33% are multi-unit properties, and 3% are mobile homes. 59% of properties are renter-occupied, while 41% are owner-occupied.

According to Redfin, the median sale price of homes for sale in Merced CA is $390,000. The median sale price per square foot in Merced homes for sale is $249. Both of these prices have fallen over the last year.

Graph of the median sale price in Merced, CA

Merced has a lot of single-family homes but very few condos or townhomes. 70 single-family Merced houses for sale were sold in June 2023, while only three condos and townhomes were sold. Houses for sale Merced spent 24 days on the market in June 2023, which is down from 41 days in April 2023. Merced neighborhoods have similar median sales prices, but Downtown Merced is the cheapest neighborhood for homes for sale Merced, with a median price of $340,000.

Merced Rental Market – Average Rent in Merced CA

According to RentCafe, the average rent for apartments for rent Merced is $1,460 a month. The price-to-rent ratio for Merced is 22.26, meaning renting apartments in Merced is far more affordable than buying Merced California homes for sale. Rental properties in Downtown Merced are also cheaper than properties elsewhere; you can rent houses for rent Merced CA, covering 1,500 square feet for $2,400 a month.

The 2022 Rental Affordability Report from ATTOM concluded that it is more affordable to rent apartments for rent in Merced CA than buy Merced CA homes for sale. ATTOM found that the average Merced resident makes a weekly wage of $920, and the average rent for a three-bedroom property is $1,712. However, the cost of a home in 2021 was $355,000. The average worker can cover the cost of Merced rent easily, but buying Merced California real estate requires a lot of work.

The Out of Reach Report estimates how much money a worker needs to afford rent without spending more than 30% of their income. People living in the zip code of 95341 (covering south Merced) need to earn $22.31 an hour. People living in 95340 (covering downtown Merced) need to earn $24.62 an hour. People living in 95348 (covering northern and western Merced) must earn $27.31 an hour. You should try finding Merced housing for rent in South Merced to save money.

Average Salary and Household Income in Merced

The median household income in Merced is $52,127 a year. According to Payscale, the average base salary for Merced jobs is $68,000, and the average base hourly rate is $18.80. Educational services is the biggest job sector in Merced, and educational services jobs in Merced have average earnings of $70,783 a year. Retail trade is the second biggest job sector, with average earnings of $43,537 a year.

Income, Sales, and Property Merced Taxes

While living in Merced, you must pay three types of taxes. Here are the basics of the Merced tax system.

Income Taxes

The California income tax system is progressive; the more money you earn, the more taxes you must pay. You can find your California income tax rate using tax rate schedules; most people pay between 1%-12% of their income in taxes. Visit the California Tax Service Center to get more information on California income taxes and pay your taxes. You must also pay the federal income tax; the average federal income tax rate is 13.6%.

Merced Sales Tax Rates

The current total Merced sales tax rate is 8.25%. The state charges 7.25%, Merced County charges 0.50%, and the City of Merced charges 0.50%. Merced’s sales tax rate is less than the California sales tax average of 8.85%. California has the highest sales tax rate in the country.

Merced County Property Tax

Merced County residents must pay secured and unsecured property taxes. Secured property taxes are assessed against real property, like land or structures. Unsecured taxes are for property that the owner can relocate, like boats and private planes. You also need to pay supplemental taxes when you sell your home or build a new property.

The Merced County Assessor establishes the value of your property on January 1. You must pay the value of your property multiplied by the Merced property tax rate, which is 1% plus voter-approved rates. You can view the most recent voter-approved property tax rates here. You pay your secured property tax bill to the Merced County Treasurer Tax Collector in two installments, one on November 1 and the other on February 1. You must pay your unsecured tax bill in one installment before August 31.

Merced vs San Francisco Cost of Living

Merced may seem expensive, but it’s more affordable than the cost of living in San Francisco. According to the Economic Policy Institute’s Family Budget Calculator, a family of four living in San Francisco County would need to earn $148,624 a year to cover the cost of living, nearly twice the salary of a family in Merced County.

Here are a few common expenses in both cities:

Item Cost of Item in Merced Cost of Item in San Francisco
1 gallon of milk $4.33 $6.05
1 pound of beef $7.23 $8.61
1 gallon of gasoline $4.74 $5.36
Average monthly utilities $142.46 $254.33
1 pair of jeans $48.00 $68.13
Average monthly rent $1,460 $3,313
Median price of homes for sale $390,000 $1,405,000
Median sale price of homes per square foot $249 $939

What is the Merced CA cost of living like? The city can be expensive if you’re living with a family and looking to buy a house. However, you can save money by renting an apartment or house in the downtown or southern neighborhoods. You can also reduce the Merced cost of living by limiting your non-essential expenses, like take-out and movie tickets. If you compare Merced to San Francisco and cities near Fresno, you’ll find that the cost of living in Merced CA is less than in most places.

You can also save money and time by hiring experienced movers in Merced. Southbay Moving Systems serves more than 1,200 customers a year. Get a free moving estimate by calling 831-786-5537.