25 most affordable states to reside in
For the past thirty years, the escalating expenses of living have been a burden for many Americans. The situation intensified further following the COVID-19 pandemic. Exceptional inflation rates in 2022, combined with stagnant or declining wages during that time, have encumbered individuals in the U.S. Pew Research indicates that the size of the middle class diminished by 10 percentage points from 1971 to 2023, while the percentage of lower-income households increased from 27% to 30%.
The unaffordable housing sector, alongside surging childcare costs, has left many young families feeling as though they cannot achieve their aspirations, as reported by CNN. In a similar vein, a 2024 Pew Research survey revealed that 41% of participants believed the American dream was once attainable, but is no longer the case.
A significant element affecting your earning and spending capabilities, and the feasibility of the American dream, often hinges on your location. To pinpoint the most budget-friendly states, Stacker utilized information from the Council for Community and Economic Research (C2ER) to establish the 25 states with the least expensive cost of living as of the second quarter of 2024. The living cost index for each state was ascertained taking into account the prices of 60 goods and services from a voluntary survey. The figures were rounded to the nearest tenth of a percent.
Every index is a percentage relative to the U.S. average. For instance, a state with an index of 90 implies a cost of living that is 10% lower than the national average.
Continue reading to verify if your state ranks among the most affordable in the country.
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#25. Pennsylvania
– Average cost of living index: 95
— Groceries: 99.7
— Health care: 88.8
— Housing: 83.2
— Transportation: 102.5
— Utilities: 105.4
— Other: 98.6
Pennsylvania secured a position on this list due to its fifth-lowest healthcare costs in the entire U.S., as per C2ER. Although transportation and utility expenses can be relatively high, other costs—like getting a haircut, enjoying a movie, or participating in a yoga class—are reasonable, according to the C2ER report.
#24. Illinois
– Average cost of living index: 94.8
— Groceries: 98.3
— Health care: 99.4
— Housing: 83
— Transportation: 104.7
— Utilities: 101.1
— Other: 97.7
Over 20% of Illinois residents reside in Chicago, the third-largest city in the U.S. However, the elevated living costs in the Windy City do not prevent Illinois from being considered relatively affordable. The cost of homes, at nearly 18% lower than the national average, is a significant advantage.
Nonetheless, an evaluation conducted by the Illinois Policy Institute of Census Bureau data indicates that the state has a higher proportion of housing-burdened residents (those for whom housing costs exceed 30% of their income) than any other of the twelve Midwestern states. More than 33% of households in Illinois experience housing burden, with almost 16% being severely burdened (i.e., spending more than 50% of their income on housing).
#23. Montana
– Average cost of living index: 94.7
— Groceries: 103.1
— Health care: 108.4
— Housing: 85.5
— Transportation: 110.7
— Utilities: 83.9
— Other: 94.4
Big Sky Country is renowned for renewable energy, contributing to its recognition as one of the 25 most budget-friendly states. Montana boasts the eighth-highest percentage of electricity produced from renewable sources (51%) nationwide, according to Yale Climate Connections.
The state also features the third-lowest natural gas prices in the U.S., according to the Energy Information Administration, which results in its utilities’ costs being 16% lower than the national average.
#22. Ohio
– Average cost of living index: 94
— Groceries: 99.1
— Health care: 93.5
— Housing: 84.9
— Transportation: 94
— Utilities: 101.4
— Other: 97.4
Ohio residents can attribute their low living costs to affordable housing—15% below the national average. However, while the median mortgage in the state is close to 25% less than the U.S. average, rental prices haven’t followed the same trend.
A 2024 report from the National Low Income Housing Coalition and the Coalition on Homelessness and Housing in Ohio indicated that full-time employees need to earn at least $20.81 every hour to afford rent for a two-bedroom apartment, with only two of the state’s most common professions meeting that wage.
#21. Nebraska
– Average cost of living index: 93.6
— Groceries: 99.7
— Health care: 101.7
— Housing: 79.7
— Transportation: 97.2
— Utilities: 88.5
— Other: 106.1
Nebraska is unique as it generates electricity exclusively from publicly owned power systems. Consequently, energy prices are significantly lower than those in other states across the country. Located in Nebraska are numerous affordable housing initiatives, contributing to its relatively low cost of living.
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#20. Wisconsin
– Average cost of living index: 93.3
— Groceries: 96.6
— Health care: 106.8
— Housing: 82.3
— Transportation: 97.4
— Utilities: 87.8
— Other: 99.1
Situated near the Great Lakes, Wisconsin has grown increasingly favored by individuals seeking cooler climates. Madison, the state capital, is referred to as a “climate haven,” and median home prices of just under $300,000 attract a multitude of potential buyers. Utility expenses are also quite low—based on July 2024 data from Forbes, the average monthly utility costs are below $400, with Wisconsin tying with Vermont for the lowest average water bill at only $18.
#18. New Mexico (tie)
– Average cost of living index: 93.1
— Groceries: 96.1
— Health care: 102.2
— Housing: 87.5
— Transportation: 88.9
— Utilities: 84.4
— Other: 99
Residents of New Mexico generally enjoy low utility expenses, ranking #11 in the nation. The state is a principal producer of oil and natural gas, as well as a leader in wind energy, contributing 38% of its electricity from renewable sources in 2023, according to the EIA. Moreover, it ranks first for property taxes, based on the Tax Foundation analysis.
#18. Kentucky (tie)
– Average cost of living index: 93.1
— Groceries: 100.1
— Health care: 108.3
— Housing: 79.6
— Transportation: 95.7
— Utilities: 79.7
— Other: 102
According to AAA’s national gas prices index, inhabitants of Kentucky enjoy lower gas costs. They also benefit from the third-lowest electricity prices east of the Mississippi, as reported by the EIA. Housing costs are about 20% less than the national average, though Louisville is experiencing a potential housing crisis that both lawmakers and residents have been striving to address for years.
#17. Wyoming
– Average cost of living index: 92.8
— Groceries: 98.8
— Health care: 107.4
— Housing: 81
— Transportation: 90.8
— Utilities: 90.9
— Other: 99.3
Wyoming does not impose personal or corporate income taxes, rendering it one of the most business-friendly states in the nation, alongside South Dakota, as noted by the Tax Foundation. The Cowboy State is also rich in coal production, resulting in utility expenses that are 9% less than the national average.
#16. Texas
– Average cost of living index: 91.7
— Groceries: 96
— Health care: 93.4
— Housing: 80.1
— Transportation: 93.3
— Utilities: 103.5
— Other: 95.8
Texas lacks an income tax, and housing is remarkably affordable for such a densely populated state (only California has more inhabitants). The median home price and mortgage payment in the Lone Star State are $238,000 and $1,913, respectively, according to the Census Bureau. Transportation expenses rank #13 in the U.S., attributed to Texas’ status as a major oil and gas producer.
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#15. Louisiana
– Average cost of living index: 91.6
— Groceries: 95.4
— Health care: 94.6
— Housing: 83.4
— Transportation: 94.6
— Utilities: 78.3
— Other: 98.9
Notably, Louisiana ranks first in affordability concerning utilities and groceries—the state ranks #1 for utilities and #6 for groceries, based on C2ER data. The Bayou State has the second-highest capacity for oil refining in the nation and is also the third-largest natural gas producer in the United States, according to the EIA.
Housing costs are nearly 17% below the national average, yet living in New Orleans is 23% more expensive than the state average.
#14. North Dakota
– Average cost of living index: 91.3
— Groceries: 94.7
— Health care: 110.2
— Housing: 78.4
— Transportation: 100.9
— Utilities: 79.5
— Other: 98.2
North Dakota offers a wealth of employment opportunities, holding the second-lowest unemployment rate in the nation, accompanied by low income tax rates, which makes it an appealing place to live in the Midwest.
It is also the third-most affordable state for groceries nationally, with Grand Forks recognized as the most budget-friendly city for groceries in the United States, according to C2ER. Housing remains reasonably priced, and the state has one of the lowest percentages of housing-burdened families in the Midwest.
#13. South Dakota
– Average cost of living index: 91.2
— Groceries: 95.8
— Health care: 102.8
— Housing: 86.2
— Transportation: 94.3
— Utilities: 83.5
— Other: 92.8
South Dakota excels in both affordable utilities and other expenses, which include essential items like major appliance repairs and personal hygiene products. The state does not impose an individual or corporate income tax, and natural gas and electricity prices are significantly lower than the national average, based on EIA reports.
#11. Michigan (tie)
– Average cost of living index: 90.9
— Groceries: 98.3
— Health care: 89.9
— Housing: 72.5
— Transportation: 101.2
— Utilities: 99.4
— Other: 97.8
Housing costs are quite low in Michigan, with two of its cities—Detroit and Grand Rapids—ranking among the 20 least expensive housing markets worldwide according to a 2024 International Housing Affordability report from the Center for Demographics and Policy at Chapman University in California. Healthcare expenditures are also more reasonable than in all but five states in the U.S.
#11. Georgia (tie)
– Average cost of living index: 90.9
— Groceries: 96.6
— Health care: 100.6
— Housing: 78.5
— Transportation: 95.4
— Utilities: 97.6
— Other: 94.4
Affordability in Georgia primarily stems from its reasonable housing and miscellaneous expenses. Recently, the median home value stood at $245,900, with homeowners paying an average of $1,640 per month, while renters spent an average of $1,221, according to Census Department data. Various localities within Georgia consistently feature among the most affordable in the nation.
For instance, Augusta ranked #8 in Zillow’s list of the most affordable places to buy a home in 2024, and received the same accolade on Kiplinger’s list of the cheapest cities to reside in 2024.
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#10. Tennessee
– Average cost of living index: 90.8
— Groceries: 96.6
— Health care: 90.7
— Housing: 83.7
— Transportation: 90.5
— Utilities: 87.8
— Other: 95.3
Tennessee holds position #7 for healthcare and #5 for transportation costs nationwide. Additionally, the Volunteer State benefits from the fourth-lowest natural gas prices in the U.S. according to EIA statistics, and ranks 12th in electricity expenses. Tennessee has an absence of personal income tax and an effective property tax rate of 0.48%, as per the Tax Foundation. Moreover, the state has a low unemployment rate hovering around 3%.
#9. Indiana
– Average cost of living index: 90.3
— Groceries: 97.4
— Health care: 97.2
— Housing: 76.2
— Transportation: 99.7
— Utilities: 89.1
— Other: 95.4
Indiana features one of the ten most affordable housing markets in the nation. As per Census Bureau data, over 70% of occupied residences were owned from 2018 to 2022. The median home value stood at $183,600, with a mortgage payment averaging $1,301, while renters paid about $967 on average each month.
The Hoosier State also boasts one of the lowest individual income tax rates nationally, sitting at 3.05% as of 2024. A new regulation effective January 1, 2024, will further decrease that rate annually: 3% in 2025, 2.95% in 2026, tapering to 2.9% by 2027.
#8. Iowa
– Average cost of living index: 89.1
— Groceries: 96
— Health care: 97.2
— Housing: 74.8
— Transportation: 96.8
— Utilities: 91.3
— Other: 94
Iowa’s housing sector ranks as the eighth most affordable across the U.S., with a median home value of $181,600 and a home ownership rate of 71.5%, as noted by the Census Bureau. The state offers numerous job prospects in advanced manufacturing, bioscience, finance, and insurance. Additionally, its unemployment rate of 2.8% stands as the seventh-lowest in the nation, according to the Bureau of Labor Statistics.
#7. Missouri
– Average cost of living index: 88.6
— Groceries: 95.5
— Health care: 92.6
— Housing: 77
— Transportation: 89.3
— Utilities: 99.8
— Other: 91.4
Missouri presents wide-ranging career options, and housing costs are 23% below the national average. The state features the third-lowest transportation expenses in the U.S., ranks fourth in miscellaneous costs, and comes in seventh for grocery prices, as per the C2ER report.
Smaller cities such as Springfield and Joplin tend to be particularly economical compared to larger locations like St. Louis and Kansas City. However, both of these latter metros are ranked among the twenty most affordable housing markets worldwide in the 2024 Chapman University report.
#6. Arkansas
– Average cost of living index: 88.5
— Groceries: 94.6
— Health care: 87.8
— Housing: 74.4
— Transportation: 90.6
— Utilities: 91.8
— Other: 96.3
Ranking #7 in the country for housing affordability, Arkansas also claims the second and third positions for grocery and healthcare costs, respectively. Transportation expenses are also significantly below the national average, ranking #6. The state’s job market further enhances its appeal: The unemployment rate stands at 3.3%, with many large companies, including Walmart and Tyson Foods, employing its residents.
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#5. Mississippi
– Average cost of living index: 87.7
— Groceries: 95.4
— Health care: 98.6
— Housing: 74.3
— Transportation: 90.1
— Utilities: 87
— Other: 93.5
Mississippi is recognized as one of the most economical states in the country. The state scores highly for its housing, transportation, and grocery prices, and boasts a 2.8% unemployment rate, one of the lowest in the U.S., as reported by the Bureau of Labor Statistics. However, relatively high healthcare costs highlight some concerning figures, including a 19.1% poverty rate, according to the Census Bureau.
#4. Alabama
– Average cost of living index: 87.6
— Groceries: 96.5
— Health care: 86.3
— Housing: 68.5
— Transportation: 91.4
— Utilities: 99.4
— Other: 95.6
Alabama ranks first in the nation for affordable healthcare, as indicated by C2ER data. Housing is also budget-friendly, with the median home price at $179,400, based on Census Bureau statistics. The state also boasts some of the lowest gasoline prices in the U.S., per AAA reports, though the cost of utilities (primarily due to large fluctuations in weather) likely prevented it from ranking higher.
#3. Kansas
– Average cost of living index: 87
— Groceries: 94.9
— Health care: 99
— Housing: 73.9
— Transportation: 88.3
— Utilities: 98.6
— Other: 89.4
Aside from healthcare and utility expenses, Kansas ranks no lower than #5 across all other categories. In transportation costs, it ranks #1, followed by #2 for miscellaneous expenses behind West Virginia. The Sunflower State is also home to Pittsburg, which is listed as the fourth-most affordable urban area nationwide, according to C2ER.
#2. Oklahoma
– Average cost of living index: 85.3
— Groceries: 94.6
— Health care: 94
— Housing: 68.6
— Transportation: 91.8
— Utilities: 93.4
— Other: 89.9
Oklahoma’s housing, grocery, and miscellaneous expenses earned it the #2 position on this list. The state is recognized as one of the nation’s leading producers of natural gas and crude oil, obtaining 42% of its energy from renewable wind that is reported by the EIA. Ponca City and Oklahoma City are both featured on C2ER’s list of the top 10 least expensive urban locations for the first quarter of 2024.
#1. West Virginia
– Average cost of living index: 84.3
— Groceries: 98.9
— Health care: 101.3
— Housing: 60.2
— Transportation: 93.6
— Utilities: 98.5
— Other: 89.0
West Virginia features the lowest housing costs in the United States, attributed to its 74.2% home ownership rate, an average mortgage of $1,180, and a median rent of $831, based on Census Bureau figures. While grocery prices and healthcare spending are relatively high, the state’s overall ranking as #1 in all other miscellaneous expenses propelled it to the top.
Additional writings and article editing by Mike Taylor. Copy editing by Meg Shields. Photo curation by Ania Antecka.
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