The 10 Least Expensive States to Live in the US

least expensive states to live in

Slashed home price | David McNew/Getty Images

When you think about your ideal home, what factors come to mind? Maybe it’s the number of bedrooms or whether there’s a pool in the backyard, but for most people location is king. You probably subconsciously chose your location first, whether you realized it or not.

Some people choose their home based on proximity to family or friends, or the quality of schools or abundance of nightlife and entertainment options. But chief among all those factors is the cost of living involved. How much does it cost to live in a certain area, and can you afford to do so?

People choose to move each year for a number of factors, including their jobs or better living opportunities elsewhere. According to the U.S. Census Bureau, an average of about 12% of Americans have moved each year since 2008. All told, that means 35.7 million people or more are packing their belongings into cardboard boxes to move across town — or across the country.

The most and least expensive states

Home prices have generally been back on the rise since the recovery from the Great Recession. However, there are still remarkable differences depending on which state you choose to call home. A stand-alone home in Jackson, Mississippi with three bedrooms and 2,100 square feet has been listed for $59,900. Meanwhile, a new condo with similar square footage in San Francisco is listed at an astounding $4.5 million. The only explanation: The condo is located in a city with astronomical job opportunities, but also a sky-high cost of living.

If you’re looking for a low-cost place to live with cheaper housing, groceries, and utilities, reviewing the cheapest states is a good place to start. This list of the cheapest states uses data from the Missouri Economic Research and Information Center and other resources. Each state is ranked by its cost of living index, as of the third quarter of 2016.

10. Texas

Austin Texas Reflections Lady Bird Lake

Austin, Texas | iStock.com/RoschetzkyIstockPhoto

  • Cost of living: 90.7
  • Grocery index: 89.6
  • Housing index: 83.4
  • Utilities index: 96.7
  • Transportation index: 94.8
  • Health index: 95.5
  • Miscellaneous: 93.4

The Missouri Economic Research and Information Center (or MERIC) used the nationwide average costs for each of these categories at the base. As a result, we see that the overall cost of living in Texas is 9.3% less than the average cost of living in the United States as a whole. (By comparison, Hawaii’s cost of living index is 167.9, meaning it’s 67.9% more expensive to live there than the national average.)

Home prices in Texas have been on the rise, especially in the past year. At a housing index of 83.4, it’s the highest among these cheapest states. However, home prices are still relatively affordable. The median home value of houses in the Lone Star state is $161,300, according to Zillow. But with those housing increases, the median listing prices of houses for sale right now is a much higher $255,000. If you plan to rent instead, the average price is $1,400 per month.

9. Kentucky

Kentucky Derby

Churchill Downs in Kentucky | Elsa/Getty Images

  • Cost of living: 90.5
  • Grocery index: 89.4
  • Housing index: 80.1
  • Utilities index: 94.0
  • Transportation index: 96.6
  • Health index: 88.2
  • Miscellaneous: 97.1

You’ll likely pay less for your cart of groceries while living in Kentucky, since the state has the lowest grocery index among the cheapest states. Food costs are about 10.6% lower in the Bluegrass state compared to national averages, according to MERIC’s findings. The median home value in Kentucky is $131,300, with current median sale prices around $162,000. Renting a home will cost around $1,000.

8. Missouri

St. Louis

St. Louis | KAREN BLEIER/AFP/Getty Images

  • Cost of living: 90.4
  • Grocery index: 97.5
  • Housing index: 74.4
  • Utilities index: 99.5
  • Transportation index: 94.9
  • Health index: 98.0
  • Miscellaneous: 95.7

Relatively low housing costs put Missouri at the No. 8 most affordable state in the nation. With housing costs generally 25% cheaper than the rest of the country, Missouri has the third-lowest housing index among the 10 most affordable states. You’ll pay an average of just $925 for rent, and median home prices currently on the market are around $150,000.

7. Kansas

kansas

Downtown scene of Lawrence, Kansas | Explore Lawrence via Facebook

  • Cost of living: 89.9
  • Grocery index: 93.8
  • Housing index: 76.5
  • Utilities index: 97.3
  • Transportation index: 93.0
  • Health index: 96.6
  • Miscellaneous: 95.6

We continue our tour of affordable Midwestern states with Kansas, which is also the first state on our list to be 10% or more below the national cost of living. Median rent in Kansas is slightly higher than in Missouri at an estimated $1,000, but median home values across the state are valued at $121,600. Houses on the market now are listed for a median sale price of $150,000.

6. Indiana

Indianapolis skyline at sunset

Indianapolis skyline | iStock.com/RudyBalasko

  • Cost of living: 89.5
  • Grocery index: 94.8
  • Housing index: 76.8
  • Utilities index: 92.8
  • Transportation index: 91.9
  • Health index: 94.2
  • Miscellaneous: 95.6

You’ll notice that in most of these states, housing is consistently the common low factor for keeping the cost of living low. Items like utilities and groceries can make a dent in your paycheck, but seeing as many people are spending 30% (or more, unfortunately) of their incomes on housing, low housing costs can most directly affect the overall cost of living. Rent in Indiana is a median $975, and the median listing price for houses right now is $139,900 — significantly cheaper than the listings in the previous two states.

5. Tennessee

Bridge at Downtown Chattanooga, Tennessee

Downtown Chattanooga, Tennessee | iStock.com/RobHainer

  • Cost of living: 89.4
  • Grocery index: 91.2
  • Housing index: 78.5
  • Utilities index: 92.0
  • Transportation index: 90.3
  • Health index: 90.5
  • Miscellaneous: 96.7

The Volunteer State has one of the higher housing indexes on our list, but the other indices are all relatively low. Transportation and health care are particularly affordable, at least compared to national averages. Relatively speaking, residents of Tennessee spend 10% less in both categories compared to the rest of the country. The current median listing price of homes in the state are at $179,000 — a bit higher than many of the others on this list. Rent is also a bit higher, with a median of $1,175.

4. Oklahoma

oklahoma city

Oklahoma City | SAUL LOEB/AFP/Getty Images

  • Cost of living: 89.2
  • Grocery index: 94.3
  • Housing index: 73.6
  • Utilities index: 98.7
  • Transportation index: 88.2
  • Health index: 93.5
  • Miscellaneous: 97.4

The housing index in Oklahoma is the second-lowest on our list, with consumers paying approximately 26% less for their homes than the national average. The median home value of properties in Oklahoma is $113,000, but Zillow experts predict the market is on the rise. The median listing price is $169,500, with average rent at $995 per month.

3. Michigan

Lansing, Michigan city

Lansing, Michigan | iStock.com/Henryk Sadura

  • Cost of living: 89.0
  • Grocery index: 90.6
  • Housing index: 76.6
  • Utilities index: 94.2
  • Transportation index: 99.3
  • Health index: 95.3
  • Miscellaneous: 92.9

Michigan is the only state on this year’s list not located in the Midwest or the South. This northern Rust Belt state earned its No. 3 ranking for relatively low grocery prices and housing costs, among other things. However, with Zillow showing a 7% cost increase for housing over the past year and an expected rise of another 3.9% over the next 12 months, it might not hold onto this ranking for long. Right now, houses are still at a median listing price of $149,900, with average rent at around $1,050.

2. Arkansas

Little Rock, AR, USA

Little Rock, Arkansas | iStock.com/csfotoimages

  • Cost of living: 87.1
  • Grocery index: 91.7
  • Housing index: 75.9
  • Utilities index: 96.0
  • Transportation index: 87.6
  • Health index: 87.2
  • Miscellaneous: 91.9

Though housing costs are relatively affordable in this Southern state, Arkansas also scored well in terms of transportation, health, and miscellaneous costs. In fact, among the 10 cheapest states on our list, Arkansas had the lowest indexes for those three categories. Aside from that, houses in the state have a median listing price of $150,000, with average rent sitting around $1,000.

1. Mississippi

Welcome to Mississippi

Welcome to Mississippi | iStock.com/Meinzahn

  • Cost of living: 85.9
  • Grocery index: 93.6
  • Housing index: 70.3
  • Utilities index: 85.3
  • Transportation index: 91.7
  • Health index: 91.5
  • Miscellaneous: 93.7

We stay in the South for the most affordable state in the country. According to MERIC’s findings, living in Mississippi costs around 11% less overall than what it costs to live in the United States on average. With a housing index of 70.3, Mississippi residents are paying almost 30% less for their homes than the average home buyer in the U.S. Median home values in the state are just $111,500, with current listing prices around a median of $150,000. Median rent prices are around $1,000, in line with many of the other affordable states in the country.

Follow Nikelle on Twitter and Facebook

More from Money & Career Cheat Sheet:

More Articles About:   , ,