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12 Cheapest States To Live In [Updated 2022]

Written by Than Merrill
| Reviewed by Paul Esajian

Cost of living often plays a huge role for those trying to decide where to settle roots, start a family, or even start a business. One key metric used to measure affordability is the cost of housing in a given area. According to the Council for Community and Economic Research, the average price of a four-bedroom house in the U.S. is $366,000. Housing costs vary greatly depending on where you live. In some expensive zip codes, a comparable home could even cost a few million dollars. Are you looking to lower your cost of living? By researching some of the most affordable states to live in, those looking for a new home can strategically save thousands by simply choosing a location with an affordable cost of living.

In this article, FortuneBuilders navigates the cheapest states to live in 2022, what determines state affordability, as well as a few of the most expensive states to live in. We’ve rounded up 12 of the cheapest states to live in so you can explore their real estate markets and determine if that’s the state for you.

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cheapest states to live in USA

The Cheapest States To Live In: Factors To Consider

Housing affordability is no longer just about the price of a property. While the location plays a role in an area’s popularity, a few key factors are considered when evaluating which states have the cheapest cost of living. Outside of the cost of living, other factors might play a role in how affordable a piece of property might be state by state. The main factors that affect determining the most affordable states to live in include:

  • Cost of Living: Cost of living refers to the average price of everyday and basic necessities within an area. This includes food, utilities, transportation, clothing, and healthcare costs. Cost of living is the amount of money someone would need to access the minimum standard of living within a particular area.

  • Average Household Income: Household income is the amount of money collected within the combined incomes of all people sharing a residence. All forms of income are included, such as salaries, investments, retirement funding, and any investment gains.

  • Housing and Property Costs: The baseline of how many view the affordability of a location is the price of standard housing. This includes the average amount it would cost to rent an apartment or purchase a home in a particular area.

  • Taxes: Taxes vary from state to state, so it’s a good idea to look at the tax rates and any tax benefits that those states may offer. For example, there are multiple states that don’t have income tax, which can save you a lot of money. There are also other tax benefits that some states may offer outside of income related taxes. For example, Minnesota doesn’t charge sales tax on clothing or grocery foods.

How Are The Cheapest States To Live In Determined?

With the amount of options for purchasing property, it’s natural to wonder what determines the states included in FortuneBuilder’s guide. The Council for Community and Economic Research is an organization that measures cost of living across the United States. Their Cost of Living Index is a well-regarded and often-cited resource for comparing living costs from state to state. In this guide, we focused on the Council’s reported indexes of overall cost of living, grocery costs, housing costs, and transportation costs of each state.

Each index is compared against a national average score of 100 in each category. For example, the score of 100 would be the national average for housing costs. Any state with a housing cost index below 100 is relatively affordable compared to the national average. Our ranking of the 12 cheapest states to live in was curated by weighing these different indexes. The scores can change year-over-year and do not consider personal preferences such as available industries or climate.

12 Most Affordable States To Live In

Without further ado, the U.S. states with the lowest cost of living are revealed below. Keep reading to take a quick tour of the United States, as we make a pit stop at 12 different states to explore why they are the most affordable in the nation. If you’re looking to invest in properties or establish new roots in a part of the country with affordable housing and cost of living, check out our top 12 cheapest states to live in 2022:

  1. Mississippi

  2. Oklahoma

  3. Arkansas

  4. Kansas

  5. Missouri

  6. Georgia

  7. Alabama

  8. New Mexico

  9. Tennessee

  10. Indiana

  11. Iowa

  12. Kentucky

1. Mississippi

Mississippi is ranked the most affordable state in the U.S. overall. At 66.7, its housing cost index is the cheapest in the country. The Hospitality State has a median home value of $128,600, and renters enjoy a low monthly expense of $612 for a one-bedroom apartment. With grocery and transportation costs below the national average as well, Mississippi offers plenty of southern charm.

  • Cost of Living Index: 84.8

  • Grocery Cost Index: 93.1

  • Housing Cost Index: 66.7

  • Transportation Cost Index: 89.9

2. Oklahoma

The overall cost of living in Oklahoma is 86.8, making the Sooner State very affordable. You can expect to buy a home for around $124,800, and there’s ample land to build a house if you wish. If you prefer to live in a bigger city, you’re in luck because the state is home to one of America’s most affordable cities: Oklahoma City. Expect to pay a low monthly rent of about $629 for a one-bedroom if you prefer to rent.

  • Cost of Living Index: 86.8

  • Grocery Cost Index: 94.1

  • Housing Cost Index: 70.1

  • Transportation Cost Index: 91.3

3. Arkansas

Coming in third for overall cost of living at 87.8, Arkansas has a lot to offer for those looking to slash their budget. This state offers low housing, health care, and transportation costs. If you want to make this Natural State your future home, make note that Wal-Mart, Tyson Foods, and Baptist Health are major employers.

  • Cost of Living Index: 87.8

  • Grocery Cost Index: 90.7

  • Housing Cost Index: 75.2

  • Transportation Cost Index: 86.1

cheap states to live

4. Kansas

When Dorothy of Wizard of Oz said, “there’s no place like home,” perhaps she was also alluding to Kansas’ low cost of living. With a housing cost index of 71.8, Kansas puts itself on the map as one of the cheapest places to live in the U.S. You could buy a median-priced home in the Sunflower State at $137,700. As a one-bedroom renter, expect to pay around $645.

  • Cost of Living Index: 87.9

  • Grocery Cost Index: 92.8

  • Housing Cost Index: 71.8

  • Transportation Cost Index: 94.8

5. Missouri

If you’re looking to balance a low cost of living with economic opportunity, Missouri could be just the locale for you. Its overall cost of living score is 88.9, with a housing score of 71.6. Both scores are very low compared to national averages. This state is home to many economic opportunities focusing on healthcare, bioscience, advanced manufacturing, and professional services.

  • Cost of Living Index: 88.9

  • Grocery Cost Index: 97.6

  • Housing Cost Index: 71.6

  • Transportation Cost Index: 93.9

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6. Georgia

With a housing cost score of 71.3, Georgia turns out to be quite a peach. With an overall cost of living score of 89.4, you are likely to find a very affordable home in this Southeastern state. The city of Atlanta may be relatively more expensive, but you can easily find beautiful urban areas in which to grow your roots. The median home price is $186,500.

  • Cost of Living Index: 89.4

  • Grocery Cost Index: 99.0

  • Housing Cost Index: 71.3

  • Transportation Cost Index: 91.3

7. Alabama

Home to a major university and a rich history in the civil rights movement, Alabama is anything but boring. With a cost of living index of 89.4 and a low housing cost index of 70.2, one of the lowest in the nation, it offers opportunities to those looking to reduce their housing budgets. Alabama’s median home price is just $129,300. Birmingham has a median home price of $65,500, showing pockets with even cheaper housing. Those seeking employment might look towards one of Alabama’s thriving industries, including tech, auto, and aeronautic.

  • Cost of Living Index: 89.4

  • Grocery Cost Index: 95.1

  • Housing Cost Index: 70.2

  • Transportation Cost Index: 92.3

what is the cheapest state to live in

8. New Mexico

New Mexico, otherwise known as the Land of Enchantment, is the third most affordable place to live, with an overall cost of living index of 89.6. Home to three Air Force bases, the state attracts federal government spending on military and research. The state economy also thrives off of oil, gas, and tourism. You can expect to buy a home at around $193,200.

  • Cost of Living Index: 89.6

  • Grocery Cost Index: 99.0

  • Housing Cost Index: 80.4

  • Transportation Cost Index: 93.0

9. Tennessee

Tennessee boasts affordable housing with an index of 82.6, one of the lowest in the nation. The state economy runs on agriculture and trade, and it helps that transportation costs are so low. If you were to relocate to Tennessee, you would enjoy the lack of state income tax, as well as low grocery costs.

  • Cost of Living Index: 90.2

  • Grocery Cost Index: 94.5

  • Housing Cost Index: 82.6

  • Transportation Cost Index: 87.7

10. Indiana

We’re getting lower on our list, but Indiana is still one of the most affordable places to live in the U.S. In many cases, major cities are more expensive relative to smaller suburbs. In contrast, Indiana’s capital, Indianapolis, is one of the nation’s most affordable cities. If you want to lower your living costs but want to live in a big city, Indiana could be a great option. The Hoosier state’s median house price is $142,500.

  • Cost of Living Index: 90.4

  • Grocery Cost Index: 92.3

  • Housing Cost Index: 76.5

  • Transportation Cost Index: 99.4

most affordable states to live

11. Iowa

Are you someone looking to balance your living costs with good healthcare and education? Iowa could be the future home for you. With the third-best healthcare system and fifth-best education system in the nation, Iowa is no state to skip over. Its capital, Des Moines, has been ranked as one of the most affordable cities in the U.S. It is also ranked as one of the best places to live. With an extremely low housing cost index of 61.1, you can expect to buy a home at a median price of $140,800. Transportation costs are notably affordable, about 8 percent less than the national average.

  • Cost of Living Index: 83.7

  • Grocery Cost Index: 94.4

  • Housing Cost Index: 61.1

  • Transportation Cost Index: 71.4

12. Kentucky

Last but not least, Kentucky is one of the cheapest states to live in the U.S. If you have a lot of food costs, such as feeding a large family, note that Kentucky residents pay about 9 percent less in grocery costs than those living in other states. Housing and transportations costs are notably low as well. If you wish to buy a home, the median price is $146,000.

  • Cost of Living Index: 83.6

  • Grocery Cost Index: 94.2

  • Housing Cost Index: 63.3

  • Transportation Cost Index: 89.1

The Most Expensive States In 2022

Now that we’ve explored some of the cheapest states to live in, it’s smart to also consider the other side of the coin. The most expensive states are determined using many of the same criteria as the affordable states by analyzing the cost of living, property prices, and average household income. Based on the Cost of Living Index, some of the most expensive states to live in 2022 include:


  • Cost of Living Index: 196.3

  • Grocery Cost Index: 167.7

  • Housing Cost Index: 336.3

  • Transportation Cost Index: 138.8

District of Columbia

  • Cost of Living Index: 161.1

  • Grocery Cost Index: 115.8

  • Housing Cost Index: 279.2

  • Transportation Cost Index: 108


  • Cost of Living Index: 138.5

  • Grocery Cost Index: 117.3

  • Housing Cost Index: 196.5

  • Transportation Cost Index: 132.4


  • Cost of Living Index: 134.6

  • Grocery Cost Index: 113.8

  • Housing Cost Index: 184.8

  • Transportation Cost Index: 129.4

New York

  • Cost of Living Index: 133.7

  • Grocery Cost Index: 113.4

  • Housing Cost Index: 197.5

  • Transportation Cost Index: 105


Of the nation’s cheapest states to live in, Mississippi took the title as most affordable overall. However, any of the twelve states that made it into our rankings will offer you significant savings. Most of your decision-making will be influenced by personal incentives and preferences, such as the affordability of big cities within those states, or cost of healthcare or transportation. If you have a family or are thinking about starting one, then naturally, education system rankings will play a large role. We hope this guide of the 12 most affordable states will help you narrow down your search.

Of these 12 most affordable states to live in, which one would you choose? What are some of the factors that influenced your decision? Let us know in the comments below!

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