What Are the Cheapest States to Live In 2026? Cost of Living Ranked
Mississippi is the cheapest state to live in 2026 with a housing score of 93.9/100 and a median home price of $253,000. Rankings combine cost of living index, home prices, utilities, childcare, and grocery costs from BEA, Census, and EIA data across all 50 states.
The 10 most affordable states in 2026
Housing costs eat more of the average American's paycheck than anything else. With the median home nationally at $394,620 and the average cost of living index at 97, affordability has become the dominant factor for anyone considering a move. We ranked all 50 states using BEA Regional Price Parities, Census median home prices, cost of living indices, and housing-to-income ratios.
Mississippi leads with an affordability score of 93.9/100. The median home price is $253,000 — 36% below the national average. Among the top 10, the average cost of living index is 89, meaning your dollar stretches roughly 11% further than average.
But cheap doesn't automatically mean good. Some affordable states rank poorly for safety or health. The smart question isn't "where is cheapest?" but "where can I get the most for what I spend?"
| Rank | State | Score | Median Home |
|---|---|---|---|
| #1 | Mississippi | 93.9 | $253,000 |
| #2 | Arkansas | 92.6 | $253,000 |
| #3 | Oklahoma | 90.8 | $244,000 |
| #4 | Louisiana | 90.8 | $249,000 |
| #5 | Kentucky | 87.6 | $263,000 |
| #6 | West Virginia | 87.2 | $249,000 |
| #7 | Iowa | 85.0 | $228,000 |
| #8 | North Dakota | 84.7 | $281,000 |
| #9 | South Dakota | 84.5 | $320,000 |
| #10 | Alabama | 84.2 | $281,000 |
#1: Mississippi
Mississippi leads the nation in affordability with a housing score of 93.9/100. The median home price is $253,000 — compared to the national average of $394,620 — and the cost of living index is 87 (100 = national average). That means a dollar goes roughly 13% further here than in the average state. Median household income of $52,985 creates a price-to-income ratio of just 4.8x.
The income tax rate is 4.4% with a total tax burden of 9.06%. Groceries index at 88.2 (national = 100), and electricity runs 12.7 cents per kWh. Safety is a plus — the violent crime rate of 270 per 100K is below the national average. The composite score of 31.5/100 (rank #48) shows that affordability is just one piece — Mississippi also scores 93.9 in affordability.
#2: Arkansas
Arkansas scores 92.6/100 in affordability. A median home price of $253,000 paired with a cost of living index of 87 makes it one of the most affordable places in the country. The median income of $56,335 gives a price-to-income ratio of 4.5x — meaning the average household could buy a home for about 4.5 years of gross income.
The income tax rate is 3.9% with a total tax burden of 8.61%. Groceries index at 88.7 (national = 100), and electricity runs 12.1 cents per kWh. One trade-off: the violent crime rate of 579 per 100K is well above the national average. The composite score of 30.9/100 (rank #49) shows that affordability is just one piece — Arkansas also scores 92.6 in affordability.
#3: Oklahoma
Oklahoma scores 90.8/100 in affordability. A median home price of $244,000 paired with a cost of living index of 88 makes it one of the most affordable places in the country. The median income of $60,528 gives a price-to-income ratio of 4.0x — meaning the average household could buy a home for about 4.0 years of gross income.
The income tax rate is 4.75% with a total tax burden of 7.01%. Groceries index at 90.7 (national = 100), and electricity runs 11.6 cents per kWh. One trade-off: the violent crime rate of 434 per 100K is above the national average. The composite score of 41.5/100 (rank #42) shows that affordability is just one piece — Oklahoma also scores 90.8 in affordability.
#4: Louisiana
Louisiana comes in at #4 with a housing score of 90.8/100. Median homes cost $249,000 and the cost of living index sits at 88. With a median income of $55,416, the price-to-income ratio is 4.5x.
The income tax rate is 3% with a total tax burden of 8.94%. Groceries index at 92.6 (national = 100), and electricity runs 11.9 cents per kWh. One trade-off: the violent crime rate of 520 per 100K is well above the national average. The composite score of 25.9/100 (rank #50) shows that affordability is just one piece — Louisiana also scores 90.8 in affordability.
#5: Kentucky
Kentucky comes in at #5 with a housing score of 87.6/100. Median homes cost $263,000 and the cost of living index sits at 90. With a median income of $60,407, the price-to-income ratio is 4.4x.
The income tax rate is 6.2% with a total tax burden of 8.93%. Groceries index at 90.7 (national = 100), and electricity runs 12.4 cents per kWh. Safety is a plus — the violent crime rate of 218 per 100K is well below the national average. The composite score of 38.4/100 (rank #45) shows that affordability is just one piece — Kentucky also scores 87.6 in affordability.
#6: West Virginia
West Virginia comes in at #6 with a housing score of 87.2/100. Median homes cost $249,000 and the cost of living index sits at 90. With a median income of $54,515, the price-to-income ratio is 4.6x.
The income tax rate is 4.82% with a total tax burden of 8.85%. Groceries index at 90.3 (national = 100), and electricity runs 12.5 cents per kWh. Safety is a plus — the violent crime rate of 285 per 100K is below the national average. The composite score of 34.4/100 (rank #46) shows that affordability is just one piece — West Virginia also scores 87.2 in affordability.
#7: Iowa
Iowa comes in at #7 with a housing score of 85.0/100. Median homes cost $228,000 and the cost of living index sits at 89. With a median income of $72,429, the price-to-income ratio is 3.1x.
The income tax rate is 3.8% with a total tax burden of 9.23%. Groceries index at 92 (national = 100), and electricity runs 14.3 cents per kWh. Safety is a plus — the violent crime rate of 295 per 100K is below the national average. The composite score of 69.5/100 (rank #15) shows that affordability is just one piece — Iowa also scores 85.0 in affordability.
#8: North Dakota
At #8, North Dakota scores 84.7/100 in affordability. Homes run $281,000 at the median, the cost of living index is 89, and a price-to-income ratio of 3.9x keeps homeownership accessible.
The income tax rate is 2.5% with a total tax burden of 6.61%. Groceries index at 93.9 (national = 100), and electricity runs 11.8 cents per kWh. Safety is a plus — the violent crime rate of 267 per 100K is below the national average. The composite score of 76.6/100 (rank #7) shows that affordability is just one piece — North Dakota also scores 84.7 in affordability.
#9: South Dakota
At #9, South Dakota scores 84.5/100 in affordability. Homes run $320,000 at the median, the cost of living index is 88, and a price-to-income ratio of 4.4x keeps homeownership accessible.
The state charges no income tax, though the total tax burden is 6.46%. Groceries index at 93.2 (national = 100), and electricity runs 13.1 cents per kWh. Safety is a plus — the violent crime rate of 330 per 100K is near the national average. The composite score of 81.8/100 (rank #2) shows that affordability is just one piece — South Dakota also scores 89.8 in education.
#10: Alabama
At #10, Alabama scores 84.2/100 in affordability. Homes run $281,000 at the median, the cost of living index is 90, and a price-to-income ratio of 4.7x keeps homeownership accessible.
The income tax rate is 4.15% with a total tax burden of 7.99%. Groceries index at 90.5 (national = 100), and electricity runs 14.6 cents per kWh. One trade-off: the violent crime rate of 424 per 100K is above the national average. The composite score of 38.9/100 (rank #44) shows that affordability is just one piece — Alabama also scores 84.2 in affordability.
Affordable and actually good
The best-case scenario is a state that's cheap and scores well overall. Among our top 10 affordable states, 3 also have composite scores above 55 (the midpoint). Iowa and North Dakota and South Dakota stand out as affordable states that don't sacrifice quality of life.
The price-to-income ratio is a better measure than home price alone. The national average is 5.2x — meaning the typical home costs 5.2 times the median annual income. Among the 10 most affordable states, the average ratio drops to 4.3x. That's the difference between a 15-year and a 30-year mortgage being comfortable.
The most expensive states
The other side of the coin: California, Hawaii, Massachusetts, New York, Washington are the five most expensive states to live in. California has a median home price of $833,000, a cost of living index of 113, and a price-to-income ratio of 9.1x.
Expensive states aren't worse by default. Many of the priciest states also have higher median incomes, better healthcare, and stronger job markets. California's median income is $91,905 — 23% above the national average. The question is whether the income premium offsets the higher costs, and that depends on your specific situation.
The real cost of cheap
Low cost of living often correlates with lower incomes, fewer job opportunities, and less access to amenities. The average median income among the 10 cheapest states is $61,709 — 17% below the national average.
That said, what matters is purchasing power: income relative to cost. If you earn 10% less but spend 20% less, you come out ahead. States like Mississippi (COL index: 87, income: $52,985) offer genuine value. For remote workers earning coastal salaries while living in low-cost states, the math gets even better.
Frequently Asked Questions
Q:What is the cheapest state to live in 2026?
Mississippi is the most affordable state in 2026 with a housing score of 93.9/100, a median home price of $253,000, and a cost of living index of 87 (where 100 = national average). That means a dollar stretches roughly 13% further here than in the average state. The state's price-to-income ratio of 4.8x means the median home costs about 4.8 years of gross income — well below the national average of 5.2x. Rankings combine seven cost metrics including home prices, utilities, childcare, and groceries from Census, BEA, and EIA data.
Q:What state has the lowest cost of living?
Mississippi has the lowest cost of living index at 87, meaning goods and services cost about 13% less than the national average. The cost of living index is calculated from BEA Regional Price Parities and covers housing, food, transportation, healthcare, and other consumer goods. A low COL index means your salary buys more — for a household earning $75,000, living in Mississippi versus a state with a COL index of 120 could mean thousands of dollars more in real purchasing power annually. However, cost of living and affordability scores are not identical — our affordability ranking also factors in home prices, utilities, childcare, and groceries.
Q:Which cheap state has the best quality of life?
Among the 10 most affordable states, South Dakota has the highest overall composite score at 81.8/100, making it the best value state — affordable and actually good to live in. This state scores well across economy, safety, health, and education in addition to having low costs. 3 of the top 10 affordable states have composite scores above 55, meaning they offer genuine quality of life at below-average costs. The best approach is to find states where affordability and overall quality of life overlap rather than optimizing for cost alone.
Q:Is it worth moving to a cheaper state?
It depends on your income source and personal priorities. Remote workers earning fixed salaries benefit most from low-cost states — a software engineer earning $150,000 remotely in a state with a COL index of 87 gains roughly $19,500 in purchasing power compared to living in a state with a COL index of 120. If your income is tied to the local job market, you need to compare purchasing power (income relative to costs), not just costs alone. Some affordable states have lower incomes that offset the savings. Consider the total picture: will your specific career pay well locally? Does the state score well for the things you care about — schools, safety, healthcare? Can you access the amenities and social life you need? Moving purely for cost savings while ignoring quality of life often leads to regret.
Q:What's a good price-to-income ratio for housing?
A price-to-income ratio below 3.5x is generally considered affordable, meaning the median home costs less than 3.5 times the median annual household income. At 3.5x, a household earning $70,000 could reasonably afford a $245,000 home. The national average is 5.2x. Among the 10 cheapest states, the average ratio is 4.3x — making homeownership achievable for median-income families. Ratios above 5x start to create significant affordability pressure, and above 7x typically means homeownership is out of reach without a large down payment, dual incomes, or family wealth. The most expensive states have ratios exceeding 8-10x, where the median home costs nearly a decade of gross income.