The 10 Cheapest States to Live in 2026

Where your dollar genuinely goes furthest. Every state on this list scores below 92 on the C2ER cost of living index. Each card below has the full breakdown: housing, healthcare, taxes, median income, and the honest trade-offs.

At a glance

Top 10 ranked side by side

Rank	State	Index	Housing	Median Home	Avg 2BR Rent	Median Income
#1	Mississippi	83.3	56.2	$162,100	$810	$46,511
#2	West Virginia	84.1	56.8	$145,600	$780	$50,884
#3	Kansas	84.8	62.0	$207,600	$940	$64,521
#4	Oklahoma	84.9	60.8	$196,500	$880	$56,956
#5	Arkansas	86.0	62.0	$192,800	$830	$52,528
#6	Missouri	87.1	67.5	$222,300	$950	$61,043
#7	Kentucky	87.5	66.2	$198,500	$870	$55,573
#8	Alabama	87.9	66.8	$216,500	$920	$56,950
#9	Iowa	89.0	69.8	$208,700	$890	$65,573
#10	Indiana	89.4	72.1	$227,800	$970	$61,944

Per-state breakdown

Each state in detail

Rank #1

Mississippi

83.3

overall index

Best for: Lowest absolute cost

Housing56.2very low

Groceries93.1low

Healthcare90.2low

Utilities97.8average

Transport90.5low

Misc.92.8low

Median home

$162,100

Average 2BR rent

$810

Median household income

$46,511

Tax snapshot

Income: 0-5%
Property: 0.63%
Sales: 7.00%

What $80,000 buys here

$80,000 in Mississippi has the same purchasing power as $66,640 at the national average.

Pros

+Cheapest housing in the country at $162,100 median
+No tax on Social Security and a low 0% to 5% income tax band
+Property tax is only 0.63% effective, well below national average
+Long growing season and warm climate

Cons

-Median household income just $46,511, the lowest in the US
-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 #2

West Virginia

84.1

overall index

Best for: Outdoor enthusiasts and retirees

Housing56.8very low

Groceries93.5low

Healthcare93.5low

Utilities103.8average

Transport93.8low

Misc.93.5low

Median home

$145,600

Average 2BR rent

$780

Median household income

$50,884

Tax snapshot

Income: 2.36-5.12%
Property: 0.53%
Sales: 6.00%

What $80,000 buys here

$80,000 in West Virginia has the same purchasing power as $67,280 at the national average.

Pros

+Cheapest median home in the US at $145,600
+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 #3

Kansas

84.8

overall index

Best for: Stable plains living

Housing62.0very low

Groceries93.8low

Healthcare98.2average

Utilities99.5average

Transport93.5low

Misc.93.8low

Median home

$207,600

Average 2BR rent

$940

Median household income

$64,521

Tax snapshot

Income: 3.1-5.7%
Property: 1.28%
Sales: 6.50%

What $80,000 buys here

$80,000 in Kansas has the same purchasing power as $67,840 at the national average.

Pros

+Housing index of 62 puts a $200k home well within reach
+Strong K-12 system in eastern metros (KC suburbs, Lawrence)
+Clean job market in agriculture, aerospace, and logistics
+Median income $64,521, higher than most cheap states

Cons

-Property tax is 1.28%, above the national average
-Sales tax up to 8.7% combined; groceries are taxed
-Tornado Alley exposure
-Western Kansas has limited healthcare access

Rank #4

Oklahoma

84.9

overall index

Best for: Energy industry workers

Housing60.8very low

Groceries94.5low

Healthcare92.5low

Utilities100.2average

Transport94.2low

Misc.93.5low

Median home

$196,500

Average 2BR rent

$880

Median household income

$56,956

Tax snapshot

Income: 0.25-4.75%
Property: 0.85%
Sales: 4.50%

What $80,000 buys here

$80,000 in Oklahoma has the same purchasing power as $67,920 at the national average.

Pros

+Median home price under $200,000
+Income tax ranges only 0.25% to 4.75%
+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

Arkansas

86.0

overall index

Best for: NWA tech and corporate workers

Housing62.0very low

Groceries92.3low

Healthcare90.9low

Utilities99.8average

Transport93.0low

Misc.93.9low

Median home

$192,800

Average 2BR rent

$830

Median household income

$52,528

Tax snapshot

Income: 2-4.4%
Property: 0.57%
Sales: 6.50%

What $80,000 buys here

$80,000 in Arkansas has the same purchasing power as $68,800 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 4.4%
-Healthcare quality outside metros is weak
-Education rankings remain in the bottom 15 nationally

Rank #6

Missouri

87.1

overall index

Best for: Mid-size metro living

Housing67.5very low

Groceries94.8low

Healthcare95.5average

Utilities99.2average

Transport93.8low

Misc.94.5low

Median home

$222,300

Average 2BR rent

$950

Median household income

$61,043

Tax snapshot

Income: 2-4.8%
Property: 0.88%
Sales: 4.23%

What $80,000 buys here

$80,000 in Missouri has the same purchasing power as $69,680 at the national average.

Pros

+Median home $222,300; St. Louis and Kansas City are genuinely affordable
+Strong healthcare networks (Mercy, BJC) in major metros
+Diverse economy: aerospace, agriculture, healthcare, finance
+Median income $61,043

Cons

-Property tax 0.88% with high personal property tax on vehicles
-Local sales taxes can push combined rate near 10%
-Crime rates in St. Louis and Kansas City run above national average
-Tornado and severe weather exposure

Rank #7

Kentucky

87.5

overall index

Housing66.2very low

Groceries93.5low

Healthcare93.3low

Utilities102.5average

Transport94.8low

Misc.95.1average

Median home

$198,500

Average 2BR rent

$870

Median household income

$55,573

Tax snapshot

Income: 4%
Property: 0.80%
Sales: 6.00%

What $80,000 buys here

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

Pros

Cons

Rank #8

Alabama

87.9

overall index

Best for: Southern lifestyle on a budget

Housing66.8very low

Groceries96.4average

Healthcare91.0low

Utilities103.7average

Transport92.7low

Misc.93.2low

Median home

$216,500

Average 2BR rent

$920

Median household income

$56,950

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 $70,320 at the national average.

Pros

+Lowest property tax in the country at 0.39% effective
+Median home price $216,500
+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 fully taxed
-Healthcare access is uneven outside metros
-Education rankings are consistently below average

Rank #9

Iowa

89.0

overall index

Best for: Families and education

Housing69.8very low

Groceries95.8average

Healthcare99.5average

Utilities97.5average

Transport96.2average

Misc.96.4average

Median home

$208,700

Average 2BR rent

$890

Median household income

$65,573

Tax snapshot

Income: 4.4-5.7%
Property: 1.43%
Sales: 6.00%

What $80,000 buys here

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

Pros

+Top-quartile K-12 education statewide
+Low uninsured rate (4.8%) and strong rural healthcare
+Median home $208,700 with low housing index of 70
+Stable, diverse Midwest economy

Cons

-Property tax 1.43%, above national average
-Income tax up to 5.7%
-Severe winters increase utility costs
-Population is older and growing slowly

Rank #10

Indiana

89.4

overall index

Best for: Manufacturing and logistics careers

Housing72.1very low

Groceries95.5average

Healthcare96.3average

Utilities98.2average

Transport97.5average

Misc.94.8low

Median home

$227,800

Average 2BR rent

$970

Median household income

$61,944

Tax snapshot

Income: 3.05%
Property: 0.79%
Sales: 7.00%

What $80,000 buys here

$80,000 in Indiana has the same purchasing power as $71,520 at the national average.

Pros

+Indianapolis is a strong, affordable mid-size metro
+Income tax flat 3.05%
+Median home $227,800
+Major logistics, manufacturing, and life-sciences employers

Cons

-Property tax 0.79% with caps but variable by county
-Sales tax 7%, no exemptions for groceries in some cases
-Air quality in industrial corridors is below average
-Public transit is limited outside Indianapolis

Family of four, monthly

What a family spends each month

Illustrative monthly budget for a family of four. The cheap column reflects costs in Mississippi-tier states; expensive uses California-tier figures.

Category	Cheap state (avg)	National average	Expensive state (avg)
Housing (mortgage / rent)	$1,100	$1,900	$3,400
Groceries	$850	$950	$1,280
Utilities	$280	$320	$480
Transportation	$720	$800	$920
Healthcare premiums	$380	$460	$540
Misc. / discretionary	$720	$850	$1,100
Total monthly	$4,050	$5,280	$7,720

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.

Read our full moving decision guide →

Most Expensive States

The other end of the spectrum.

Compare Two States

Run your own numbers.

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?

Mississippi at index 83.3, with the lowest housing costs in the country (median home $162,100). Kansas (84.1) and Oklahoma (84.8) round out the top three.

Are wages also lower in the cheapest states?

Yes, almost without exception. Mississippi's median household income is the lowest in the US at $46,511. The exception is Iowa and Kansas, which have wages closer to the national median while still ranking in the top 10 cheapest. 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 narrowly missed 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.

Why is Mississippi so much cheaper than the rest?

Housing. Mississippi's housing sub-index is 56.2, the lowest in the country, more than 40 points below the national average. Land is abundant, demand is moderate, and there is no metro the size of Atlanta or Nashville pulling prices up. Combined with a low cost of services and below-average tax burden, the gap compounds.