There are many factors to consider when deciding where to live — the weather, proximity to your loved ones, and nearby job opportunities, to name a few. But for some folks, especially those on a fixed income, one of the most crucial things to consider is a low cost of living. Here’s a look at some of the most affordable states in the U.S., according to data provided by the Council for Community and Economic Research.
10. Indiana (tie)
Indiana is one of two states tied for the 10th-lowest cost of living in the country, ranking roughly 9.5% below the national average across the board. The Hoosier State is particularly notable with regard to its housing costs, which rank nearly 23% below the national average. The real estate brokerage firm Redfin puts the median sale price of homes in Indiana at $265,300, while also noting that homes in cities such as Gary, Terre Haute, and Muncie can be purchased for less than $100,000.
Local radio station 93.1 WIBC-FM notes that Logansport — located roughly 80 miles north of downtown Indianapolis — is arguably the cheapest city in Indiana; the average household there pays $1,207 in monthly bills, which is 43% lower than the national average.
10. Tennessee (tie)
Tennessee is tied with Indiana for having the 10th-lowest cost of living in the U.S., ranking lower than Indiana in five of the six major categories: groceries, utilities, transportation, health care, and miscellaneous. However, housing costs in Tennessee are slightly higher, especially in popular cities such as Nashville, thus bringing up the state’s overall cost-of-living average.
The financial institution SoFi suggests the average Tennessean should expect to pay an average of $42,469 annually to reside in the state, with roughly $389 per month going toward utilities and $251 toward groceries. Just keep in mind that the cost of living in Nashville is significantly higher than in any other city in the Volunteer State. While a Nashville home is likely to run you around $420,000, a home in Memphis averages $195,000 less.
9. Michigan
The Wolverine State has the ninth-lowest cost of living in the U.S., thanks in part to housing costs that are significantly lower than the national average. Cities such as Flint come with a median home price of just $50,000, according to Redfin, making them among the lowest in the country.
Michigan also offers relatively low transportation costs, thanks in part to the Michigan 2-1-1 program, which provides free or cheap transportation to people who need assistance. The Michigan Economic Development Corporation even offers this helpful calculator to see how the cost of living in Michigan compares to where you currently live.
8. Iowa
Though transportation costs in Iowa are only 2.4% below the national average, groceries are 3.6% more affordable, health-related expenses are 4.2% cheaper, utilities cost 7.1% less, and housing comes in at a whopping 25.2% below the national average. To further explain just how significant this gap is, we used Nerd Wallet’s “compare cities” feature to pit Davenport, Iowa, against New York City. The tool determined that life in Davenport is 160% cheaper than in the Big Apple, with the cost of housing coming in at a staggering 651% less.
6. Missouri (tie)
Missouri has the lowest transportation costs anywhere in the nation — nearly 13% below the national average. According to the Council for Community and Economic Research data, life in Missouri is most affordable in the city of Joplin, followed closely by Springfield. While the cost of living is slightly more expensive in hubs such as St. Louis and Kansas City, it’s still roughly 10% lower than the national average.
6. Arkansas (tie)
Arkansas is tied with Missouri as the sixth-most-affordable state in the nation, though the cost of living is much lower in certain categories, including health care, which is the lowest of any state. Arkansans should also expect to pay 10% less than the average American for transportation, and utilities are nearly 10% less as well.
Indeed, the Arkansas Democrat-Gazette claims Arkansas to be the second-cheapest U.S. state based on housing and utility costs. While this ranking may be up for debate, we can’t deny the low cost of home rentals in Arkansas, which equal roughly $850 a month — $400 less than the U.S. national average.
5. Alabama
Alabama’s low cost of living is largely thanks to its low housing costs. In fact, housing prices in the Yellowhammer State are more than 30% lower than average prices in the United States. This more than makes up for the fact that utility costs in Alabama are right in line with the national average. Health care in the state of Alabama is also a relative bargain; it has the second-lowest health-related expenses in the U.S. SoFi claims that you’ll pay an average of $39,657 annually to live in Alabama, with average monthly housing costs coming in around $664.
4. Mississippi
Alabama’s neighbor Mississippi has a cost of living more than 12% below the national average. Mississippians should expect to pay 3.7% less for groceries, 10.2% less for transportation, 11.1% less for utilities, and 26.1% less for housing. Forbes notes that the average Mississippian may pay $32,336 per year in essential expenses, though Mississippi also has the lowest average annual salary at $47,569.
3. Kansas
To paraphrase Dorothy Gale, there’s no place like Kansas — especially if you’re looking for an affordable place to live. In fact, Kansans spend the least of any state on groceries. If you’re looking for an affordable city to move to, Redfin mentions Topeka as one of the cheapest in Kansas, with a median home price around $160,995. But this low cost of living doesn’t mean you’ll have to sacrifice a good quality of life in the Sunflower State. According to U.S. News & World Report, Kansas ranks in the top half of U.S. states for K-12 education and 12th in higher education.
2. Oklahoma
The cost of living in Oklahoma is about 15% cheaper than the national average, particularly with regard to housing, which is 31.4% more affordable. With a median home cost of $147,000, Enid (about a 90-minute drive north of Oklahoma City) has the cheapest housing in the state, according to Redfin.
SoFi reports the average Oklahoman should expect to pay $38,650 in essential annual costs, roughly 17.8% of which will go toward health-related expenses, whereas 16.3% will likely go toward housing. Even the state capital of Oklahoma City isn’t particularly expensive compared to the rest of the nation, as the average home cost is around $213,555.
1. West Virginia
As of 2024, the most affordable U.S. state to live in is none other than West Virginia, where residents pay nearly 16% less for essentials than folks in other parts of the United States. The bulk of what makes West Virginia so affordable is its low housing costs, which are more than 40% less than the national average. In fact, housing in West Virginia is 250.1% cheaper than in Hawaii, which has the least affordable homes in the U.S. This accessible real estate market has led to West Virginia having the highest homeownership rate in the nation, at 78.2% as of 2020, according to the Department of Economic Development.
About the data: To compile this list, we consulted data from the Council for Community and Economic Research, which looked at the average cost of housing, groceries, utilities, health care, and transportation in all 50 states. You can view the full report here.
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