As inflation continues to impact everyday expenses, many Americans are searching for affordable places to call home. Factors like housing, groceries, healthcare, and transportation costs significantly determine the overall cost of living. Based on data from government reports and authoritative financial sources, we’ve compiled a list of the 10 U.S. states with the lowest cost of living in 2025.
1. Mississippi – The Most Affordable State
Cost of Living Index: 83.3
Annual Living Cost: ~$32,336
Mississippi is the most budget-friendly state in the U.S., with housing costs well below the national average. The median home price is significantly lower than in many states, and everyday expenses such as groceries and utilities are also among the cheapest in the country. (Mississippi State Government)
2. Arkansas – Low Home Prices & Everyday Costs
Cost of Living Index: ~86.6
Median Home Price: ~$299,000
Arkansas offers an excellent quality of life at an affordable price. Residents pay about $86.60 for goods and services that would cost $100 elsewhere in the U.S. The state’s affordable housing market makes it attractive for both families and retirees. (Arkansas Economic Development Commission)
3. Alabama – Southern Charm on a Budget
Cost of Living Index: ~87.8
Median Home Price: ~$330,000
Alabama combines affordability with warm weather and a lower tax burden. From rent to groceries, Alabama residents spend far less than those in most other states. (Alabama Department of Revenue)
4. Oklahoma – Affordable Housing & Transportation
Cost of Living Index: ~88.8
Median Home Price: ~$299,000
Oklahoma is a top contender for affordability, particularly in housing and transportation. The state also offers low gas prices, making commuting and daily travel costs manageable. (Oklahoma Commerce)
5. Iowa – Low Housing Costs & Healthcare Expenses
Cost of Living Index: ~88.4
Median Home Price: ~$299,800
Iowa is known for its low-cost housing and excellent healthcare system, making it a great choice for retirees and families. The cost of groceries and utilities is also well below the national average. (Iowa Department of Economic Development)
6. West Virginia – The Lowest Median Home Prices
Cost of Living Index: ~89.2
Median Home Price: ~$240,000
West Virginia boasts the most affordable housing market in the country, with home prices averaging around $240,000. It also has some of the lowest utility costs in the U.S. (West Virginia Chamber of Commerce)
7. Kentucky – Budget-Friendly Living & Taxes
Cost of Living Index: ~89.4
Median Home Price: ~$305,000
Kentucky provides an affordable cost of living with lower-than-average property taxes. Residents enjoy reasonably priced food and healthcare services. (Kentucky Department of Revenue)
8. Missouri – Low Utility & Healthcare Costs
Cost of Living Index: ~89.7
Median Home Price: ~$270,000
Missouri is known for its affordable utilities and healthcare expenses. The state also has a strong job market, making it ideal for professionals looking for an affordable place to live. (Missouri Department of Economic Development)
9. Nebraska – Low Cost of Goods & Services
Cost of Living Index: ~89.8
Median Home Price: ~$349,950
Nebraska’s residents enjoy lower-than-average grocery, transportation, and healthcare costs. Its economy is stable, and housing remains relatively affordable. (Nebraska Economic Development)
10. Kansas – An Affordable Midwest Haven
Cost of Living Index: ~90.0
Median Home Price: ~$295,475
Kansas rounds out the top ten, offering low costs for healthcare, housing, and food. The state also has one of the lowest unemployment rates in the country. (Kansas Department of Commerce)
Conclusion: Which State is Right for You?
Choosing a state with a lower cost of living can help you maximize your savings while maintaining a comfortable lifestyle. Whether you prioritize low housing costs, cheap utilities, or affordable groceries, these 10 states provide excellent options for budget-conscious living.
Before making a move, consider factors such as job opportunities, local taxes, and healthcare access. To compare the cost of living in different states, visit U.S. Bureau of Economic Analysis and Missouri Economic Research and Information Center for official data.
For more information on relocating, check out the official U.S. Census Bureau data on housing and income trends across states.
Would you move to one of these affordable states? Let us know your thoughts!
This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.
A senior at Yale-NUS College with interests in developmental and labour economics, as well as creative non-fiction and poetry. Currently, I’m studying as an Economics major and an Arts and Humanities minor (focusing on Creative Writing) with heavy involvement in the Singaporean journalism scene and involved in research on economic history and educational policy. I’m working as an author for SKC News, Yale-NUS’ student publication, as a writer for Wingspan, Yale-NUS’ alumni magazine, and as a tutor for the NUS Libraries Writer’s Centre. | Linkedin