With rising rents, higher utility bills, and uneven tax policies across the U.S., more Americans are looking for states where their money goes further. In 2025, affordability is no longer just about low rent; it’s about combining cost savings with livability, from healthcare, groceries, to housing and state taxes.
This guide compares the cheapest states to live in based on key metrics like home prices, income tax rates, and daily living costs. Whether you're relocating, retiring, or investing, these are the places offering real value, not just lower prices, but better balance.
TL;DR
- Several U.S. states offer below-average living costs in 2025, especially across housing, groceries, and utilities.
- States with no income tax or low property taxes stretch your monthly income further.
- Cheaper healthcare and energy bills contribute to overall livability, not just savings.
- Home prices in these areas are well below national averages, improving affordability for buyers and renters.
- These locations are gaining popularity among families, retirees, and remote workers looking for long-term value.
Comparing The Cheapest States To Live In USA
To give you a quick snapshot of how these states stack up, we’ve compared housing costs, taxes, and overall affordability. These metrics reflect what most residents actually feel in their monthly budgets, not just the sticker price on a home.
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10 Cheapest States To Live In USA in 2025
The following states rank among the most affordable in the U.S. based on housing prices, taxes, and daily living expenses. Here’s a detailed analysis:
Tennessee
Tennessee combines low overall living costs with no state income tax, making it highly appealing for individuals and families alike. Housing prices are well below the national average, and utility, healthcare, and grocery costs all trend lower. Residents benefit from both rural affordability and access to vibrant urban amenities without financial strain.
Mississippi
Mississippi offers some of the lowest housing costs in the country, paired with reduced expenses for gas, groceries, and healthcare. Property taxes are also among the lowest nationwide, and retirees often qualify for added tax benefits. The state consistently ranks as one of the most cost-effective places to live.
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Arkansas
Arkansas stands out with low housing prices, below-average utility costs, and affordable food options. Everyday expenses are manageable, especially in smaller cities where property taxes are modest. The state’s consistent affordability makes it ideal for budget-conscious renters, first-time buyers, and anyone prioritizing cost over size or location.
Alabama
Alabama offers wide-ranging affordability across housing, transportation, and healthcare. With one of the lowest property tax rates in the country, homeowners save more long-term. The cost of groceries and basic services is also below national averages, creating a lower monthly burden for individuals and growing households.
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South Dakota
With no state income tax and overall expenses well below the U.S. average, South Dakota remains a top pick for affordability. Housing is inexpensive, and the cost of living stays manageable even in more developed areas. The state’s straightforward tax structure appeals to retirees and self-employed professionals alike.
Oklahoma
Oklahoma combines low home prices with some of the cheapest rent averages in the country. Daily expenses like food, utilities, and healthcare also stay low, offering financial breathing room. Affordable programs and financial assistance make it easier for residents to access housing and essential services without overextending.
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Texas
Texas provides significant savings thanks to its lack of income tax and relatively low cost of living outside major cities. While home prices vary, many areas remain accessible to first-time buyers. Utility and grocery bills also trend below national levels, creating strong value for those looking to relocate or invest.
Kansas
Kansas delivers reliable affordability through low housing costs, accessible healthcare, and stable grocery pricing. Residents benefit from a strong job market in industries like tech and manufacturing, with a low cost-of-living index helping income stretch further. It’s a strong choice for middle-income earners seeking long-term financial stability.
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Wyoming
Wyoming combines low housing prices with no state income tax, making it an excellent option for affordability without sacrificing space or lifestyle. Utility and transportation costs remain under control, and day-to-day living expenses are manageable. The state’s tax-friendly policies appeal to both residents and small business owners.
West Virginia
West Virginia offers extremely low housing costs and modest utility bills, keeping overall expenses down. Property taxes are also lower than average, making ownership more accessible. While wages trend lower, so do most living costs, making this a solid option for those seeking a simpler, cost-effective lifestyle.
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Why Are These States So Affordable?
Affordability goes beyond price tags. These states share key traits that make them consistently cheaper to live in, without sacrificing essentials.
Lower Housing Costs Drive Overall Savings
The biggest factor in affordability is housing. These states offer median home prices far below national averages, often under $200,000. Whether buying or renting, lower housing costs mean smaller monthly payments and better entry points for first-time buyers and investors.
Favorable Tax Policies Stretch Income
Many of these states have no income tax or low property tax rates. That translates into more take-home pay and less money lost to government deductions. For retirees, tax-friendly policies can also protect savings and lower the cost of living in later years.
Utilities and Groceries Cost Less
Day-to-day essentials like electricity, gas, and groceries are often cheaper in these markets. States with low utility costs help offset seasonal energy spikes, and reduced food prices ease pressure on families and single earners alike.
Healthcare Remains Cheaper in Key States
Several of these states offer significantly lower healthcare costs, including doctor visits, insurance premiums, and prescriptions. This makes a big difference for seniors, families with children, and anyone managing chronic conditions without premium-level insurance coverage.
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Conclusion
Affordability is more than just a budget-friendly perk; it’s a strategic advantage. The cheapest states to live in offer more than low housing costs; they provide tax savings, lower daily expenses, and long-term financial flexibility for both residents and investors.
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FAQs
Do Any of These States Have No State Income Tax?
Yes. Several states in the list, including those in the South and Midwest, do not collect state income tax. This allows residents to keep more of their earnings and improve their monthly cash flow.
Is It Cheaper to Rent or Buy in These States?
In many cases, buying is more cost-effective due to low home prices and property taxes. However, renting remains a flexible and affordable option in cities where housing inventory or financing access may be limited.
Are These States Still Good for Long-Term Investment?
Yes. These markets show long-term potential thanks to inbound migration, growing job sectors, and investor-friendly housing prices. Their affordability also supports stable rental demand and better returns on entry-level property investments.
What Should I Consider Besides Cost When Relocating?
Beyond affordability, consider healthcare access, school quality, job prospects, and climate. Livability factors like community safety and infrastructure also play a key role in ensuring long-term satisfaction after moving.
