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Saving money is more important today than ever. Rising inflation, increasing energy bills and rates, and the sharp rise in grocery prices mean everyone is feeling the pinch. Expenses are skyrocketing, and people are looking for creative ways to save money. Even better than a savings account, one way to do this is to consider where you live.
Discovering Affordable Living: States with Low Housing Prices
We've researched and compiled a list of states where you can enjoy a high quality of life without breaking the bank. States like Kansas, Oklahoma, and Missouri stand out for their low housing prices and overall affordability.
Top 10 Most Affordable States for 2023
For each state, we consider factors like median home prices, average rent for apartments, and median household income in order to provide a comprehensive view.
Here are the top 10 most affordable states to live in 2023. For each state, housing costs represent the median sales price for a property, and the average share price shown is for a two-bedroom rental. Median household income is based on a household of two people. Moving to any of these states will likely give you a much better return for your money that you’ll get from your savings account, so see if any of our recommended states fit the bill.
Mississippi: Lowest Home Prices in the Nation
- Housing Costs – $164,000
- Average rent price – $816
- Median household income – $57,000
- Affordability – 88.6
- Cost of Living (cheapest states in USA) – 85.3
- Employment rate – 52.7%
If you’re wondering, “what is the cheapest state to live in?” Mississippi is your answer, scoring below average in every category. The Magnolia State has the second most affordable median house value in the US at $164,000, roughly 5.5 times less than that of the most expensive state, Hawaii. No state income tax is charged, and winter temperatures are very mild. The employment rate, however, is very low, so try to secure a job prior to moving in order to take advantage of the savings you will make.
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Arkansas: Natural Beauty and Affordable Housing
- Housing Costs – $177,000
- Average rent price – $768
- Median household income – $61,000
- Affordability – 89.2
- Cost of Living – 90.4
- Employment rate – 55.6%
Arkansas is the second cheapest state and lives up to its title of the Natural State, with stunning scenery and pleasant climates making the state perfect for nature lovers. The capital, Little Rock, is home to 200,000 inhabitants, and rental prices are just over $800. Employment in Arkansas is in line with the national average, and the cost of living makes Arkansas one of the cheapest states to live in.
Oklahoma: Low Housing and Living Costs
- Housing Costs – $181,000
- Average rent price – $838
- Median household income – $66,000
- Affordability – 88.0
- Cost of Living – 86.0
- Employment rate – 60%
Housing costs in Oklahoma are far below the national average, and other expenses, such as grocery shopping and healthcare, are lower than anywhere else in the country. The weather ranges from manageable winters to hot summers, although you may have to dodge the occasional tornado. Over sixty percent of the Oklahoma workforce is based in or around Oklahoma City or Tulsa, so if you are heading to the Sooner State for work, consider these two areas.
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West Virginia: Exceptional Affordability with the Cheapest Housing Costs
- Housing Costs – $137,000
- Average rent price – $810
- Median household income – $58,000
- Affordability – 89.3
- Cost of Living – 90.4
- Employment rate – 52.5%
Housing costs in West Virginia are by far the cheapest in the US, coming in at $27,000 lower than the next closest state, Mississippi. The cost of living is 10% lower than the national average, and the scenery across the state is stunning. The downsides to living in West Virginia include a high poverty rate and relative lack of jobs, so try to secure employment before heading to the Mountain State. The capital and largest city is Charleston, with a population of just over 200,000.
Kentucky: Affordable Home Prices in a Scenic Setting
- Housing Costs – $197,000
- Average rent price – $823
- Median household income – $61,000
- Affordability – 89.9
- Cost of Living – 94.5
- Employment rate – 55.6%
Kentucky offers beautiful rural living, where even the cities of Louisville and Lexington are close to green, rolling fields. Housing, groceries, healthcare, and transportation are far below the national average. Tax breaks are available for property owners. However, a state tax is levied at a flat rate of 4.5%. Weather in Kentucky change is very changeable and sometimes harsh, from cold winters to scorching summers.
Alabama: Low Cost of Living with Warm Coastal Living
- Housing Costs – $204,000
- Average rent price – $839
- Median household income – $63,000
- Affordability – 89.2
- Cost of Living – 87.9
- Employment rate – 55.5%
Alabama offers a beautiful coastline, warm weather, and a very low cost of living. While the employment rate is lower than the US average of 60%, jobs are available. The downsides to living in Alabama include the high levels of poverty state-wide. Note that Alabama has some interesting local laws. Many of its counties restrict the sale of alcohol.
Missouri: Affordable Urban Living in Cultural Hubs
- Housing Costs – $231,000
- Average rent price – $818
- Median household income – $69,000
- Affordability – 90.1
- Cost of Living – 88.9
- Employment rate – 58.9%
Missouri offers large cities offering multiple major league sports teams and access to culture in Kansas City and St. Louis. Despite these large cities, the cost of living across Missouri remains cheap, with the cost of living at 10% less than the national average. Lovers of the outdoors will enjoy what Missouri has to offer, with great hiking and camping opportunities on your doorstep. Yet, the downsides include lower levels of education quality and limited public transport outside of major cities.
Kansas: High Quality of Life with Reasonable Housing Costs
- Housing Costs – $206,000
- Average rent price – $836
- Median household income – $75,000
- Affordability – 89.7
- Cost of Living – 87.5
- Employment rate – 64.6%
Kansas offers a great combination of cheap costs of living and a relatively high median household income. Ultimately, this allows Kansas residents to stretch money further than other states would allow. Kansas is home to many high-quality schools and job opportunities in specific sectors, such as agriculture. However, the state has limited cultural opportunities, and extreme weather, including tornadoes, can be expected.
Iowa: Exceptional Employment Opportunities with Affordable Living
- Housing Costs – $192,000
- Average rent price – $849
- Median household income – $75,000
- Affordability – 87.9
- Cost of Living - 89.1
- Employment rate – 66.3%
Iowa offers very cheap housing costs, a high median income, and an employment rate way above the national average. Iowa also provides excellent colleges and universities, including Iowa State and the University of Iowa. Similarly, rambling, hiking, and camping opportunities are limitless. Most work opportunities are located around the Des Moines metropolitan area, which is home to over 700,000 people. Unlike other states on this list, Iowa offers a range of employment opportunities, including agriculture, financial services, and manufacturing.
Georgia: Urban Sophistication with Competitive Housing Prices
- Housing Costs – $318,000
- Average rent price – $966
- Median household income – $71,000
- Affordability – 90.1
- Cost of Living – 88.4
- Employment rate – 60.3%
The cost of living in Georgia is one of the lowest in America, although real estate costs are significantly above the other states in this list. That is due to many residents in the Atlanta metropolitan area living in the suburbs and similar urban areas, which has pushed up the median housing cost. Outside these areas, bargains remain to be had, and lovers of culture will enjoy the food and music that Georgia has to offer. There are a large number of work opportunities in Georgia, particularly in and around the Atlanta region.
The cheapest states in 2024 to move to:
- Mississippi
- Arkansas
- Oklahoma
- West Virginia
- Kentucky
- Alabama
- Missouri
- Kansas
- Iowa
- Georgia
What is the Cost of Living Index
The cost of living index measures the average cost of basic goods and services required to maintain a certain standard of living in a particular location. It's useful for comparing the affordability of different locations, but personal factors like income and lifestyle can affect individual expenses.
Methodology
The cost of living in each state is measured by the cost of living index. The cost of living index is a tool used to compare the relative expenses of living in different states. The average in the US is set at 100, with a number below 100 indicating a state is less expensive than average and a number above 100 indicating it is more costly than the average state.
The cost of multiple different items are considered when calculating the cost of living index. Everyday food and groceries, utility bills, housing costs, transportation costs, and the cost of healthcare are all analyzed.
Variations in expenses across locations are considered when calculating the cost of living index. For instance, housing costs might be significantly higher in one area compared to another, while grocery expenses might be relatively similar. To determine the index, each expense item in the basket is assigned a weight based on its relative significance in the average person’s budget. The index is then calculated as an overall number that indicates the relative cost of living between two locations.
Conclusion
The average American household income in 2021 was $97,962. Moving to one of the cheapest states to live in listed here can significantly improve your financial position if you currently live in one of the most expensive states in the US. These include Hawaii, Massachusetts, California, and New York. Housing, healthcare, and everyday grocery options are significantly cheaper, and you’ll notice the day-to-day differences positively impact your bank account balance.
Make sure you research thoroughly before making any decisions, but a move to any of these states will result in a lower cost of living. We recommend that you inspect the job market prior to moving to see if any suitable work is available, and if so, take that adventure and improve your financial position.
FAQ
What is the most expensive state to live in 2023?
The cheapest state to live in USA in 2023 is Mississippi. The cost of living in Mississippi is 14.7% below the national average. The median home price in Mississippi is $164,000, and the average rent is $816 per month.
What state has the lowest cost of living for retirement?
The most expensive state to live in 2023 is Hawaii. The cost of living in Hawaii is 145% above the national average. The median home price in Hawaii is $800,000, and the average rent is $2,200 per month.
Where is California like but cheaper?
Florida has the lowest cost of living for retirement. The cost of living in Florida is 10% below the national average. The median home price in Florida is $250,000, and the average rent is $1,000 per month.
What is the 3 cheapest state to live in?
The three cheapest states to live in are: 1. Mississippi 2. Arkansas 3. Oklahoma
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As an experienced content writer, Lauren's passion for the finance sector is only exceeded by her love of writing. With years of experience writing for financial websites, she has honed her expertise and developed a deep understanding of the industry. Lauren specializes in delivering top-quality, specialized content with an expert tone of voice and a unique flair, leveraging her extensive knowledge and expertise. In addition, she holds a First Class Bachelor's degree from Staffordshire University.
