The 10 States With the Lowest Cost of Living (2026)
Mississippi's cost of living runs 17% below the national average — here's the full 2026 ranking of the 10 states with the lowest cost of living, based on the C2ER Cost of Living Index.
Worth noting: All 10 states on this list are concentrated in the South and Plains regions. Housing is the biggest driver — every state here has a housing sub-index in the 50s-70s range, roughly 30-45% below the national average.
States With the Lowest Cost of Living, Ranked #1 to #10
Mississippi — Index 83.3
The state with the lowest cost of living in the country, roughly 17% below the national average. Housing sub-index of 56.2 is the lowest in the U.S., with a median home value of just $162,100.
Housing 56.2Median Home $162,100West Virginia — Index 84.1
A close second, with the second-lowest housing sub-index in the country (56.8) and a median home value under $146,000.
Housing 56.8Median Home $145,600Kansas — Index 84.8
Slightly higher median income than most states on this list ($64,521), paired with a moderate housing sub-index of 62.0.
Housing 62.0Median Home $207,600Oklahoma — Index 84.9
Housing sub-index of 60.8 keeps costs low, with a median home value of $196,500 — well below the national median.
Housing 60.8Median Home $196,500Arkansas — Index 86.0
Rounds out the top 5 with a housing sub-index of 62.0, tied with Kansas, and one of the lower median incomes on this list.
Housing 62.0Median Home $192,800Missouri — Index 87.1
A higher median income than most of the top 5 ($61,043), with a housing sub-index of 67.5 that keeps overall costs moderate.
Housing 67.5Median Home $222,300Kentucky — Index 87.5
Housing sub-index of 66.2 and a median home value of $198,500 keep Kentucky solidly in the top 10 for lowest cost of living.
Housing 66.2Median Home $198,500Alabama — Index 87.9
A median home value of $216,500 is the highest in the top 8, but still well below the national median, keeping the state affordable overall.
Housing 66.8Median Home $216,500Iowa — Index 89.0
The highest median income in the top 10 ($65,573), paired with a housing sub-index of 69.8 — a strong combination of affordability and earning power.
Housing 69.8Median Home $208,700Indiana — Index 89.4
Rounds out the top 10 with a housing sub-index of 72.1 — the highest in the group, but still well below the national average of 100.
Housing 72.1Median Home $227,800Quick-Reference: All 10 States at a Glance
| Rank | State | Composite Index | Median Home Value | Median Income |
|---|---|---|---|---|
| 1 | Mississippi | 83.3 | $162,100 | $46,511 |
| 2 | West Virginia | 84.1 | $145,600 | $50,884 |
| 3 | Kansas | 84.8 | $207,600 | $64,521 |
| 4 | Oklahoma | 84.9 | $196,500 | $56,956 |
| 5 | Arkansas | 86.0 | $192,800 | $52,528 |
| 6 | Missouri | 87.1 | $222,300 | $61,043 |
| 7 | Kentucky | 87.5 | $198,500 | $55,573 |
| 8 | Alabama | 87.9 | $216,500 | $56,950 |
| 9 | Iowa | 89.0 | $208,700 | $65,573 |
| 10 | Indiana | 89.4 | $227,800 | $61,944 |
National average composite index = 100. Source: C2ER Cost of Living Index 2026, BEA Regional Price Parities, U.S. Census Bureau ACS.
Why These States Stay Affordable
All 10 states on this list cluster in the same two regions, and the reasons behind their affordability are remarkably consistent.
South + Plains: The Affordable Cluster
Mississippi, West Virginia, Kansas, Oklahoma, Arkansas, Missouri, Kentucky, Alabama, and Indiana all sit below composite 90 — housing dramatically below national medians is the common thread. This cluster is also a first-choice destination for remote workers earning coastal salaries, since the gap between what they earn and what they spend is unusually wide.
Housing Is the Whole Story
Every state in the top 10 has a housing sub-index in the 50s-70s — 30 to 45% below the national average. Groceries, utilities, and transportation costs are much closer to the national baseline across these states; it's housing specifically that drives the overall affordability.
Prices Have Stayed Flat, Not Fallen
These states haven't gotten cheaper in relative terms — they've simply stayed flat while higher-cost states have risen faster. No U.S. state has seen meaningful cost-of-living deflation in recent years; the differences between states come from how fast prices rise, not whether they rise at all.
The Income Trade-Off
The catch worth knowing: Every state in this top 10 also has a below-average median household income. Mississippi's median income ($46,511) is roughly 30% below the national median, for example. Wages tend to scale with cost of living — so the "savings" from a lower cost of living are partly offset by lower earning potential in the same state, especially for jobs tied to local pay scales rather than remote salaries.
Frequently Asked Questions
StatewiseFinance's Take: If you're a teacher, nurse, or public employee considering a move for affordability, look past the headline index number. Check the local salary scale for your profession specifically — a lower cost of living doesn't help much if your field's local wages are proportionally lower too. States like Iowa and Kansas, with above-average incomes for this list, tend to offer the best combination.
Bottom Line: All 10 states on this list share the same driver — affordable housing — and the same trade-off — lower median income. The best fit depends on whether your income is tied to the local job market or portable, like a remote salary or pension.
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