Overview
As rental costs reach unprecedented highs across much of the U.S., the search for affordable housing is no longer just about finding the cheapest rent, it's about finding value in the broader context of livability, job access, and long-term financial sustainability.
Introduction
In 2025, the U.S. rental housing landscape is under immense pressure. The national average rent has reached a historic high of approximately $1,997 per month, underscoring a deepening affordability crisis for millions of Americans. This surge is fueled by a combination of macroeconomic forces—elevated inflation, sluggish wage growth, and an ongoing housing supply shortage. National vacancy rates remain below 6%, further constraining availability as demand continues to outpace supply.
Remote work has dramatically reshaped the rental market’s geography. Initially, it allowed renters to flee expensive coastal cities. However, it has since exerted upward pressure on rents in smaller metros and historically affordable regions, as internal migration patterns changed. States like Florida, Texas, and Colorado have witnessed substantial inbound migration, contributing to significant rental increases in previously budget-friendly areas. Simultaneously, cities once known for their affordability—such as Boise, Salt Lake City, and Charlotte—have seen double-digit rent hikes over the past year.
Despite these national pressures, some states continue to offer significantly lower rental costs. Outliers like West Virginia, Arkansas, and Mississippi report average rents in the $800–$1,200 range, making them viable options for cost-conscious renters, remote workers, and retirees.
Top 10 States with the Lowest Rent in 2025
These states have demonstrated resilience against national rental inflation due to a combination of economic, geographic, and policy-related factors.Here are the 10 states with the lowest average rent:
| Rank | State | Average Rent (2025) |
|---|---|---|
| 1 | Oklahoma | $1,035 |
| 2 | North Dakota | $1,077 |
| 3 | Arkansas | $1,093 |
| 4 | South Dakota | $1,127 |
| 5 | Iowa | $1,220 |
| 6 | Louisiana | $1,235 |
| 7 | Kansas | $1,243 |
| 8 | Missouri | $1,273 |
| 9 | West Virginia | $1,275 |
| 10 | Ohio | $1,279 |
Factors Driving Rental Affordability
Rental affordability in states like West Virginia, Arkansas, and South Dakota is the result of a combination of demographic, economic, and policy-related factors. Below is a breakdown of the key drivers that keep rental costs significantly lower in these regions:
1. Population Density and Urban Sprawl
States with lower population densities face less housing demand pressure. In areas such as West Virginia (2025 population density: ~75 people per square mile) and South Dakota (~12 people per square mile), the absence of large urban hubs reduces the strain on rental housing supply. This results in a more balanced housing market where rental demand does not drastically outpace supply.
Moreover, these states often have more expansive rural or suburban layouts. Urban sprawl—where cities are less compact and land is more available—prevents the kind of land scarcity seen in coastal metros. This geographic spread makes it easier for developers to build new properties, which keeps rental inventory higher and prices more stable.
2. Housing Development and Zoning Policies
Affordable states tend to implement zoning laws that are more favorable to residential development. For example, Kentucky and Alabama promote multi-family housing through less restrictive zoning codes, allowing duplexes, triplexes, and apartment complexes to be built with fewer regulatory hurdles.
Additionally, construction inputs in these states are significantly more affordable. According to recent data (2025), the average construction cost per square foot in these areas is 20–30% lower than in high-cost states like California or New York. This is largely due to reduced land acquisition costs and lower prevailing wages for labor. The result is a rental market with greater inventory, less bottlenecked supply, and more competitive pricing.
3. Economic Composition
The economic profile of these affordable states plays a central role in shaping their rental markets. States such as Mississippi, Arkansas, and Iowa rely heavily on sectors like agriculture, logistics, manufacturing, and public service. These industries tend to offer moderate wages, unlike finance or tech-driven economies that attract higher-income residents and push up housing prices.
Because the average median household income in these states remains modest (e.g., Mississippi: ~$52,000, Arkansas: ~$54,000 in 2025), the housing market adjusts accordingly. Luxury rental demand is limited, leading to more practical housing development geared toward affordability. The absence of speculative investment in luxury condos or high-end rentals also helps stabilize rent prices.
4. Migration Patterns and Remote Work Spillover
While remote work has redefined mobility, the most popular migration destinations—Texas, Florida, Arizona, and Colorado—have already absorbed the bulk of inbound movers, putting upward pressure on those rental markets. In contrast, states like Missouri, Iowa, and Indiana remain under the radar, offering affordable housing without sacrificing quality of life.
For instance, Des Moines, Iowa, continues to see modest rent increases—just 2.3% YoY in early 2025—compared to double-digit spikes in cities like Tampa or Denver. These overlooked states are now becoming hidden gems for remote workers seeking affordability, safety, and access to green space, without the intense demand that drives up rental costs elsewhere.
Cost of Living vs. Rent: A Holistic Affordability Index
While rent is a major component of household expenditure, it is critical to assess the overall cost of living to understand where a dollar stretches furthest. Below is a comparative analysis of rental affordability alongside the general cost of living:
| State | Average Rent (2025) | Cost of Living Index (2025) | Difference from National Average |
|---|---|---|---|
| Mississippi | $910 | 83.3 | 16.7% lower |
| Arkansas | $890 | 84.0 | 16.0% lower |
| West Virginia | $825 | 85.1 | 14.9% lower |
| Kentucky | $925 | 86.2 | 13.8% lower |
| Alabama | $955 | 87.1 | 12.9% lower |
These metrics make clear that rent affordability in these states is not isolated; it is part of a broader trend of lower total living costs, making them strategic choices for long-term residence, relocation, or investment.
Emerging Urban Centers in Affordable States
While state-level averages offer a broad perspective, the real affordability story is unfolding in several emerging urban centers across America’s least expensive states. These mid-sized cities combine livability, career opportunities, and significantly lower rents than their coastal counterparts, creating high value for both renters and property investors. Here's a closer look at some standout cities in 2025:
Morgantown, West Virginia – $795/month
As home to West Virginia University, Morgantown is both a college town and a regional healthcare hub. Despite its growing student population and academic infrastructure, rental prices remain well below the national average. The city's low cost of living, combined with investments in medical research and education, continues to attract young professionals and graduate students. With average rents under $800, Morgantown offers high livability without compromising affordability.
Fayetteville, Arkansas – $875/month
Fayetteville has emerged as a key economic engine in northwest Arkansas, supported by the University of Arkansas and its proximity to the headquarters of Fortune 500 companies like Walmart and Tyson Foods. The city's vibrant arts scene, expanding tech presence, and access to the Ozark Mountains make it attractive to remote workers and skilled laborers. With an average rent of just $875, it delivers exceptional value in a region with rising job growth and modern infrastructure.
Hattiesburg, Mississippi – $900/month
Strategically located between Jackson, MS, and New Orleans, LA, Hattiesburg serves as a crucial logistics and transportation hub for the Gulf South. It also houses the University of Southern Mississippi and Forrest General Hospital, making it a growing center for education and healthcare employment. Despite this, rental costs remain extremely low. At $900 per month on average, Hattiesburg is gaining attention as a high-potential market for renters seeking affordability with professional opportunities.
Bowling Green, Kentucky – $910/month
Bowling Green offers a blend of industrial growth and educational stability. It's home to Western Kentucky University and the GM Corvette Assembly Plant—two major employment anchors that drive steady economic activity. The city's rental market remains accessible, with 2025 rates averaging $910 per month. This affordability, paired with strong local infrastructure and low unemployment, is attracting recent graduates and families looking for economic mobility without high housing costs.
Sioux Falls, South Dakota – $935/month
Sioux Falls stands out as one of the fastest-growing small cities in the Midwest. With a diversified economy spanning healthcare, banking, and retail, it has maintained a low unemployment rate while investing in downtown revitalization and public infrastructure. The city’s affordability is a key draw: average monthly rent is just $935, offering relief compared to rising prices in larger metro areas. Its high quality of life, coupled with low taxes and a business-friendly climate, positions Sioux Falls as a top destination for remote professionals and investors alike.
Implications for Renters, Investors, and Policymakers
The rise of affordable rental markets in 2025 has distinct takeaways for different stakeholders, each with unique opportunities and responsibilities.
For Renters: Significant Monthly Savings
Renters relocating to affordable states like West Virginia or Mississippi can save over $14,000 annually compared to national averages. For remote workers and young professionals, this opens doors to better financial stability without sacrificing quality of life. Cities like Fayetteville and Hattiesburg offer strong community resources and low living costs—ideal for flexible, budget-conscious lifestyles.
For Investors: High-Yield, Low-Entry Opportunities
Emerging markets such as Sioux Falls and Bowling Green offer lower entry costs and strong cap rates (6–8%). With consistent tenant demand from universities and healthcare sectors, these areas provide a reliable path to long-term rental income and moderate property appreciation. Investor-friendly regulations and minimal rent control add to their appeal in 2025’s landscape.
For Policymakers: Managing Growth Responsibly
Local governments must act to preserve affordability amid rising interest rates. Strategic investments in infrastructure, zoning reform, and sustainable housing development are critical. Cities seeing increased migration, like Morgantown, must scale housing supply to match demand and prevent the affordability issues faced by larger urban centers.
Conclusion
The data from 2025 paints a clear picture: states like West Virginia, Arkansas, and Mississippi are no longer just “cheap” alternatives—they're becoming strategic choices for renters, digital nomads, and investors alike. With average rents under $1,200 and cost-of-living indices up to 17% lower than the national average, these regions offer a financial cushion that is increasingly rare in today's volatile housing economy.
Crucially, these aren't just rural outposts with little opportunity. Cities like Sioux Falls, Bowling Green, and Fayetteville are emerging as growth hubs, offering economic momentum without the cost penalties seen in overheated metros. For renters, that translates to more room in the budget. For investors, it signals a strong, sustainable path to yield. And for policymakers, it emphasizes the urgency of balanced growth strategies before affordability slips away.
In an age where flexibility is currency—where you can live where it makes the most sense, not just where the jobs are—understanding where your rent dollar goes furthest is essential. Whether you're relocating, investing, or shaping housing policy, these insights provide a data-driven compass for smarter decisions in 2025.