Birmingham vs Omaha: cost of living compared
Omaha is 9% more expensive than Birmingham overall. State income tax tops out around 5% in AL vs 5.84% in NE.
Indexes use a US average of 100: below 100 is cheaper than the national average. Housing and transportation are derived from median home prices, rents and commute times; figures come from BLS, Census ACS, Numbeo and the MIT Living Wage Calculator.
The big picture
Birmingham generally offers a more affordable cost of living compared to Omaha. While both metros are well below the national average, Birmingham's overall expenses are noticeably lower. This difference is largely driven by significantly cheaper housing costs in Birmingham, which creates a substantial gap in the total financial outlay for residents. Other categories like miscellaneous goods and services also contribute to Birmingham's lower overall index, making it the more budget-friendly option.
Housing
Housing is where the most significant cost difference lies. Both buying and renting are considerably less expensive in Birmingham. Median home prices are substantially lower, and median one-bedroom rents also show a clear advantage for Birmingham. While specific property taxes and insurance costs vary, the initial outlay for homeownership or monthly rental payments will be notably higher in Omaha. Birmingham offers more accessible housing options for a given budget.
Taxes and everyday costs
Daily expenses show a mixed picture. Transportation costs are lower in Omaha, and the average commute time is slightly shorter. Food expenses are roughly similar, though Omaha is marginally higher. Healthcare costs are also quite comparable, with Omaha being slightly more expensive. Utilities are practically identical in both metros. Regarding state income tax, Nebraska's top marginal rate is somewhat higher than Alabama's, which could impact take-home pay for some residents.
Lifestyle trade-offs
Beyond costs, a move between these cities means adjusting to different environments. Birmingham, located in the South, experiences a humid subtropical climate with hot summers and mild winters, and is susceptible to severe weather. Omaha, in the Midwest, has a humid continental climate with hot, humid summers and cold, snowy winters, also with potential for severe weather. Both metros are generally car-dependent, though Omaha's commute is slightly shorter. Birmingham is known for its hilly terrain, while Omaha is flatter.
Bottom line
For households prioritizing a lower cost of living, Birmingham presents a clear financial advantage, primarily due to its significantly more affordable housing market. While some daily expenses like transportation are cheaper in Omaha, and utility costs are similar, the substantial savings on housing in Birmingham likely outweigh these differences. The slightly higher state income tax in Nebraska is another factor to consider when evaluating the overall impact on a household budget, making Birmingham the more economical choice for many.
| Measure | Birmingham, AL | Omaha, NE |
|---|---|---|
| Overall cost of living (US avg = 100) | 78 | 85 |
| Housing index | 58 | 67 |
| Transportation index | 88 | 80 |
| Food index | 85 | 88 |
| Healthcare index | 88 | 90 |
| Utilities index | 92 | 92 |
| Misc index | 75 | 82 |
| Median home price | $198,000 | $238,000 |
| Median 1-bedroom rent | $925/mo | $1,000/mo |
| Average commute | 25 min | 22 min |
Compare any two metros with the free cost of living tool, or see the true monthly cost of a specific Omaha home with the True Cost Calculator.