Sometimes it seems like life in the United States is only getting more expensive to live in — and there’s some truth to that, particularly in Oregon.

In recent findings from CNBC America’s Top States for Business 2023 study, Oregon has cracked the top three most expensive states to live in, beaten only by California and Hawaii. With the economy still in a shaky state and the fallout from the pandemic still having an effect, many Oregonians are struggling to make ends meet from day to day.

But why exactly is Oregon so expensive to live in, and is there any hope on the horizon? We’ll dig into some of the reasons behind Oregon’s high cost of living and see if there’s some relief in sight.

What Makes Living in Oregon So Expensive?

Here’s a quick rundown on the facts from the CNBC America study:

The average home price in Oregon is a whopping $661,000, with a housing affordability score of 0.45 out of 2.00. Oregon also has some of the highest fuel prices in the nation, per the AAA. The study also mentions that the average monthly energy bill is $157, and a half gallon of milk will typically run you $2.88.

What exactly makes the cost of living in Oregon so high? A few things.

First, housing prices. Property prices, rental rates, and property taxes have all seen a major surge in Oregon. Granted, the state has a lot to recommend it — beautiful landscapes, a thriving culture, and attractive cities — but that creates demand, which in turn drives up housing prices.

Gasoline prices are also continuing to climb nationwide, but those costs tend to be abnormally high in Oregon, which can make it a financial challenge just to get around the state. This is not merely due to national upward trends in gas prices but also regional taxation in Oregon that further drives up the price at the pump.

Oregon’s growing role as a major business hub is also playing a part in Oregon’s high cost of living. The state’s culture and opportunities have attracted Fortune 500 companies to the state, which is currently experiencing a tech boom. While this is hardly a bad thing, it also means that an influx of tech professionals and businesses has driven up demand, which naturally leads to higher prices.

Other Rising Costs

So beyond mortgages, rent, and fuel, are there any other costs that have risen and further complicated the cost of living in Oregon? Unfortunately, yes. One of the main culprits is inflation, which has made a major impact on prices over the last couple of years, especially when it comes to necessities. Families in Oregon are feeling the pinch when it comes to everything from utilities to groceries.

One such rising cost is auto insurance. Car insurance rates in Oregon have been trending upward, further adding to the woes of Oregon motorists. In the last year alone, auto insurance rates have increased by an average of 8.5%, making it even tougher to drive affordably. One bright spot to this phenomenon, however, is that Oregon has lower car insurance premiums than the national average — per numbers from The Zebra’s Renata Belasco, the typical yearly premium is $1,325 per year, a full 15% below the national average.

Another expense that’s hitting Oregonians hard is medical care and health insurance. The health care situation in the United States is already deeply flawed, but Oregonians in particular are feeling increased financial pressure as insurance premiums go up and medical costs skyrocket.

How bad is it? Director of OHA’s Health Policy and Analytics Division Jeremy Vandehey has expressed concerns that Oregon’s health insurance rates are rising much faster than the national average. From 2013 to 2019, Oregon’s personal spending for health care rose by an alarming 34% — and that’s before the pandemic began.

Looking to the Future

So is there any relief in sight for financially struggling Oregonians? Some signs point to yes.

Inflation has already eased quite a bit this year, and experts are predicting that it will continue to ease as the supply chain disruptions incurred by the pandemic finally subside. Economists are still wary about some uncertainties ahead, but the general outlook seems to be positive.

Oregon in particular has proven to be unusually resilient when it comes to the post-pandemic economic landscape: According to more data from CNBC America, Oregon climbed a record 17 spots to #18 as one of the top states for business, the single biggest improvement for any of the states. It also improved economically from No. 29 to No. 15, per that same study. While this doesn’t mean the Beaver State is entirely out of the financial woods, it is good news for struggling residents hoping the pressures of inflation and rising cost of living will soon ease off.