Indianapolis vs Memphis: cost of living compared
Memphis is 8% cheaper than Indianapolis overall. Memphis (TN) has no state income tax; IN tops out around 3.15%.
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
Memphis generally offers a more affordable cost of living compared to Indianapolis. This difference is largely driven by housing, which is noticeably cheaper in Memphis. While other categories like food, healthcare, and utilities also show Memphis as more budget-friendly, the gap in housing costs creates the most significant impact on overall expenses. Both cities present a lower cost of living than the national average.
Housing
Housing costs are considerably lower in Memphis, whether you're looking to buy or rent. Median home prices are substantially less, and typical one-bedroom rents are also more affordable. Indianapolis housing, while still below the national average, carries a higher price tag. Property taxes and insurance costs can vary, but the initial purchase price and monthly rent show a clear advantage for Memphis.
Taxes and everyday costs
Daily expenses for transportation, food, healthcare, and utilities are all somewhat lower in Memphis. A key difference impacting disposable income is state income tax; Tennessee has no state income tax on wages, while Indiana does. This means a larger portion of your earnings could remain in your pocket in Memphis, further enhancing its affordability for everyday spending compared to Indianapolis.
Lifestyle trade-offs
Beyond costs, movers will notice climate differences, with Memphis experiencing a warmer, more humid subtropical climate and Indianapolis having a more distinct four-season continental climate. Both cities are largely car-dependent, with similar average commute times. Indianapolis is known for its grid-based layout and Midwestern feel, while Memphis has a distinct Southern character, with both offering a range of urban and suburban environments.
Bottom line
For those prioritizing a lower overall cost of living, Memphis presents a compelling option, primarily due to its significantly more affordable housing market and the absence of a state income tax. While Indianapolis also offers a cost of living below the national average, it is generally more expensive across most categories. The choice between them will weigh budget considerations against preferred climate and regional character.
| Measure | Indianapolis, IN | Memphis, TN |
|---|---|---|
| Overall cost of living (US avg = 100) | 85 | 78 |
| Housing index | 63 | 54 |
| Transportation index | 89 | 88 |
| Food index | 88 | 85 |
| Healthcare index | 92 | 88 |
| Utilities index | 95 | 92 |
| Misc index | 82 | 78 |
| Median home price | $218,000 | $178,000 |
| Median 1-bedroom rent | $1,000/mo | $900/mo |
| Average commute | 25 min | 25 min |
Compare any two metros with the free cost of living tool, or see the true monthly cost of a specific Memphis home with the True Cost Calculator.