CostOfLivingByState

The 10 Cheapest States to Live in 2026

Where your dollar genuinely goes furthest. Every state on this list prices below 90.1 on the BEA all-items regional price parity for 2024, against a national 100.0. Each card below has the full breakdown: housing rents, taxes, median income, and the honest trade-offs.

At a glance

Top 10 ranked side by side

RankStateAll itemsHousing rentsMedian HomeMedian 2BR RentMedian Income
#1Arkansas86.958.2$215,600$934$62,106
#2Mississippi87.056.5$186,500$963$59,127
#3Iowa87.865.3$227,300$1,003$75,501
#4Oklahoma87.862.8$222,100$1,032$66,148
#5Louisiana88.263.1$223,200$1,041$60,986
#6South Dakota88.667.6$289,600$1,071$76,881
#7Alabama88.861.8$233,300$1,048$66,659
#8North Dakota89.071.4$266,100$950$77,871
#9West Virginia89.554.2$170,800$906$60,798
#10Kansas90.171.2$238,700$1,082$75,514

Per-state breakdown

Each state in detail

Rank #1

Arkansas

86.9

overall index

Best for: NWA tech and corporate workers

Housing rents58.2very low
Goods93.6low
Utilities74.7very low
Other services95.3average

Median home

$215,600

Median 2BR rent

$934

Median household income

$62,106

Tax snapshot

Income: 2-3.9%
Property: 0.57%
Sales: 6.50%

What $80,000 buys here

$80,000 in Arkansas has the same purchasing power as $69,520 at the national average.

Pros

  • +Northwest Arkansas (Bentonville, Fayetteville) is a corporate hub for Walmart, Tyson, J.B. Hunt
  • +Property tax 0.57%, well below average
  • +Outdoor amenities are exceptional, particularly the Ozarks
  • +Walton Foundation has invested heavily in NWA cultural infrastructure

Cons

  • -NWA housing is rising fast and now well above the state average
  • -Income tax up to 3.9%
  • -Healthcare quality outside metros is weak
  • -Education rankings remain in the bottom 15 nationally

Rank #2

Mississippi

87.0

overall index

Best for: Lowest absolute cost

Housing rents56.5very low
Goods96.2average
Utilities78.4very low
Other services96.1average

Median home

$186,500

Median 2BR rent

$963

Median household income

$59,127

Tax snapshot

Income: 4%
Property: 0.63%
Sales: 7.00%

What $80,000 buys here

$80,000 in Mississippi has the same purchasing power as $69,600 at the national average.

Pros

  • +Second-lowest median home value in the US at $186,500 (Census ACS 2024)
  • +No tax on Social Security and a flat 4% income tax (2026)
  • +Property tax is only 0.63% effective, well below national average
  • +Long growing season and warm climate

Cons

  • -Median household income $59,127, the lowest in the US (Census ACS 2024)
  • -Healthcare access scores poorly; rural hospital closures are ongoing
  • -Education rankings are persistently in the bottom three nationally
  • -Hurricane and tornado exposure raises insurance premiums

Rank #3

Iowa

87.8

overall index

Best for: Families and education

Housing rents65.3very low
Goods93.7low
Utilities83.3very low
Other services92.9low

Median home

$227,300

Median 2BR rent

$1,003

Median household income

$75,501

Tax snapshot

Income: 3.8%
Property: 1.43%
Sales: 6.00%

What $80,000 buys here

$80,000 in Iowa has the same purchasing power as $70,240 at the national average.

Pros

  • +Top-quartile K-12 education statewide
  • +Low uninsured rate (4.8%) and strong rural healthcare
  • +Median home value $227,300, with a BEA housing rents parity of 65.3
  • +Stable, diverse Midwest economy

Cons

  • -Property tax 1.43%, above national average
  • -Income tax now a flat 3.8%, but property tax stays high
  • -Severe winters increase utility costs
  • -Population is older and growing slowly

Rank #4

Oklahoma

87.8

overall index

Best for: Energy industry workers

Housing rents62.8very low
Goods93.8low
Utilities73.9very low
Other services95.5average

Median home

$222,100

Median 2BR rent

$1,032

Median household income

$66,148

Tax snapshot

Income: 2.5-4.5%
Property: 0.85%
Sales: 4.50%

What $80,000 buys here

$80,000 in Oklahoma has the same purchasing power as $70,240 at the national average.

Pros

  • +Median home value $222,100 (Census ACS 2024)
  • +Income tax tops out at 4.5% after the 2026 bracket consolidation
  • +Strong energy sector wages in OKC and Tulsa
  • +Low utility bills outside summer cooling season

Cons

  • -Highest uninsured rate in the cheap states list at 13.2%
  • -Combined sales tax can hit 9% in some cities
  • -Tornado and severe weather exposure
  • -Healthcare quality lags national norms

Rank #5

Louisiana

88.2

overall index

Best for: Low overall price level

Housing rents63.1very low
Goods93.7low
Utilities71.5very low
Other services95.7average

Median home

$223,200

Median 2BR rent

$1,041

Median household income

$60,986

Tax snapshot

Income: 3%
Property: 0.52%
Sales: 5.00%

What $80,000 buys here

$80,000 in Louisiana has the same purchasing power as $70,560 at the national average.

Pros

  • +Housing rents price at 63.1 against a national 100.6
  • +Median home $223,200, median 2-bedroom rent $1,041 a month
  • +State income tax 3%, effective property tax 0.52 percent
  • +Utilities price at 71.5 against a national 98.4

Cons

  • -Median household income $60,986
  • -8.4 percent of residents are uninsured
  • -Broadband averages 155 Mbps
  • -No curated write-up yet: these points are read off the dataset rather than researched

Rank #6

South Dakota

88.6

overall index

Best for: Low overall price level

Housing rents67.6very low
Goods95.5average
Utilities79.7very low
Other services91.9low

Median home

$289,600

Median 2BR rent

$1,071

Median household income

$76,881

Tax snapshot

Income: 0%
Property: 1.14%
Sales: 4.20%

What $80,000 buys here

$80,000 in South Dakota has the same purchasing power as $70,880 at the national average.

Pros

  • +Housing rents price at 67.6 against a national 100.6
  • +Median home $289,600, median 2-bedroom rent $1,071 a month
  • +No state income tax
  • +Utilities price at 79.7 against a national 98.4

Cons

  • -Median household income $76,881
  • -8.2 percent of residents are uninsured
  • -Medicaid was not expanded
  • -No curated write-up yet: these points are read off the dataset rather than researched

Rank #7

Alabama

88.8

overall index

Best for: Southern lifestyle on a budget

Housing rents61.8very low
Goods96.4average
Utilities84.6very low
Other services96.7average

Median home

$233,300

Median 2BR rent

$1,048

Median household income

$66,659

Tax snapshot

Income: 2-5%
Property: 0.39%
Sales: 4.00%

What $80,000 buys here

$80,000 in Alabama has the same purchasing power as $71,040 at the national average.

Pros

  • +One of the lowest effective property tax rates in the country at 0.39%
  • +Median home value $233,300 (Census ACS 2024)
  • +Tuscaloosa, Huntsville, and Birmingham offer strong job markets
  • +Mild winters reduce heating costs

Cons

  • -Sales tax can climb past 10% combined in cities
  • -Groceries are still taxed (2% state rate since September 2025, plus local)
  • -Healthcare access is uneven outside metros
  • -Education rankings are consistently below average

Rank #8

North Dakota

89.0

overall index

Best for: Low overall price level

Housing rents71.4very low
Goods95.7average
Utilities73.7very low
Other services91.2low

Median home

$266,100

Median 2BR rent

$950

Median household income

$77,871

Tax snapshot

Income: 1.95-2.5%
Property: 0.94%
Sales: 5.00%

What $80,000 buys here

$80,000 in North Dakota has the same purchasing power as $71,200 at the national average.

Pros

  • +Housing rents price at 71.4 against a national 100.6
  • +Median home $266,100, median 2-bedroom rent $950 a month
  • +State income tax 1.95-2.5%, effective property tax 0.94 percent
  • +Utilities price at 73.7 against a national 98.4

Cons

  • -Median household income $77,871
  • -6.8 percent of residents are uninsured
  • -Broadband averages 140 Mbps
  • -No curated write-up yet: these points are read off the dataset rather than researched

Rank #9

West Virginia

89.5

overall index

Best for: Outdoor enthusiasts and retirees

Housing rents54.2very low
Goods96.5average
Utilities92.2low
Other services99.9average

Median home

$170,800

Median 2BR rent

$906

Median household income

$60,798

Tax snapshot

Income: 2.11-4.58%
Property: 0.53%
Sales: 6.00%

What $80,000 buys here

$80,000 in West Virginia has the same purchasing power as $71,600 at the national average.

Pros

  • +Lowest median home value in the US at $170,800 (Census ACS 2024)
  • +Property tax just 0.53%
  • +Medicare-friendly state with no tax on Social Security
  • +Public lands and outdoor recreation in abundance

Cons

  • -Population is shrinking; some counties have lost healthcare facilities
  • -Limited high-paying job market outside DC commuter belt
  • -Broadband availability is the lowest in the country at 62%
  • -Aging population strains state services

Rank #10

Kansas

90.1

overall index

Best for: Stable plains living

Housing rents71.2very low
Goods94.0low
Utilities88.4low
Other services93.8low

Median home

$238,700

Median 2BR rent

$1,082

Median household income

$75,514

Tax snapshot

Income: 5.2-5.58%
Property: 1.28%
Sales: 6.50%

What $80,000 buys here

$80,000 in Kansas has the same purchasing power as $72,080 at the national average.

Pros

  • +Housing rents price well below the national level, putting a $200k home within reach
  • +Strong K-12 system in eastern metros (KC suburbs, Lawrence)
  • +Clean job market in agriculture, aerospace, and logistics
  • +Median household income $75,514, higher than most cheap states

Cons

  • -Property tax is 1.28%, above the national average
  • -Sales tax up to 8.7% combined; the state grocery tax ended in 2025 but local rates still apply
  • -Tornado Alley exposure
  • -Western Kansas has limited healthcare access

Honest caveats

Cheaper does not always mean better.

Cheap states tend to have lower wages, lower healthcare access scores, and lower-ranked public schools. The Commonwealth Fund's healthcare rankings consistently place Mississippi, Oklahoma, and Alabama in the bottom 10 nationally. US News ranks the same states in the bottom 15 for K-12 education.

For remote workers and retirees, those gaps matter less because you bring your income with you and many medical decisions can be made on your own terms. For local-salary workers raising school-age kids, the maths is harder.

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Tax Burden

What COLI doesn't include.

Best for Retirees

Cost + tax + healthcare.

Frequently Asked

Cheapest states, answered

What is the cheapest state in the US?
Arkansas, at a BEA all-items price parity of 86.9 against a US level of 100 (2024 reference year). Mississippi (87.0) and Iowa (87.8) round out the top three. The median home value in Arkansas is $215,600 (Census ACS 2024 1-year); the lowest of any state is West Virginia's $170,800.
Are wages also lower in the cheapest states?
Yes, almost without exception. Mississippi's median household income is the lowest in the US at $59,127 (Census ACS 2024 1-year, against a US median of $81,604). The exceptions are the Plains states in the cheapest ten: North Dakota ($77,871), South Dakota ($76,881), Kansas ($75,514) and Iowa ($75,501) all sit within about 10 percent of the US median. The metric that matters most is purchasing power: your salary divided by the cost of living index, not the absolute dollar figure.
Which cheap state is best for retirees?
West Virginia, Alabama, and Mississippi all combine low cost of living with no tax on Social Security and friendly retirement income treatment. Tennessee sits just outside this top 10 but is a strong alternative with no income tax at all. Healthcare access is the major caveat in all of these states; rural hospital closures have made some counties medically underserved.
What's the trade-off when moving to a cheaper state?
Lower wages, lower healthcare access scores, and lower education rankings on average. Cheap states tend to have less robust public infrastructure. For remote workers earning a coastal or tech salary, the trade-offs largely disappear because you keep the high salary and gain the low costs. For local-salary workers, run the numbers carefully on the calculator before committing.
What actually makes these states cheap?
Rents, and almost nothing else. On the BEA housing parity the cheapest ten states run from West Virginia at 54.2 against a national 100.6, a gap of more than forty points. The goods parity barely separates states at all: across all fifty it spans only 18.0 points. Land is abundant in these states, demand is moderate, and none has a metro on the scale of Atlanta or Nashville pulling rents up.

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