The Cheapest States to Live in 2023
If you’ve ever wondered what the cheapest state to live in is, you’ve come to the right place!
When it comes to determining which states have the lowest cost of living, there are a lot of different sources saying a lot of different things, especially since the cheapest city to live in the USA is not actually located in the cheapest state. And, I came across sources that differed when it came to median home prices and rent prices. But, I’ll get more into that later.
Basically, the list of cheapest places to live in the USA in 2023 varies by source, which is super confusing. So, I’ve decided to dig in and break it all down for you in one place!
Each year, the Council for Community and Economic Research analyzes the Cost of Living Index for every state in the U.S. to see which areas are the least expensive. In order to determine what the cheapest state to live in is, they analyze several different costs in 255 metropolitan areas, including the prices of:
They then determine what they call a Composite Index Score, which is a percentage they compare to the United States’ benchmark of 100%. When a city’s Composite Index Score falls below 100, that means that the cost of living is below the national average. And, when a city’s Composite Index Score is above 100, then the cost of living is higher than the national average. Make sense?
While Michiagn snagged the top spot in terms of the city that is the cheapest to live in, it’s not even on the top 10 list of cheapest states to live in. So, what is the cheapest state to live in, if it’s not Michigan? That honor actually goes to Mississippi, at least according to several sources I’ve come across.
Financer came up with a top 5 cheapest states to live in list based on several different important factors, including: the Cost of Living Index scores of a state’s cities that made the Council for Community and Economic Research’s list, a state’s sales and income taxes, the average cost of living in a state as calculated by MIT, and the average cost of food, shelter, clothing, utilities, transport, healthcare, and public education in that state.
According to Financer, the 5 cheapest states to live in are:
The Travel’s top 5 cheapest states to live in list is slightly different from Financer’s list. While both sources agree on the top 2 states, their rankings for 3-5 are very different. Their list includes:
Missouri Economic Research Information Center (MERIC) also ranked every state in the U.S. according to their Cost of Living Index and data from the Council for Community & Economic Research.
According to MERIC, the top 10 states with the lowest cost of living and their respective Composite Index Scores are:
While the cheapest city to live in the U.S. is Kalamazoo, Michigan, and the cheapest state to live in is Mississippi, the top five states with the lowest home prices don’t have either state on the list. According to Rocket Homes, the cheapest state to buy a house is actually Indiana. Rocket Homes based their findings on the average monthly mortgage U.S. homeowners pay ($1,609), the median household income ($65,712), and the median home value ($240,500).
The top 10 states Rocket Homes lists as the cheapest to buy your own place in 2023 are:
But, here’s where things get confusing again. The median home values Rocket Homes provides for the states on their list are very different from the values listed on World Population Review. For example, Rocket Homes states that the median home value for Indiana is $156,000, whereas World Population Review says it’s $141,700. So, for consistency purposes, I’m going to go with the values from World Population Review.
When it comes to finding a cheap place to live, whether you are buying a home or renting one plays a big role in determining affordability. According to Earnest, the average price of rent in the United States is about $1,249 a month. And, the least expensive state for renting is actually West Virginia, which on average costs about $725 a month according to World Population Review. But, one of the the most affordable places to rent in is actually Toledo, Ohio, because it has an average rent price of $550.
Also, I want to point out that the average median rent prices listed on Earnest are very different from World Population Review. However, World Population Review doesn’t have stats on median rents in U.S. cities. They just cover states as a whole. So, the list above is based on Earnest’s findings. But when it comes to stats for the entire state, I will once again be using the figures from World Population Review.
Top 5 Most Affordable States for Renters Based on Median Rent According to World Population Review
While these lists all vary, which is very confusing, I know, Mississippi has consistently been named the cheapest place to live in the USA in 2023. So, let’s explore why Mississippi keeps snagging the number one spot as well as some of the other states that have made the different lists.
When you google “cheapest states to live in,” Mississippi consistently pops up. And, with good reason. The average home price is the most affordable in the country as are child care services. And, anyone with little kiddos knows that child care eats up a huge part of one’s monthly budget percentages. Another cool thing about Mississippi is that it has over 50 colleges and universities as well as offers some of the lowest tuition costs in the country.
One downside of Mississippis is that the median household income is pretty low. It’s actually the lowest in the country. So, one thing to keep in mind about moving to Mississippi is that because it is the lowest in the country in terms of salaries, while housing may be cheap, whether or not your dollar will go further here really depends on your income. And, the unemployment rate in Mississippi is higher than the national average, which is currently 5.4%.
One awesome thing about Kansas is that affordable housing costs are pretty low. They fall a whopping 30% below the national average. Plus, one city in Kansas is actually paying people to move there. Yes, you read that right! You can get paid up to $15,000 to move to Kansas’s capitol Topeka. Kansas also has some great colleges, including the University of Kansas, which has an amazing basketball team. Rock Chalk, Jayhawk! And, if you’re a BBQ lover, Kansas is definitely the place to be!
If you’re looking to buy a home, Oklahoma has some of the cheapest house prices around. In fact, the median home price in Oklahoma is nearly half of the median for the U.S. And, it’s actually ranked as having the 4th lowest cost of housing in the country.
The unemployment rate in Oklahoma is also pretty low, which is great for job seekers.
Delicious southern food and the gorgeous Gulf Shores are just two of the many great things about living in Alabama. Housing costs are really low, and the unemployment rate is only 3.3%. And, if you like college football, you can’t go wrong with moving to Alabama. Roll Tide!
Tennessee has a lot going for it. The cost of living is pretty low as are property taxes. Housing costs are actually 20.6% lower than the national average. Tennessee is also one of the nine states that do not have state income taxes. Alaska, New Hampshire, Nevada, Florida, Texas, Washington, South Dakota, and Wyoming are the other eight.
Plus, Tennessee residents also get access to free college. Yes, you read that right. FREE college! The Tennessee Promise is both a scholarship and mentoring program. It provides Tennessee high school graduates with the opportunity to go to a community or technical college free of tuition and any other mandatory fees. In my opinion, that’s a total win-win!
Homes in Arkansas are just a tiny bit more expensive than Mississippi, and median monthly rents are the 2nd lowest in the country. But, Arkansas ranks as the state with the 3rd lowest salaries, so like Mississippi, your income will determine how far your dollar will really stretch. However, Arkansas is known for having low property taxes, which is a major plus. And, if you’re looking to live in a place known for it’s small-town charm, Arkansas is full of quaint little towns for you to plant your roots. And, while Arkansas is not a coastal state, it has 600,000 acres of pristine lakes.
Home prices are pretty decent in Georgia as are average salaries. Property taxes are low as well, which is always a bonus for homeowners. Georgia is also home to two great cities: Atlanta and Savannah. And, if you like nature, Georgia has nearly 50 state parks. Oh, and don’t forget the delicious peaches!
The Crossroads of America not only has a pretty low cost of living, but it is also known for its low gas prices and taxes. Indiana is also home to several great colleges, including Indiana University, Purdue University, and the University of Notre Dame. Housing is quite affordable, and it has a booming economy with lots of job opportunities in the military installations, agriculture, and manufacturing industries.
Housing costs in Missouri are pretty affordable, and average rents are pretty low as well. Missouri’s housing cost index is 21.7% below average. That’s not too shabby. Missouri also has a rich job market and lots of employment opportunities for people in the biotech, retail, service, and business management industries. It is also home to some pretty good sports teams. The Blues, Chiefs, and Royals all have championships under their belts.
Iowa has so much more to offer than corn. Here, you can find charming small Midwestern towns, suburbs, and even big cities, like Des Moines. Plus, Iowa is also a great place to raise a family due to the plethora of great schools in the state. In fact, 317 Iowa schools made the US News and World Report’s list of best high schools. Iowa’s booming economy and low unemployment rate mean that there are lots of jobs available. Iowa is also known for having a low crime rate, and it is listed as a state with low costs to own and operate a vehicle. The cost of groceries is a little on the high side, but incomes in Iowa are also higher, so that might not be an issue depending on one’s salary.
Not only does Texas offer relatively low home prices, but if you fancy yourself more of a city mouse, Texas is home to several great metropolitan areas, including: Austin, Dallas, Houston, San Antonio. The food is just amazing, especially if you like BBQ and Tex-Mex.
And, if you’re not a huge fan of living in big cities, fear not! Texas has tons of rural areas as well. After all, it is the 2nd largest state in the country, so housing is aplenty. Plus, like Tennessee, Texas doesn’t have any state income taxes. How cool is that? And, out of all the states on this list, Texas has the highest median household income. However, unemployment is on the higher side.
West Virginia is interesting because housing is quite cheap, but there are some other things that are on the expensive side there, like transportation costs and groceries. The unemployment rate is slightly lower than the national average of 5.4%, which is always a plus for job seekers. Another positive thing about West Virginia is that it offers stunning scenery. The Appalachian Mountains run through the entire state, and 75% of West Virginia is covered in forests.
While we’ve covered what is the cheapest state to live in, there are some others you should definitely avoid. If you want to find a place to live where your hard-earned money will go further and it’s easier to live within your means, there are also several states you will want to avoid due to their high cost of living. CNBC lists these states as the 10 most expensive states to live in for 2023:
For Q1 of 2023, the Council for Community and Economic Research determined that these cities are the cheapest places to live in the U.S. based on their low Composite Index Scores.
So, in a nutshell, Kalamazoo, Michigan, is the cheapest city to live in the entire United States for 2023 because it has a Composite Index Score of 76.3. To figure out how much below the national average the cost of living in an area is, you just subtract the Composite Index Score from the benchmark of 100%. So, the cost of living in Kalamazoo is 23.7% below the national average.
At the end of the day, if you’re looking for a cheap state to move to, you have lots of options. But, what about your state? Did it make the list as one of the best places to live? Or did it not make the cut? Do you find it expensive or inexpensive as far as overall cost to live there? What are some of the great or not-so-great things in your neck of the woods? I’d love to hear from you!
DETROIT – October 4, 2024 – This week, Michigan Central, Michigan’s Office of Future Mobility Electrification, CEDAM and Wayne State...
The end of the year is closing in on us. Soon, we will be celebrating the holidays with our friends...
Source: The College Investor Google AI overviews are misleading or inaccurate in 43% of finance-related searches, according to our study....
