10 cheapest US states to live in right now (2026)

Cost of living in the US is not evenly distributed. The composite index runs from about 84 in Mississippi to about 189 in Hawaii, meaning the same paycheck stretches roughly twice as far in Jackson as it does in Honolulu. Housing drives most of the gap, but grocery prices, utility rates, and state tax structure each shift the ranking. This guide lists the ten cheapest states for 2026, with median home prices, average rent, and the single biggest factor that lands each state on the list.

The 10 cheapest states ranked by cost-of-living index

The composite index averages housing, groceries, utilities, transportation, healthcare, and miscellaneous goods against a national baseline of 100. Anything under 90 counts as clearly cheaper than average. Every state on this list is under 92.

Rank	State	Index	Median home price	Capital
1	Mississippi	84.6	$175,000	Jackson
2	Oklahoma	86.1	$205,000	Oklahoma City
3	Kansas	86.6	$215,000	Topeka
4	Alabama	87.4	$225,000	Montgomery
5	West Virginia	87.7	$160,000	Charleston
6	Arkansas	88.4	$195,000	Little Rock
7	Tennessee	89.0	$285,000	Nashville
8	Missouri	89.1	$235,000	Jefferson City
9	Iowa	89.9	$215,000	Des Moines
10	Indiana	90.6	$225,000	Indianapolis

What each state gets right on affordability

Nine of the ten cheapest states are in the South or the Midwest. Real estate is the common thread, but each state has its own reason for staying cheap.

• Mississippi ranks first on housing and near the top on healthcare. The median home price in Jackson is under $175,000, and the state exempts Social Security, pensions, and 401(k) withdrawals from state income tax. The nickname is the Magnolia State, the capital is Jackson, and the population sits near 2.9 million.
• Oklahoma pairs cheap housing with the country's second-lowest grocery costs. Oklahoma City's median home price is around $215,000, and the state charges a top income tax of 4.75 percent. The capital is Oklahoma City and the state nickname is the Sooner State.
• Kansas wins on utilities and transportation. Electricity averages 11 cents per kilowatt-hour, well under the 16-cent national average, and gasoline is consistently 20 to 30 cents below the US price. Topeka is the capital; the motto is "Ad astra per aspera."
• Alabama has the lowest property taxes in the country. The average annual property tax on a median-priced home is about $700, roughly a fifth of the national figure. Montgomery is the capital, and the state has 9 electoral votes.
• West Virginia is the cheapest state for housing outright. The median home price is roughly $160,000 statewide, and rural counties list three-bedroom houses under $100,000. Charleston is the capital and the state was admitted to the Union in 1863.
• Arkansas combines cheap groceries with the lowest per-capita healthcare spending in the South. Little Rock rents run about 30 percent under the national median for a two-bedroom apartment.
• Tennessee is the only state on this list with no wage income tax. Nashville's housing costs have risen sharply since 2020, but Memphis, Knoxville, and Chattanooga still land well under the national median.
• Missouri has the cheapest utilities in the Midwest and one of the lowest overall grocery indexes. Kansas City and St. Louis both offer sub-$250,000 median home prices in most zip codes.
• Iowa wins on transportation and childcare. Des Moines routinely tops national rankings for salary-to-cost-of-living ratio, which is why it draws remote workers from Chicago and Minneapolis.
• Indiana is the cheapest state north of the Ohio River. Indianapolis has a flat 3.05 percent state income tax and property taxes capped at 1 percent of home value.

Housing, groceries, and taxes broken down

Cost of living is really three separate calculations stapled together. Housing swings the widest, groceries and utilities move together, and state tax structure decides who actually keeps the savings.

Housing

Five of the ten cheapest states have median home prices under $220,000. West Virginia, Mississippi, and Arkansas are the only states in the country where the statewide median stays under $200,000. Rent tells the same story: two-bedroom apartments in Jackson, Little Rock, and Charleston list in the $850 to $1,000 range, against a US median above $1,600.

Groceries and utilities

Oklahoma, Kansas, and Missouri form a tight band of low grocery prices, running 6 to 9 percent under the national average. Utility costs in the same three states are held down by cheap natural gas and coal-heavy electricity grids. Alabama and Mississippi have higher utility bills in summer because of air-conditioning load, which partly offsets their housing advantage.

State taxes

Tennessee has no income tax, period. Mississippi's top rate is 4.4 percent and the state exempts most retirement income. Alabama and Missouri both allow federal tax deductions on state returns, which lowers the effective rate. Kansas and Iowa are middle-of-the-pack on income tax but keep property taxes below the national average.

Cheap states with no income tax

Nine US states levy no personal wage income tax. Only two of them, Tennessee and Texas, are broadly affordable. The other seven either sit at national-average cost of living (South Dakota, Wyoming) or well above it (Florida, Nevada, New Hampshire, Washington, Alaska).

• Tennessee: no wage income tax, cost-of-living index 89.0. Capital: Nashville. Admitted: 1796.
• Texas: no wage income tax, cost-of-living index 92.5. Higher property taxes (1.6 percent effective rate) offset some savings for homeowners. Capital: Austin.
• South Dakota: no wage income tax, cost-of-living index 95.6. Capital: Pierre. Population: 910,000.
• Wyoming: no wage income tax, cost-of-living index 96.8. Capital: Cheyenne. The state has 3 electoral votes.

For renters and remote workers, Tennessee is the strongest combination of cheap housing and no income tax. For homeowners planning to stay put, Mississippi and Alabama usually beat Texas once property taxes are included.

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