The 15 Least Expensive States to Live in the U.S.

cheapest states to live in the us 2017

Location is key when buying a home. | 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.

We want homes in close proximity to family and friends, good schools, and an abundance of entertainment options. But these amenities come with a price. How much does it cost to live in a certain area, and can you afford to do so?

The most and least expensive states

While home prices are generally back on the rise, there are still remarkable differences depending on which state you choose to call home. A single-family, three-bedroom home in Jackson, Mississippi, might cost you around $50,000. Meanwhile, a new condo with similar square footage in San Francisco could cost an astounding $4.5 million. The only explanation: The condo is located in a city with astronomical job opportunities and 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 least expensive states is a good place to start. The Missouri Economic Research and Information Center compiled a list of the cheapest states for 2016, ranked by overall cost of living index. We’ve narrowed it down to the 15 most cost-effective locations. Are you already living in one of the least expensive states? Let’s find out.

Editor’s note: Zillow prices were updated as of March, 24, 2017.

15. Iowa

tree-lined street in Iowa City

Iowa City | Iowa City Government via Facebook

  • Cost of living: 91.7
  • Grocery index: 95.3
  • Housing index: 81.4
  • Utilities index: 95.4
  • Transportation index: 96.7
  • Health index: 97.8
  • Miscellaneous: 95.2

The Missouri Economic Research and Information Center used the nationwide average costs for each of these categories at the base. As a result, we see the overall cost of living in Iowa is 8.3% 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.) Even though Hawkeye State residents live in the No. 15 state on our list, we see index averages noticeably lower than average across the board.

14. Georgia

Columbus, Georgia, USA

Columbus, Georgia |

  • Cost of living: 91.4
  • Grocery index: 99.1
  • Housing index: 75.8
  • Utilities index: 96.1
  • Transportation index: 93.3
  • Health index: 98.1
  • Miscellaneous: 98

With a cost of living index lower than most, life in Georgia will be peachy. Transportation costs will also be kind to your wallets, at least compared to the national average. They’re about 6.7% lower than average. Housing prices vary in certain cities, but the median price statewide is about $200,000.

13. Nebraska

'Welcome to Nebraska' sign board on a empty road

Fields in Nebraska |

  • Cost of living: 91.3
  • Grocery index: 96.2
  • Housing index: 85.3
  • Utilities index: 87
  • Transportation index: 93.8
  • Health index: 97.8
  • Miscellaneous: 93.7

Why are people from the Midwest always so nice and happy? Maybe it’s because of all that extra dough in their wallets. With respectable scores in all categories, residents of the Cornhusker State can spend their hard-earned money elsewhere. We see higher averages in health and groceries than some on this list, but they’re equally matched with lower scores where it counts: housing and utilities. In fact, median home prices are valued at only $176,950.

12. Alabama

scene of downtown Huntsville, Alabama

Huntsville, Alabama |

  • Cost of living: 91.2
  • Grocery index: 97.7
  • Housing index: 74
  • Utilities index: 106.1
  • Transportation index: 92.9
  • Health index: 87.5
  • Miscellaneous: 98

We move back to the South to find our next cheapest state. Alabama is about 6% more expensive than average for utilities, but it makes up for it with one of the lowest housing prices. You can expect to pay about $174,900 for a home in Alabama or rent for $995.

11. Missouri

St. Louis

St. Louis | Karen Bleier/AFP/Getty Images

  • Cost of living: 90.8
  • Grocery index: 96.7
  • Housing index: 75.4
  • Utilities index: 103.4
  • Transportation index: 93.4
  • Health index: 97.4
  • Miscellaneous: 95.5

Relatively low housing costs put Missouri as the No. 11 most affordable state in the nation. The state enjoys housing prices generally 25% cheaper than the rest of the country. You’ll pay an average of just $925 for rent, and median home prices on the market are around $150,000.

10. Kentucky

Kentucky Derby

Churchill Downs in Kentucky | Elsa/Getty Images

  • Cost of living: 90.8
  • Grocery index: 88.9
  • Housing index: 80.5
  • Utilities index: 93.4
  • Transportation index: 97.4
  • Health index: 88.7
  • Miscellaneous: 97.3

You’ll likely pay less for your cart of groceries while living in Kentucky. Food costs are about 11.1% lower in the Bluegrass State compared to national averages, according to the report. 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.

9. Texas

Austin Texas Reflections Lady Bird Lake

Austin, Texas |

  • Cost of living: 90.7
  • Grocery index: 89.5
  • Housing index: 84.5
  • Utilities index: 95.4
  • Transportation index: 93.7
  • Health index: 95.2
  • Miscellaneous: 93.4

At a housing index of 84.5, Texas is the second highest among the states on this list. However, home prices are still relatively affordable. The median home value in the Lone Star state is $163,100, according to Zillow. And the median listing price of houses for sale is a much higher $254,100. If you plan to rent instead, the average price is $1,450 per month.

8. Kansas


Downtown of Lawrence, Kansas | Explore Lawrence via Facebook

  • Cost of living: 90.4
  • Grocery index: 93.6
  • Housing index: 77.4
  • Utilities index: 97.3
  • Transportation index: 92.5
  • Health index: 97.1
  • Miscellaneous: 96.1

We continue our tour of affordable Midwestern states with Kansas, which is about 10% below the national cost of living. Median rent in Kansas is slightly higher than in Missouri at an estimated $1,050, but median home values across the state are about $124,400. Houses on the market now are listed for a median sale price of $149,900.

7. Tennessee

Bridge at Downtown Chattanooga, Tennessee

Downtown Chattanooga, Tennessee |

  • Cost of living: 89.8
  • Grocery index: 92.7
  • Housing index: 77.5
  • Utilities index: 91.8
  • Transportation index: 89.9
  • Health index: 90
  • Miscellaneous: 97.5

The Volunteer State has a lower-than-average housing index. Plus, transportation and health care are particularly affordable, at least compared to national averages. The median listing price of homes in the state are at $175,000 — a bit higher than many of the others on this list. Rent is also a bit higher, with a median of $1,195.

6. Idaho

sun valley, idaho

Sun Valley, Idaho | Mark Davis/Getty Images for Sun Valley Film Festival

  • Cost of living: 89.6
  • Grocery index: 85.4
  • Housing index: 77.8
  • Utilities index: 89.0
  • Transportation index: 106.1
  • Health index: 101.9
  • Miscellaneous: 94.8

Idaho ranks sixth on our list of cheapest states for cost of living, and it also acts as our most western state. With many categories falling over 10% lower than the national average, it seems you’ll have no trouble adapting to life in Idaho. But adapt quickly. Home prices have risen dramatically in recent years, and they are expected to continue by 3.6% in 2017. The median Idaho home price is $249,000.

5. Oklahoma

oklahoma city

Oklahoma City | Saul Loeb/AFP/Getty Images

  • Cost of living: 88.6
  • Grocery index: 93
  • Housing index: 76.7
  • Utilities index: 94.9
  • Transportation index: 88.1
  • Health index: 93.6
  • Miscellaneous: 94.1

The housing index in Oklahoma is quite low on our list, with consumers paying approximately 23% less for their homes than the national average. The median home value of properties in Oklahoma is $114,800, but Zillow experts predict the market is on the rise. The median listing price is $169,900, with average rent at $995 per month.

4. Arkansas

Little Rock, AR, USA

Little Rock, Arkansas |

  • Cost of living: 88.5
  • Grocery index: 92.7
  • Housing index: 77.7
  • Utilities index: 97.1
  • Transportation index: 89.1
  • Health index: 87.8
  • Miscellaneous: 92.8

Although housing costs are very affordable in this state, Arkansas also scored well in terms of health and transportation costs. Houses in the state have a median listing price of $150,000, with average rent sitting around $1,000.

3. Michigan

Lansing, Michigan city

Lansing, Michigan | Sadura

  • Cost of living: 88.2
  • Grocery index:89.6
  • Housing index: 77.1
  • Utilities index: 95.5
  • Transportation index: 97.6
  • Health index: 93.3
  • Miscellaneous: 91

We head north for our next cheapest state. 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 7.5% cost increase for housing in 2016 and an expected rise of another 3% in 2017, it might not hold on to this ranking for long. Right now, houses are still at a median listing price of $147,900, with average rent at around $1,000.

2. Indiana

Indianapolis skyline at sunset

Indianapolis skyline |

  • Cost of living: 87.9
  • Grocery index: 92.4
  • Housing index: 75.8
  • Utilities index: 91.1
  • Transportation index: 91.6
  • Health index: 94.9
  • Miscellaneous: 92.9

You’ll notice in most of these states, housing is consistently the common factor for keeping the cost of living low. Seeing as most people spend a good portion of their incomes on housing, low housing costs can most directly affect the overall cost of living. Rent in Indiana is a median $1,000, and the median listing price for houses is $139,900.

1. Mississippi

Welcome to Mississippi

Welcome to Mississippi |

  • Cost of living: 86
  • Grocery index: 94.1
  • Housing index: 68.4
  • Utilities index: 89.6
  • Transportation index: 93.1
  • Health index: 89.9
  • Miscellaneous: 93.2

We stay in the South for the most affordable state in the country. According to the report, living in Mississippi costs around 14% less overall than what it costs to live in the United States on average. With a housing index of 68.4, Mississippi residents are paying over 30% less for their homes than the average home buyer in the U.S. Median home values in the state are just $112,000, with current listing prices around a median of $160,000. And median rent prices are around $1,050, in line with many of the other affordable states in the country.

Nikelle Murphy also contributed to this article.

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