The cheapest states to live in can be ranked without guessing, because the federal government measures it. Regional price parities express each state’s price level as a percentage of the national one, so 100 is the national average and anything below it is cheaper.
On the 2024 figures, Arkansas is the cheapest state in the country at 86.9, about thirteen percent below the national level. The ten below are ranked on that measure, and the striking part is how much of the difference comes from one category.
What the Price Index Actually Measures
This ranking uses the Bureau of Economic Analysis regional price parity statistics, which are published annually and cover all fifty states and the District of Columbia. the February 2026 release covering 2024 is the current one.
- 100 is the national level. A state at 87 has prices roughly thirteen percent below the national average for the same basket of goods and services.
- Four components are published. Goods, housing rents, utilities and other services, which is what lets you see where a state is actually cheap rather than just that it is.
- It is prices, not incomes. A low index does not mean a state is affordable, because wages tend to be lower too. It means your money buys more there than the same money would elsewhere.
That last distinction is the one that matters for a decision. Moving to a cheap state with a salary earned there is a different proposition from moving with a salary earned somewhere expensive, and only the second one captures the full gap.
What the index does not include is tax. Several states on this list levy no personal income tax, and that advantage sits on top of the price difference rather than inside it.
Cheapest States to Live In: Price Index by Category
All ten, scored against a national price level of 100 for the 2024 statistics.
| # | State | All items | Housing | Goods | Utilities |
|---|---|---|---|---|---|
| 1 | Arkansas | 86.9 | 58.2 | 93.6 | 74.7 |
| 2 | Mississippi | 87.0 | 56.5 | 96.2 | 78.4 |
| 3 | Iowa | 87.8 | 65.3 | 93.7 | 83.3 |
| 4 | Oklahoma | 87.8 | 62.8 | 93.8 | 73.9 |
| 5 | Louisiana | 88.2 | 63.1 | 93.7 | 71.5 |
| 6 | South Dakota | 88.6 | 67.6 | 95.5 | 79.7 |
| 7 | Alabama | 88.8 | 61.8 | 96.4 | 84.6 |
| 8 | North Dakota | 89.0 | 71.4 | 95.7 | 73.7 |
| 9 | West Virginia | 89.5 | 54.2 | 96.5 | 92.2 |
| 10 | Kansas | 90.1 | 71.2 | 94.0 | 88.4 |
The 10 Cheapest States, Ranked
Ranked by the all-items index. Each entry gives the housing figure too, because that is where nearly all of the difference lives.
1. Arkansas: 86.9 overall
All items: 86.9 · Housing: 58.2 · Goods: 93.6 · Utilities: 74.7
Arkansas is the cheapest state in the country on the all-items index at 86.9, meaning prices sit about thirteen percent below the national level. Its housing figure of 58.2 is what drives that: rents are a little over half the national average.
Goods cost 93.6, much closer to normal, which is the pattern across this whole list. A television costs roughly what it costs anywhere because it was shipped from the same place. Shelter is what varies, and shelter is where the saving is.
2. Mississippi: 87.0 overall
All items: 87.0 · Housing: 56.5 · Goods: 96.2 · Utilities: 78.4
Mississippi sits at 87.0 overall with the second lowest housing index in the country at 56.5. On rent alone it is the cheapest state to live in outside West Virginia.
Goods at 96.2 are among the highest on this list, so the weekly shop is close to national prices. The gap between those two numbers, forty points, is the clearest illustration of what regional price differences actually consist of.
3. Iowa: 87.8 overall
All items: 87.8 · Housing: 65.3 · Goods: 93.7 · Utilities: 83.3
Iowa comes in at 87.8, tied with Oklahoma for third. Its housing index of 65.3 is higher than the states above it, but utilities at 83.3 and goods at 93.7 keep the overall figure down.
It is the most balanced of the cheap states rather than the most extreme, which makes it a useful reference point: nothing is startlingly inexpensive and nothing is expensive either.
4. Oklahoma: 87.8 overall
All items: 87.8 · Housing: 62.8 · Goods: 93.8 · Utilities: 73.9
Oklahoma also records 87.8 overall, with housing at 62.8 and the second lowest utilities index on this list at 73.9.
Utilities are the overlooked line. A state where energy is produced locally tends to show a low figure here, and across a year that difference is real money even though it never appears in a cost-of-living headline.
5. Louisiana: 88.2 overall
All items: 88.2 · Housing: 63.1 · Goods: 93.7 · Utilities: 71.5
Louisiana sits at 88.2 with housing at 63.1 and the lowest utilities figure of any state here at 71.5.
The caveat Louisiana carries is one no price index measures: insurance. Coastal exposure has pushed property premiums sharply upward, and that cost lands outside the rent figure while very much landing inside a household budget.
6. South Dakota: 88.6 overall
All items: 88.6 · Housing: 67.6 · Goods: 95.5 · Utilities: 79.7
South Dakota records 88.6, with housing at 67.6 and goods at 95.5. It is also one of the states with no personal income tax, which compounds the effect of the price level on take-home pay.
The index measures prices, not taxes, so the two advantages are separate and additive. A salary that goes further on prices and is taxed less at the state level is a different proposition from one that only does the first.
7. Alabama: 88.8 overall
All items: 88.8 · Housing: 61.8 · Goods: 96.4 · Utilities: 84.6
Alabama is at 88.8 overall with housing at 61.8, among the lowest in the country, while utilities at 84.6 are the second highest on this list.
That combination is common across the South. Air conditioning through a long humid summer is not optional, and it shows up in the utilities line in a way that northern states do not experience.
8. North Dakota: 89.0 overall
All items: 89.0 · Housing: 71.4 · Goods: 95.7 · Utilities: 73.7
North Dakota records 89.0, with housing at 71.4, the highest of these ten, offset by utilities at 73.7, among the lowest.
Its housing figure reflects a small rental market where energy employment has repeatedly tightened supply. Of the ten states here it is the one whose position has moved most across the series.
9. West Virginia: 89.5 overall
All items: 89.5 · Housing: 54.2 · Goods: 96.5 · Utilities: 92.2
West Virginia is at 89.5 overall, and it holds the single most striking number in the entire dataset: a housing index of 54.2, the lowest of any state, against California’s 154.3.
Rent in West Virginia is roughly a third of rent in California for the same statistical basket. Utilities at 92.2 are the highest on this list, which is why the overall figure is not lower still.
10. Kansas: 90.1 overall
All items: 90.1 · Housing: 71.2 · Goods: 94.0 · Utilities: 88.4
Kansas closes the ten at 90.1, with housing at 71.2 and goods at 94.0. It shares that overall figure with Nebraska, which sits just outside this list on the same number.
At ten percent below the national level, Kansas marks roughly where the cheap states stop being dramatically cheap. Below this point the differences between states narrow quickly.
Housing Does Almost All of the Work
Line the four components up and the pattern is impossible to miss. Goods barely move between states, and housing moves enormously.
Across these ten states, goods range from 93.6 to 96.5, a spread of under three points. Housing ranges from 54.2 in West Virginia to 71.4 in North Dakota, a spread of seventeen. Nationally the housing range is wider still, from West Virginia’s 54.2 to California’s 154.3.
The reason is straightforward. A television, a pair of shoes and a tank of petrol are traded nationally and priced accordingly. Shelter cannot be shipped, so its price is set entirely by local land, local supply and local demand.
The practical reading is that a cheap state is a cheap place to rent or buy, and very close to a normal place to shop. Anyone estimating a move should apply the discount to housing and almost none of it to everything else.
What the Index Leaves Out
Three costs that materially affect a household budget sit outside this measurement, and all three have caught people out.
- Insurance. Property insurance has risen sharply in states exposed to hurricanes, flooding and wildfire. Louisiana in particular carries premiums that no rent index reflects.
- Transport distance. A low price level often comes with longer journeys to work, to a hospital and to an airport. Fuel is priced in, the extra mileage is not.
- Services availability. Specialist healthcare, childcare and broadband quality vary in ways a price index cannot capture, since it measures the cost of what is available rather than whether it is available.
Utilities deserve a line of their own, because the index does capture them and people ignore it. The spread here runs from 71.5 in Louisiana to 92.2 in West Virginia, which is a twenty point difference inside a list of supposedly similar states.
How Stable These Rankings Are
Price levels move slowly, which makes this list more durable than most rankings. Arkansas was at 88.1 in 2008 and is at 86.9 now, a drift of just over one point in sixteen years.
California moved even less, from 111.2 to 110.7 across the same period. The gap between the cheapest and most expensive states has been remarkably steady, which means a decision made on these numbers is unlikely to be undone by next year’s release.
Individual states do move. North Dakota’s housing index has shifted with energy employment, since a small rental market responds sharply when several thousand workers arrive or leave.
The next update is due in December 2026 and will cover 2025. Expect the order to change by a place or two and the overall picture to stay where it is.
Frequently Asked Questions
What is the cheapest state to live in?
Arkansas, at 86.9 on the federal all-items price index for 2024, where 100 is the national level. Mississippi follows at 87.0, then Iowa and Oklahoma tied at 87.8.
Why is housing so much cheaper in some states?
Because shelter cannot be traded across state lines. Goods are shipped nationally and priced similarly everywhere, while housing is set by local land and local demand, so it ranges from 54.2 in West Virginia to 154.3 in California.
Does a low cost of living mean I will save money?
Only if your income does not fall by as much. Wages generally track local price levels, so the gain is largest for anyone who keeps an income earned elsewhere, such as remote workers and retirees on a fixed pension.
Which cheap states have no income tax?
South Dakota is the one on this list, and Tennessee, Texas, Florida, Nevada, Wyoming, Alaska, New Hampshire and Washington also levy none. Tax sits outside the price index entirely, so it is a separate saving rather than part of these figures.
