Least Expensive States to Live in US 2026 | Ranked by Real Data
Oklahoma is the least expensive state to live in on the newest quarterly index, with Alabama, Iowa, West Virginia, Kansas and Mississippi close behind. That is the short answer. The useful answer is a little longer, because the cheapest state depends on which dataset you trust, how much you earn there and whether you plan to rent or buy.
This guide puts the two most respected public rankings side by side, shows why they disagree, and then checks each state against rent, household income and taxes. If you are researching the least expensive states to live in because a move is on your mind, treat the ranking below as a shortlist. The last sections show how to turn it into a decision.
What is the least expensive state to live in right now?
Oklahoma has the lowest overall cost of living in the second quarter 2026 data from the Missouri Economic Research and Information Center (MERIC). Its index is 83.0, which means prices are about 17 percent below the national average of 100. Alabama (86.0), Iowa (86.1), West Virginia (87.0) and Kansas (87.1) complete the top five.
MERIC builds its index from six categories: groceries, housing, utilities, transportation, health care and miscellaneous spending. It averages the results for participating cities and metro areas in each state, and the city data come from a volunteer price survey run by the Council for Community and Economic Research. Here are the ten lowest states with every category shown, so you can see where the savings actually come from.
| Rank | State | Overall | Housing | Groceries | Utilities | Transport | Health care |
| 1 | Oklahoma | 83.0 | 65.1 | 94.1 | 97.6 | 83.9 | 96.7 |
| 2 | Alabama | 86.0 | 68.6 | 95.2 | 94.1 | 90.9 | 85.2 |
| 3 | Iowa | 86.1 | 70.6 | 96.2 | 81.7 | 93.5 | 93.0 |
| 4 | West Virginia | 87.0 | 69.9 | 96.4 | 93.3 | 97.7 | 88.6 |
| 5 | Kansas | 87.1 | 78.7 | 95.3 | 96.0 | 84.4 | 89.4 |
| 6 | Mississippi | 87.4 | 70.8 | 94.2 | 97.4 | 92.3 | 84.8 |
| 7 | Missouri | 88.2 | 77.7 | 95.3 | 94.0 | 85.3 | 95.4 |
| 8 | Arkansas | 89.0 | 76.9 | 94.6 | 98.7 | 91.5 | 85.5 |
| 9 | Indiana | 89.7 | 77.5 | 98.2 | 92.7 | 98.1 | 89.7 |
| 10 | Tennessee | 89.7 | 80.0 | 96.3 | 88.0 | 93.0 | 89.5 |
Source: MERIC Cost of Living Data Series, second quarter 2026. United States = 100 in every column.
Why do the rankings change depending on the source?
Different agencies measure different things, so the order shifts. The U.S. Bureau of Economic Analysis publishes Regional Price Parities, which cover an entire state using 2024 data. In that ranking Arkansas comes first at 86.9, followed by Mississippi (87.0), Iowa (87.8) and Oklahoma (87.8). Louisiana, South Dakota and North Dakota also make the BEA top ten even though MERIC places them 16th, 21st and 14th.
Neither list is wrong. MERIC reflects a recent quarter but depends on which cities choose to submit prices. The BEA data are broader but a year or more older. When a state appears near the top of both, such as Oklahoma, Mississippi, Iowa and Alabama, you can be fairly confident that the low prices are real. For a wider picture, the cost of living by state ranking on Out of State Guide shows all 50 states using the BEA index.
| State (BEA 2024) | Price index | Median rent per month | Median home value | Median household income |
| Arkansas | 86.9 | $947 | $188,000 | $60,773 |
| Mississippi | 87.0 | $954 | $169,800 | $56,447 |
| Iowa | 87.8 | $972 | $208,000 | $75,059 |
| Oklahoma | 87.8 | $1,014 | $199,800 | $65,039 |
| Louisiana | 88.2 | $1,064 | $216,500 | $60,756 |
| South Dakota | 88.6 | $946 | $257,400 | $75,081 |
| Alabama | 88.8 | $1,007 | $209,900 | $63,999 |
| North Dakota | 89.0 | $954 | $249,900 | $76,657 |
| West Virginia | 89.5 | $872 | $162,600 | $59,608 |
| Kansas | 90.1 | $1,060 | $217,200 | $74,275 |
Sources: BEA Regional Price Parities 2024; Census Bureau American Community Survey 2020 to 2024 five year estimates, as compiled on Out of State Guide.
What actually makes these states cheap?
Housing, almost entirely. In the MERIC data Oklahoma’s housing index is 65.1, which is 35 percent below the national level, while its groceries sit at 94.1 and its utilities at 97.6. The same pattern holds in Alabama, Iowa, West Virginia and Mississippi, where housing falls between 68 and 71 but nearly everything else lands in the nineties.
That matters for planning. A low index is mostly a statement about rent and home prices. If you already own a home elsewhere, or you plan to rent a small apartment, the saving will be smaller than the headline suggests. Groceries, insurance and gas cost roughly what they do everywhere else. The general idea of comparing prices across places is explained on Wikipedia’s page on the cost of living, which is a good primer if indexes are new to you.
The ten least expensive states, one at a time
Oklahoma
Oklahoma leads on housing (65.1) and transportation (83.9), but its health care index of 96.7 is one of the highest on this list. Median gross rent is $1,014 and the median household income is $65,039. If your budget leans on rent and driving, Oklahoma is hard to beat.
Alabama
Alabama pairs a housing index of 68.6 with a health care index of 85.2. Median rent is $1,007. Its combined state and local sales tax averages about 9.46 percent, among the highest in the country, so cheap housing and expensive shopping balance out more than people expect.
Iowa
Iowa is the standout on utilities at 81.7 and has a higher median household income, $75,059, than any other state in the top five. Median rent of $972 against that income makes it one of the most comfortable rent burdens in the country, a point the next section tests properly.
West Virginia
West Virginia has the lowest median rent ($872) and the lowest median home value ($162,600) of the BEA top ten. The trade is a lower household income at $59,608 and a transportation index of 97.7, so driving costs are close to average.
Kansas
Kansas has a mid range housing index of 78.7 but very cheap transportation at 84.4. Median household income is $74,275 and median rent is $1,060, which keeps the income to rent balance healthy.
Mississippi
Mississippi has the lowest health care index in the table (84.8) and a housing index of 70.8, with a median home value of $169,800. It also has the lowest median household income of any state on this page, $56,447, so the savings only help if you bring a paycheck or retirement income from elsewhere.
Missouri
Missouri is the most balanced state on the list, with every category between 77.7 and 95.4. MERIC reports that all participating Missouri cities came in below the national average, with Joplin lowest at 83.8.
Arkansas
Arkansas tops the BEA ranking and sits eighth in MERIC. Median rent is $947 and the median home value is $188,000. Its combined sales tax averages about 9.48 percent, so budget for that on everyday purchases.
Indiana
Indiana has the weakest savings on groceries (98.2) and transportation (98.1) in the top ten, yet it earns its spot through housing at 77.5. Its flat state income tax rate dropped to 2.95 percent for 2026, according to the Tax Foundation.
Tennessee
Tennessee ties Indiana at 89.7 and has the highest housing index of the ten (80.0). It makes up for that with no state tax on wages and the lowest utilities index in the group outside Iowa (88.0). The cost is a combined sales tax near 9.61 percent.
Cheap is not the same as affordable: rent against income
A state can have low prices and still feel tight if local pay is low. A quick check is to divide a year of median rent by the median household income. The result below uses Census ACS 2020 to 2024 figures for the cheapest states.
South Dakota (15.1 percent) and Iowa (15.5 percent) are the most comfortable. Louisiana (21.0 percent), Tennessee (20.5 percent) and Mississippi (20.3 percent) are the tightest of the group, even though Louisiana and Mississippi both rank in the BEA top five for low prices. Median figures describe whole states and mix renters with owners, so use them only to compare, never to predict your own budget.
If you will keep a salary from a higher cost state, the picture flips. Use the salary equivalency calculator to see what your current pay is worth in each destination.
Taxes can wipe out part of the saving
Nine states charge no individual income tax in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Two of them, Tennessee and South Dakota, are already in this guide’s top group of cheap states.
But a state without an income tax still has to collect money somewhere. Tennessee’s combined average sales tax is about 9.61 percent, Arkansas is near 9.48, Alabama near 9.46 and Louisiana tops the nation at roughly 10.13, according to the Tax Foundation’s 2026 midyear figures. Texas has no income tax and an average combined sales tax of about 8.2 percent, but its state and local property tax collections run about $2,248 per person. Owners feel that far more than renters do.
The cost of living index does not include state taxes, so run your own numbers. The tax impact calculator and the 2026 take home pay estimator let you enter income, property and sales tax scenarios for any state.
Which cheap state fits your situation?
| If you are | States worth a closer look | Why |
| A renter on a modest income | Iowa, South Dakota, Kansas, West Virginia | These have the lowest rent to income ratios in the data above, between 15 and 18 percent. |
| A first time buyer | West Virginia, Mississippi, Arkansas, Oklahoma | Median home values sit between $162,600 and $199,800. Run the numbers with a rent versus buy calculator first. |
| A remote worker with a higher salary | Tennessee, South Dakota, Texas | No state income tax and mid range prices. Texas ranks 15th in MERIC at 90.8. |
| Retired with a fixed income | Alabama, Mississippi, West Virginia | Health care indexes of 85.2, 84.8 and 88.6. Check how each state taxes your pension and withdrawals. |
| A family choosing schools and jobs | Iowa, Kansas, Missouri, Indiana | Higher household incomes and balanced prices. School quality still needs local research. |
Treat the table as a starting point, then compare a specific pair of places with the state to state comparison tool. It shows rent, home value, income and commute side by side for any two states.
How much would you really save by moving?
A rough way to estimate is to multiply your current monthly spending by the ratio of the two indexes. A household spending $5,000 a month in California (index 140.3) would need about $2,960 a month to buy a similar basket in Oklahoma (83.0). That is a very rough illustration, because it assumes your spending pattern matches the national basket.
Then subtract the one time cost of getting there. Divide your total moving cost by your expected monthly savings to find the payback period. For example, a hypothetical $6,000 move with $800 a month in savings pays for itself in about seven and a half months. Distance, home size and timing all change the first number, so build it with the moving budget calculator and read the guide to moving costs before you compare quotes. When you are ready to hire help, see how to hire interstate movers safely.
Mistakes people make when chasing a low cost state
The first mistake is moving for the state average instead of the town. Inside Missouri, MERIC’s city indexes range from 83.8 in Joplin to 91.6 in Springfield, so a single state can contain both a bargain and a merely average place. Pick a city, then price it.
The second mistake is ignoring insurance and weather. Storm damage has pushed up homeowners insurance in parts of the Midwest and South, so get a real quote before you fall for a listing. The third is forgetting that the cheapest places often have the thinnest job markets and the longest drives to specialists. A price index cannot show you either of those.
The fourth is skipping the paperwork. A new state means a new driver’s license, vehicle registration and tax residency date. Use the new resident DMV checklist and the state tax residency checklist early, and keep the moving out of state checklist open as your timeline.
A simple five step way to choose
| Step | What to do | How |
| 1 | Shortlist three states | Start from the two rankings above and keep states that appear near the top of both. |
| 2 | Test income against rent | Use the rent to income chart, then replace it with your own pay and a real listing. |
| 3 | Add taxes | Run income, sales and property tax scenarios for each finalist. |
| 4 | Price the move | Build a one time budget and calculate your payback period. |
| 5 | Visit before you commit | Rent short term in a target city and check commute, healthcare access and insurance quotes. |
Frequently asked questions
What is the least expensive state to live in?
Oklahoma, based on the second quarter 2026 MERIC cost of living index at 83.0. On the BEA 2024 price index Arkansas ranks first at 86.9.
What is the cheapest state to retire in?
No single state wins for everyone. Alabama and Mississippi have the lowest health care indexes in the MERIC top ten, and Tennessee and South Dakota charge no tax on wages, though you should confirm how each state treats pensions and retirement account withdrawals.
Is the cheapest state also the best place to live?
Not automatically. Low prices often come with lower local wages, fewer jobs or longer distances to care. Compare income, taxes and quality of life, not only the index.
Which state has the cheapest rent?
West Virginia, at a median gross rent of $872 per month, followed by South Dakota ($946) and Arkansas ($947), according to Census estimates for 2020 to 2024.
Which state has the cheapest homes to buy?
West Virginia has the lowest median home value among the cheapest states at $162,600, followed by Mississippi at $169,800 and Arkansas at $188,000.
Does a cost of living index include taxes?
MERIC’s index covers prices for groceries, housing, utilities, transportation, health care and miscellaneous goods. It does not include income, property or sales taxes, so add those yourself.
Which cheap state has no income tax?
Tennessee and South Dakota both charge no individual income tax in 2026. Texas does too and ranks 15th on MERIC’s list, though it has higher property taxes.
How often do these rankings change?
MERIC updates quarterly and the order shifts by a few places each time. Oklahoma held first place in both the first and second quarters of 2026. Check again before making a final decision.
