The 10 Cheapest States To Live In

Over the past decade, home prices in the United States have increased dramatically. The median sales price for a new home increased 44% from $291,700 in August 2014 to $420,600 in August 2024. As buyers across the U.S. look for houses they can afford, they often wonder which states are the cheapest to live in.

Quicken Loans reviewed a variety of metrics to answer this question. While many factors affect the cost of living, we focused on housing, food, energy, transportation, health care, state income tax rates and miscellaneous goods, using data from the U.S. Census Bureau’s 2023 American Community Survey, the Council for Community and Economic Research, and the Tax Foundation.

We also used cost of living indexes to evaluate average expenses for groceries, health care, transportation and utilities. The indexes use 100 as a base for the national average cost of living. If a state has a grocery items index of 131, it costs roughly 31% more than the national average. Conversely, if a state has a grocery index of  90, groceries cost about 10% less than the national average.

While the most expensive states usually are the fastest-growing places to live or home to the hottest real estate markets, the attraction for the states on this list is the lower cost of living, which can lead you to a brighter financial future.

1. Arkansas

Arkansas is the least expensive state for several reasons. Arkansas homes are relatively cheap, with a median home value of $195,700 – the third-lowest in the country. Owning is also more affordable, with homeowners paying a median of $1,038 in property taxes, the third-lowest in the country. The transportation index is nearly 10% less than the national average. Medical bills can get expensive anywhere, but in Arkansas, health care costs an average of 12.2% less than the national average. When it comes to buying groceries, Arkansas has the lowest grocery items index in the U.S.: 5.4% below the national average. However, it’s also important to consider that Arkansas’s average annual household income is the third-lowest in the country.

2. Mississippi

Homes in Mississippi cost considerably less than the national average. The median home value is $169,000 – the second-lowest in the country. Property taxes in Mississippi also are relatively low, with homeowners in the state paying a median of $1,177. For context, the median property taxes paid in New Jersey is $9,163 – that’s nearly eight times more. However, the average household income in Mississippi is the lowest in the country at $76,305.

3. Alabama

The median property taxes paid in Alabama is $786 – the lowest of all 50 states. Alabama also boasts the country’s second-lowest effective property tax rate at 0.4%. The median home value in Alabama is $216,600, much lower than most states. Health care is considerably more affordable in Alabama. The state has an average health care index that’s 15.7% lower than the national average – the lowest of all 50 states. Still, the average household income in Alabama is one of the lowest in the nation at $85,530.

4. Oklahoma

Oklahoma’s median home sales value is $208,600 – just over half the national average. Its affordability also is reflected in the average housing index, which shows that homes in Oklahoma are typically more than 30% cheaper than the national average. You also won’t have to pay much in property taxes. Homeowners in the state pay a median annual property tax bill of $1,593. However, the average household income is $85,650 – among the lowest in the nation.

5. Tennessee

Property taxes are pretty low in Tennessee, where homeowners pay a median of $1,420. Compare that to Connecticut, where homeowners pay $6,388 – more than four times more each year. When it comes to keeping the lights on in Tennessee, utilities cost 12.2% less than the national average. Tennessee’s health care costs are nearly 10% less than the national average.

6. West Virginia

If you’re looking to buy an affordable home, West Virginia has some of the least expensive homes in the country. The median home value in West Virginia is $163,700, lower than any of the other 49 states. For context, the national median sales price for a new home sold in the U.S. in August 2024 was $420,000 – nearly three times that of West Virginia. The median property tax paid in West Virginia is $843, which is the second-lowest in the country.

7. Louisiana

The median home value in Louisiana is $215,600 – just over half the national average. Homeowners in Louisiana don’t have to pay much in property taxes – a median of $1,038, the third-lowest in the country. Utilities typically cost 21.7% less than the national average – the lowest in the country. However, the average household income in Louisiana is the fourth-lowest in the country at $83,303.

8. Missouri

In Missouri, the median home value is $233,600 – that’s almost half the national average. Median property taxes for Missouri homeowners are $1,907 – not bad compared to the $9,163 median in New Jersey. The cost of health care in Missouri is 7.4% less than the national average. When it comes to getting around, transportation costs come out to more than 10% less than the national average.

9. Kansas

Kansas homes are more affordable than those in most other states, with a median home value of $219,800. The average housing index shows Kansas homes are more than 25% more affordable than the national average. Kansas also boasts the lowest transportation costs at 11.8% less than the national average. However, the average household income in Kansas is $93,781 – among the lowest in the country.

10. South Dakota

The median home value in South Dakota is $268,200 – substantially lower than the national median home value of $420,600. The average housing index is nearly 15% lower than the national average. Utilities in South Dakota tend to cost 16.5% less than the national average – the fifth lowest in the country.

Methodology

So, how did we come up with this list? Quicken Loans gathered and analyzed 11 key metrics to help us determine which states are the least expensive to live in. We included the following metrics from the Census Bureau’s 2023 American Community Survey:

We also included these metrics from The Council for Community and Economic Research:

Our last metric came from the Tax Foundation:

We then applied weights to each metric depending on their importance in the study and added them up to create the overall score for each state. The final scores are sorted to produce the final rankings.

This data represents average costs, meaning that in each area, some people pay more and others less than the average. Because of this fluctuation, it’s crucial for homeowners to estimate their actual cost of living. When you analyze an area’s affordability, you should keep in mind the 50/30/20 rule. The idea of this rule is that you should put 50% of your income toward necessities – such as housing, utilities, and groceries – 30% toward discretionary spending, and the remaining 20% should be saved for future expenses.

The Bottom Line

If you’re looking for affordable living, it’s important to remember that a low-cost lifestyle may be possible in many different places. For those just starting their homeownership journey, first-time home buyer programs are available to pave the way regardless of your desired location. When considering your cost of living, it’s also important to remember that interest rates are a significant factor. To find the best location, we recommend reviewing your monthly budget, including your income and all necessary expenses, before deciding how much house you can afford.