Cheapest States to Live In 2026: Cost of Living Ranked

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?"

#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 31.4/100 (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 29.9/100 (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 41.8/100 (rank #41) 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 25.2/100 (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 38.0/100 (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 32.5/100 (rank #47) 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 68.7/100 (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 77.1/100 (rank #6) 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 80.2/100 (rank #3) 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 39.4/100 (rank #42) 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.