Where are the cheapest states to buy a house in the US in 2023? We looked at states with low average home prices and low cost of living to make this list
Gone are the days when young Americans are flocking exclusively to New York and Los Angeles. Affordable home options abound across the US—it may just be a matter of how far you want to move, as well as what services you are looking for.
Housing markets around the world are notorious for their fluctuations—and the US is no different. However, the current trend in the US is to head to mid-level markets in the South and the Midwest.
In this article, we will explore everything you need to know about the cheapest states to buy a house in the US. For mortgage professionals living in any of these states, this is excellent data to share with prospective buyers both in and out of state who are looking to buy in your affordable state!
What state is the cheapest state to buy a house?
The cheapest state to buy a house in the US is West Virgina, with an average home there costing $129,103. That number is almost $30,000 less than average home price in the next cheapest state, Mississippi ($157,828), and less than half the US national average of $344,141, according to the Zillow Home Value Index.
Location is one of the most significant factors in determining property prices—and prices can differ widely between states. In fact, there are nine US states with an average property value under $200,000 and eight with average property values over $500,000. According to the World Population Review, most of the states with a lower cost of living can be found in the South.
Here is a list of the 10 cheapest states to buy a house, along with the average home price of each:
What state is the best place to buy a house?
Home values are not necessarily the only determining factor when deciding on the best state to buy a home. Other factors such as crime (and other issues and perks) can add extra appeal to certain states, especially for young families.
Considering home values, and other factors, here are five of the best US states to buy a house:
- Iowa
- Indiana
- Tennessee
- South Dakota
- North Carolina
Let’s take a closer look to see what each has to offer prospective home buyers:
1. Iowa
With an average home value of $183,418, Iowa is within the top five cheapest states to live in the US. The overall cost of living in the state hovers around 90% of the US average, with housing at roughly 75% of the national average. Aside from the financial benefits, Iowa is also one of the safest states in the US.
2. Indiana
While not in the top 10, Indiana’s average home value ($210,166) is still among the lowest in the US, making it an attractive place to put down roots. And there are other financial perks: Indiana’s flat state income tax sits at just 3.23% and the average commute for workers state-wide is under 24 minutes. Indiana also provides fair to medium sized cities that have relatively low crime.
3. Tennessee
The average home price in Tennessee is relatively inexpensive at $276,963. With no state income tax, housing costs that tend to be significantly lower than the US average, and mild weather all year, Tennessee has become an attractive option for would-be home buyers. In 2021, the Volunteer State was ranked the sixth-most affordable state. In 2021, Tennessee was found to be the fifth-best US state for doing business and the next year it was sixth.
4. South Dakota
The average home value in South Dakota is $277,809. While it did not make the cut this last year, South Dakota consistently ranks in the top 10 cheapest US states. It is also one of eight US states that does not have personal property tax. For these reasons, its natural beauty, and more, South Dakota is one of the fastest-growing states in the US.
5. North Carolina
North Carolina is the most expensive state on this list, with an average home value of $296,021. However, this state has become a magnet for millennials. The climate is appealing year-round, the coastal stretches and the mountains, and the growing job market are perhaps some of the reasons for the migration. Not only is the cost of living generally affordable, but higher education is also among the best in the country, with Chapel Hill and the University of North Carolina.
It can be a very tricky road to navigate buying a house anywhere, even in the cheapest states to buy a house. We advise you to speak to the best mortgage professional in your area for assistance. They can help you see the bigger picture.
What 5 states have the lowest cost of living?
The cost of living is the amount of money required to pay for your living expenses in a certain area. Typical cost of living expenses include housing and utilities, healthcare, groceries, and transportation. If you add these expenses up into the cost-of-living index, you can compare the cost of living in different states.
The 5 states with the lowest cost of living are:
- Mississippi
- Kansas
- Alabama
- Oklahoma
- Georgia
Here is a closer look at each:
1. Mississippi
Mississippi’s cost of living index score is 83.3. (For comparison, the highest cost of living index score is in Hawaii, which has a score of 193.3.) It also has one of the lowest average housing costs in the US and the lowest average transportation costs.
On the downside, Mississippi suffers the highest poverty rate in the US, with a poor healthcare system and quality of education. With fewer job opportunities on the horizon, Mississippi has economic concerns for the future.
2. Kansas
Kansas is No. 2 on this list with a cost-of-living index score of 86.5. Economically, Kansas boasts one of the lowest unemployment rates in the US as well as housing costs 27.4% under the national average. One of the main cons for Kansas is that it endures frequent tornadoes and extreme droughts.
3. Alabama
With a cost-of-living index score of 87.9, Alabama comes in third on our list. Alabama has one of the lowest median home values in the country, as well as some of the lowest healthcare and transportation costs. While the unemployment rate is still somewhat low at 2.9%, Alabama still has the highest percentage of people living below the poverty line in the US.
4. Oklahoma
Oklahoma is tied with Alabama with a score of 87.9, but has one of the cheapest costs in housing, groceries, and healthcare. At 15.1%, Oklahoma has one of the highest poverty rates in the US and is usually ranked with Mississippi in education and healthcare. Despite struggling healthcare and education systems, Oklahoma’s housing costs are 25.3% below the national average and the healthcare and grocery costs are 5.5% below the national average.
5. Georgia
Georgia’s cost-of-living index score is 88.8, offering lower-than-average housing costs and relatively inexpensive transportation and utility costs. Housing costs in Georgia are 25.6% below the US average and utility costs are 9.5% below the national average, not to mention close proximity to urban centers and Southern business hubs Atlanta and Savannah.
What is the easiest state to buy a house in?
The easiest state to buy a house in is Iowa. Not only is housing affordable, but there are job opportunities for young home buyers as well. Iowa has one of the top five most affordable average home prices in the US ($183,418) and is the best place in the US to purchase a property. With a low crime rate and great prices, buying a home in Iowa is a choice more and more people are making.
Plus, what kind of person wouldn’t love waking up in a state with a sunrise like this most mornings?
What state has the cheapest property taxes?
Hawaii has the lowest property tax in the US at 0.28%. The typical home price, however, is $1,038,544—the highest in the country and almost three times the average home price. The state with the next cheapest property tax is Alabama, at 0.41%. But the typical home price is not so astronomical—about $205,000.
Where is the cheapest place to buy a house in the USA?
The cheapest place to buy a house in the USA is Youngstown, Ohio. The median listing price is $115,000 and the median down payment is $23,000. The median income in the community is $30,129. Situated near the halfway point between Cleveland and Pittsburgh, Youngstown offers easy access to both small-town life in the Cuyahoga Valley National Park and the bright lights of the big city.
As we have seen, there are many options for cheap places to buy a house in the US. If you need help determining what sort of down payment you need to make in these US markets, use our free mortgage calculator to get an estimate.
Do you have experience looking for the cheapest states to buy a house? Let us know in the comment section below.
