The most affordable states in America

Understanding the most affordable states in America

Across all 51 states and the District of Columbia, price level spans from 86.9 in Arkansas at the top of the list to 110.7 in California at the bottom. The three at the top are Arkansas, Mississippi, and Iowa; the three at the bottom are District of Columbia, Hawaii, and California.

The most affordable states are concentrated in the South and the Midwest. States like Arkansas, Mississippi, and Oklahoma sit around 12 to 13 percent below the national price level, and low housing costs do most of the work — rent and home prices in these states are a fraction of what they are on the coasts. Because goods cost roughly the same everywhere, an affordable state is almost always an affordable state because of cheap housing.

Affordable does not automatically mean better off. Lower-cost states often have lower wages too, so the real test is whether pay keeps pace with prices. Some low-cost states punch above their paychecks once you adjust for the cost of living; others have incomes so low that even cheap prices do not fully make up the gap. Pair this ranking with median income to see which is which.

For remote workers, retirees, and anyone whose income does not depend on a local employer, a low cost of living is close to free money — the same salary or pension simply goes further. That is the group for whom this list matters most, and it is worth checking each state's taxes alongside its prices, since a cheap state with a heavy tax load can be less of a bargain than it first appears.