Most Affordable States to Live In: States Best for Tight Budgets

A couple looks at something in the distance, pointing and smiling
A couple looks at something in the distance, pointing and smiling

Discover the most affordable states in the U.S. to call home! While living in New York, California, and Hawaii may be beyond your budget, we've uncovered the perfect places to plant your roots without breaking the bank.

In this article, we identify the cheapest states to live in and the least expensive places to buy a home, giving you all the essential details to find the perfect spot. Whether you're a first-time homebuyer or looking for your next house, our budget-friendly options can help you plan your next move.

 

Summary:

  • Top 10 Most Affordable States to Live In
  • Least Expensive States to Buy a Home
  • Cheapest Northern States to Live In
  • Cheapest Southern States to Live In

 

Top 10 Most Affordable States to Live In

To create this list of the least expensive states to live in, we relied on the cost of living index, a widely recognized scoring system. This metric compares the average cost of living in a specific area to the national average, measured by a base cost of living average of 100. Scores above 100 signal a higher cost of living, and those below 100 indicate some of the more inexpensive states to live in.

Based on this index, here are the top 10 most affordable states to live in, and we’ll explore each one individually:

  1. Mississippi
  2. Oklahoma
  3. Kansas
  4. Alabama
  5. Georgia
  6. Missouri
  7. Iowa
  8. Tennessee
  9. West Virginia
  10. Ohio
Family sits on the floor of a new home they just moved into, having a pizza party with boxes stacked around them
Family sits on the floor of a new home they just moved into, having a pizza party with boxes stacked around them

1. Mississippi

Cost of Living Index: 85

 

Mississippi takes our top spot as one of the most inexpensive states to live in. According to Forbes®, as of August 2023, the cost of living in Mississippi is well below the national average, which means your hard-earned dollars stretch farther here. 

The Forbes® report also shares that although Mississippi has a low average salary of $45,180, residents spend an average of just $32,336 per year on essential expenses, making it the most economical state to live in and an attractive financial option for homebuyers. 

2. Oklahoma

Cost of Living Index: 85.8

Oklahoma comes in second place, with its cost of living being lower than the national average at an index of 85.8 in 2023, per Wisevoter. The average living wage is $15.75, and the minimum wage is $7.25. With a median household income of $60,096, Oklahoma is one of the most cost-effective states to live in and offers the hope of financial stability for aspiring homebuilders.

The Sooner State's recipe for affordability includes an accessible housing market, low energy costs, and below-average expenses for goods and services. Oklahoma also goes the extra mile by maintaining a relatively low tax burden. It has no state income tax on Social Security benefits, and the property tax rate is easier on your wallet.

3. Kansas

Cost of Living Index: 87.5

Kansas, another winner on our affordability radar, scores a lower-than-average cost of living on Wisevoter’s 2023 rankings, placing third with an index of 87.5. Wisevoter also reports this state of plains and possibilities has an average living wage of $16.38, a minimum wage of $7.25, and a median household income of $75,979. Kansas provides an affordable lifestyle and inexpensive options for aspiring homebuilders.

A few significant factors in the Sunflower State's affordability are its accessible housing market, lower-than-average costs for goods and services, and a tax burden that won't weigh you down. 

4. Alabama

Cost of Living Index. 87.9

Alabama, the “jewel of the South,” secures the fourth spot on our list of best states to live in for the cost of living. In 2023, Forbes found that this state’s overall cost of living boasts a commendable 87.9 on the cost of living index. Here, where the magnolias bloom, the median home price is $170,184, making Alabama the second most affordable area, trailing only behind Mississippi. With transportation and healthcare costs ranking among the lowest in the country, Alabama sets the stage for an economical and vibrant lifestyle.

Despite these advantages, it's important to note that Alabama faces challenges, ranking among the states with the highest percentage of residents living below the poverty line. However, a silver lining emerges with a low unemployment rate of 2.9%, painting a hopeful picture for financial stability.


Exterior of a new home in Avery Ridge community, located in Georgia, one of the most affordable states to live in as of 2023
Exterior of a new home in Avery Ridge community, located in Georgia, one of the most affordable states to live in as of 2023

5. Georgia

Cost of Living Index:  88.6

Georgia, one of the best affordable states to live in, settles in the middle of our list. It has a cost of living index below the national average, an average living wage of $17.64, a minimum wage of $7.25, and a median household income of $61,497, according to the 2023 Wisevoter report.

Georgia's affordability factor comes from its accessible housing market, and low costs for goods and services add to the allure, making every dollar go further. Additionally, Georgia maintains a relatively low tax burden, with property taxes less than the national average. If Georgia's Southern charm aligns with your vision of a dream home, explore Centex's new home communities in Georgia and affordable new homes in the Atlanta region, where affordability meets sophistication.


6. Missouri

Cost of Living Index: 89.1

Securing the sixth spot is Missouri, with Wisevoter reporting a cost of living index of 89.1 below the national average in 2023. The Show-Me State’s many attractions make it an attractive choice for homebuilders, along with that low cost of living. Wisevoter also shares that the average living wage is $16.29, complemented by a minimum wage of $11.15 and a median household income of $63,594.

Missouri's affordability includes an accessible housing market, low utility costs, and an overall lower-than-average cost for goods and services. Adding to the economic equation, Missouri maintains a relatively low tax burden, featuring property taxes less than the national average and no sales tax on groceries.

 

7. Iowa

Cost of Living Index: 89.9

Iowa lands on our list as the seventh most affordable state to call home. Per Forbes® in 2023, what sets Iowa apart is its affordability and low poverty rate of 11%, lower than the national average. The median cost of a single-family home in Iowa is a modest $167,036, making your dream home journey even more possible.

 

8. Tennessee

Cost of Living Index: 90.2

Tennessee secures a place on our list of affordable states with a Wisevoter 2023 cost of living ranking lower than the national average at an index of 90.2. In this booming state, Wisevoter also lists the living wage as $15.45 an hour, accompanied by a minimum wage of $7.25 and a median household income of $62,166.

Tennessee's low cost of living is due to accessible housing, a tax-friendly environment, and lower costs for essential needs like health care, food, and transportation. Explore new home communities in Tennessee, where you can enjoy a range of options to suit your personal style.

 

9. West Virginia

Cost of Living Index: 90.5

Amid the heart of the Appalachian Mountains, West Virginia claims the ninth spot of most affordable states to live in, scoring a solid 90.5 on the cost of living index, as reported by Forbes® in 2023. This scenic state offers an average single-family home cost of $117,639.

While West Virginia’s housing value shines, it often shares the spotlight with concerns around economic growth and its education system, landing alongside Alabama as a challenging place to live.

In 2023, Wisevoter lists West Virginia’s living wage as $15.45, its minimum wage as $8.75, and its median household income as $46,836. West Virginia's affordability is anchored in accessible housing, low taxes, and lower costs for essentials like food, healthcare, and utilities.


Couple and their dog in the frame of a new home at one of Centex's events in Ohio, one of the most affordable states to live in as of 2023
Couple and their dog in the frame of a new home at one of Centex's events in Ohio, one of the most affordable states to live in as of 2023

10. Ohio

Cost of Living Index: 91.5


Rounding out this list of affordable states to live in is Ohio, with a cost of living index of 91.9, according to Wisevoter in 2023. Ohio’s average living wage is a solid $15.61, complemented by a minimum wage of $9.30 and a median household income of $62,689.

The Buckeye State’s recipe for economical living includes accessible housing, a tax-friendly environment, and lower costs for essential needs like health care, food, and transportation. These Ohio new home communities are where affordability meets style.

 

Least Expensive States to Buy a Home

Finding your ideal home is more than location and lifestyle—it's also about striking the right balance between comfort and cost. In our search for the least expensive states to buy a house, we've curated a list of states with the lowest home prices.

Here are three of the cheapest states to purchase a home:

  1. West Virginia: This scenic mountain state stands out as the cheapest state to buy a house as of September 2023, according to Rocket Mortgage®. With a median home value of $143,200, well below the national average, West Virginia offers a range of lifestyles from quaint small towns to lively college communities.

  2. Alabama: Recognized by Rocket Mortgage® as one of the least expensive states to buy a house, as of September 2023, Alabama has a median home value of $172,800 and a cost of living index of 89. The state provides a compelling mix of affordability and amenities.

  3. Mississippi: Known for its Southern hospitality, cuisine, and blues music, Mississippi emerges as a top pick among Rocket Mortgage’s® September 2023 list of least expensive states to buy a home. With a median home value of $145,600 and a cost of living index of 85—15% below the national average—Mississippi combines cultural charm with unparalleled affordability.

 

Cheapest Northern States to Live In

If you’re a fan of the changing seasons but don’t want to pay the higher living costs of states like New York or Vermont, here are some of the cheapest Northern states to live in:

  1. Michigan: Renowned for its many lakes, CNBC® reported in July 2023 that Michigan is one of the cheapest Northern states to live in, with an average home price in Kalamazoo of $259,015. From housing costs to everyday expenses, Michigan proves you can experience an economical lifestyle alongside natural beauty. 
  1. Ohio: The Buckeye State has some of the most affordable homes in the north, according to 2023 data from the National Association of Realtors. With an average home price in Lima of $285,688, Ohio’s cost of living won’t sacrifice your savings. Discover the possibilities in one of Centex's New home communities in Ohio today.
  1. Iowa: The National Association of Realtors® 2023 data also asserts that Iowa has one of the most affordable housing markets in the nation. Iowa’s cost of living score of 89 and average home price in Burlington of $270,071 opens the door to a lifestyle where quality and affordability go hand in hand.

 

Cheapest Southern States to Live In

Down South, where warm, sunny weather is abundant year-round, are some low-cost states to live in with dynamic lifestyles to match. Check out some of the cheapest Southern states to live in, with a cost of living that aligns with conservative budgets:

  1. Mississippi: According to World Population Review, in 2023, Mississippi holds the title of the cheapest state to live in the United States. Its cost of living index is 85, and overall costs in the state are 17% lower than the national average. Housing costs are the lowest in the nation, with a median price for a single-family home of $157,828 and an average rent for a two-bedroom apartment of $991.

  2. Alabama: Alabama steps into the spotlight as one of the cheapest states in the U.S., with a cost of living index of 87.9, per World Population Review in 2023. Affordable living in Alabama extends to housing, with the average single-family home selling for $194,695 and two-bedroom apartment rents averaging $1,005 across the state.
  1. Oklahoma: World Population Review finds Oklahoma to be one of the most affordable states to live in as of 2023, thanks to its cost of living index of 85.5. Housing prices in Oklahoma are 25% lower than the national average, making it one of the cheapest in the country. The median home cost is $171,057, with rents averaging $999 per month. From groceries to health care, Oklahoma stands out as one of the most affordable states.

 

Affordable New Homes Communities by State

Becoming a homeowner for the first (or even second or third) time is a significant life event that requires time, energy, and money. At Centex, we understand that affordability can be the key to turning your homeownership dreams into reality. Explore our range of new construction homes across the United States, where affordability meets excellence:

Exterior of a new home in South Carolina, a relatively affordable state to live in as of 2023
Exterior of a new home in South Carolina, a relatively affordable state to live in as of 2023

Conclusion

Discover the most affordable states in the U.S. where you can build a dream home that aligns with your budget. Whether it’s amid the Southern charm of Georgia, the low-cost lifestyle of Missouri, or the vibrant culture of Tennessee, Centex can help you create not just a house but a future filled with the joy homeownership brings. Together, let's make your dream a reality.

Explore new home communities today or browse more Centex blogs.

 

 

Written By: Jordan Thomson, Orange County-based Freelance Writer

Last Updated: 3/13/24