The Cheapest State to Buy a House: 15 Picks for 2023

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Malcolm-Wiley Floyd

Mar 13, 2023

CEO and Co-Founder of Stairs Financial, a YC-backed startup that connects first-time home buyers with down payment assistance programs across the US. Malcolm-Wiley studied economics at Harvard and is a licensed mortgage broker.

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    Buying a house is probably the most significant purchase you’ll ever make. If you are open to moving cross-country and flexible about where you live, you might even find yourself searching for the cheapest state to buy a house. 

    In a quest to discover which state has the cheapest real estate in the U.S, we dug into the most recent housing market data and matched it up with current mortgage rates and area median incomes. 

    After crunching the numbers, here is our list of the 15 cheapest states to buy a house in 2023. 

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      Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.

      What is the cheapest state to buy a house?

      Based on the most recent home value index and median household income data, West Virginia is the cheapest state to buy a house in 2023, both in terms of absolute home value and income-to-mortgage ratio. A typical home in West Virginia costs $144,328 and the income-to-mortgage ratio is 20.1%.

      Methodology

      Many available housing lists rank real estate affordability based on income-to-mortgage ratio. (A number gathered by stacking up average home prices and mortgage rates against area median income.)

      Income-to-mortgage ratio is valuable information, but we also recognize that what is “affordable” real estate for one person is not necessarily affordable for everyone, and vice versa. 

      With the rise of remote work making area median incomes a moot point for many people, we decided it’s also important to create a list of affordable real estate based on home values alone.

      To this end, we create two separate lists: 

      The cheapest states to buy a house in the US: This list is based on the home value index alone. 

      The cheapest states to live in the US: This list is based on income-to-mortgage ratio, using area median income, median home value index, and current mortgage interest rates. We based our data on information from two key sources: the Zillow Home Value Index and HUD median household income calculations. To calculate estimated mortgage payments, we used a mortgage interest rate of 7.5% and a 30-year fixed rate mortgage.

      The 15 cheapest states to buy a house in the U.S.

      These are the 15 cheapest states to buy a house in the U.S. in 2023, based on the median home value index alone. (In the next section, we’ll check in on the cheapest states to live in the U.S. based on income-to-mortgage ratio.)

      State
      Median
      Home Value
      Estimated
      Mortgage Payment
      West Virginia$144,330$1,011
      Mississippi $163,052$1,143
      Arkansas$177,226$1,242
      Oklahoma$183,734$1,287
      Louisiana $186,795$1,309
      Kentucky$188,241$1,319
      Iowa$193,341$1,355
      Ohio$201,688$1,411
      Kansas$203,527$1,424
      Alabama$207,145$1,449
      Michigan$214,711$1,502
      Indiana$215,818$1,510
      Missouri$220,605$1,543
      Nebraska$234,304$1,639
      Illinois$234,951$1,643

      1. West Virginia

      Median home value: $144,330

      Estimated mortgage payment: $1,011

      West Virginia tops the list of least expensive states to buy a house, because both absolute home values and the income-to-mortgage ratio are the lowest.

      However, there’s more to West Virginia than affordable housing. There are virtually endless opportunities for outdoor recreation. The entire state also sports a cozy, small-town feel. West Virginia’s largest cities — Charleston and Huntington — both have populations of just under 50,000 residents.

      2. Mississippi

      Median home value: $163,052

      Estimated mortgage payment: $1,143

      Mississippi boasts quite affordable housing prices. However, with an income-to-mortgage ratio of 22.9%, Mississippi also ranks in the top ten for overall affordability. So the Magnolia State is a strong contender, no matter which metric you prefer.

      Mississippi has mountains and coastline, which means there’s a lot to do if you like the outdoors. Jackson, Mississippi’s largest city, is also a professional and cultural hub that food lovers, music enthusiasts, and young professionals will appreciate. 

      3. Arkansas

      Median home value: $177,226

      Estimated mortgage payment: $1,242

      Arkansas has low median home values. However, the overall cost of living in Arkansas is 9% lower than the national average, when expenses such as utilities and transportation are taken into account.

      Arkansas has some chronically underrated universities, which are much better than many give them credit for. The weather is also relatively mild all year round, which allows access to outdoor activities during all four seasons. 

      4. Oklahoma

      Median home value: $183,734

      Estimated mortgage payment: $1,287

      Oklahoma is not only one of the most affordable states to buy a house, it also has multiple bustling city centers, which is excellent for those who value work and educational opportunities.

      Oklahoma has incredible food culture, having combined cooking styles from Tennessee, Kansas, and Texas to create plenty of unique cultural cuisine. Additionally, there are lots of lakes and historical architecture for those who like to enjoy the scenery.

      5. Louisiana

      Median home value: $186,795

      Estimated mortgage payment: $1,309

      Louisiana is not only one of the most affordable states to buy a house, it also has some of the most unique cities in the United States — New Orleans and Baton Rouge — and incredible culture and entertainment.

      Additionally, Louisiana has miles of coastline and sports teams in almost every league, at every level, from college to professional. It’s a great state for anyone who values professional opportunity and extracurricular activities.

      6. Kentucky

      Median home value: $188,241

      Estimated mortgage payment: $1,319

      Kentucky has affordable housing and an overall living cost that’s almost 12% lower than the national average. To complement the low cost of living, Kentucky has a robust manufacturing job market, including three major automobile manufacturing facilities.

      Kentucky also offers plenty of rivers and mountains for outdoor recreationalists and a blend of large cities and small towns. So there are communities to fit everyone’s preference.

      7. Iowa

      Median home value: $193,341

      Estimated mortgage payment: $1,355

      Although Iowa is just seventh in terms of median home value, the state has the second best income-to-mortgage ratio at 20.5%. Therefore, homes in Iowa can be quite affordable when compared to the median income in the state.

      Iowa likely achieves its impressive income-to-mortgage ratio thanks to ample job opportunities in advanced manufacturing, biosciences, finance, and agricultural engineering. Iowa’s population is also well distributed among several moderately sized cities, resulting in an average commute time of under 20 minutes, which makes it easy to work in Iowa.

      8. Ohio

      Median home value: $201,688

      Estimated mortgage payment: $1,411

      Ohio is home to the 14th largest city in the United States, Columbus, and one of the largest colleges in the nation, Ohio State University.

      Cleveland and Cincinnati are also major economic hubs with professional football teams. In addition to Ohio’s economic and educational opportunities, Ohio boasts the ninth lowest overall cost of living in the country.

      It’s true that temperatures during the summer and winter can be a bit aggressive, but the state is renowned for its lovely spring and fall seasons.

      9. Kansas

      Median home value: $203,527

      Estimated mortgage payment: $1,424

      Although the median home value in Kansas is relatively low, it’s possible to find houses for notably less than this amount in the rural areas of Kansas. 

      However, there are larger cities in Kansas, notably Kansas City, if rural life isn’t for you. Also, Kansas is within reach of the Rocky Mountains in Colorado, which is handy for snow sports lovers.

      10. Alabama

      Median home value: $207,145

      Estimated mortgage payment: $1,449

      Alabama attracts many people with the promise of great weather, excellent education opportunities, and comfort food.

      The yearly average temperature in Alabama is 64 degrees, with many cities that get pleasant weather throughout most of the year. Alabama also has a handful of well-known and well-regarded universities, and college sports get as much community support as professional sports. Comfort food speaks for itself.

      11. Michigan

      Median home value: $214,711

      Estimated mortgage payment: $1,502

      Admittedly, winters in Michigan are very cold. However, the rest of the year is great for exploring the sandy beaches of the Great Lakes and the nearly 10 million acres of forested public land.

      Also, Detroit isn’t the only option for those who need career opportunities. There are several cities in Michigan with strong opportunities in multiple industries, and the overall cost of living is 11% lower than the national average.

      12. Indiana

      Median home value: $215,818

      Estimated mortgage payment: $1,510

      Indiana is affordable and growing. The overall average cost of living is 18% lower than the national average, making it one of the cheapest states to live in the U.S., and Indiana boasts the lowest property taxes in the nation.

      Additionally, the healthcare, logistics, manufacturing, and technology industries are rapidly growing, which presents plenty of professional opportunities for new Indiana residents. Indiana is also known for its four distinct seasons throughout the year, with exceptionally beautiful spring and fall times.

      13. Missouri

      Median home value: $220,605

      Estimated mortgage payment: $1,543

      Missouri is the only state with two federal reserve banks. As such, the state has a booming financial sector. However, Missouri also has strong aerospace, biotechnology, and agriculture industries. All of this likely contributes to Missouri consistently posting unemployment rates lower than the national average.

      Missouri has tons of outdoor recreation opportunities in the state’s Ozark Mountains. Missouri is also centrally located, which offers plenty of visitation to the attractions of multiple neighboring states.

      14. Nebraska

      Median home value: $234,304

      Estimated mortgage payment: $1,639

      Nebraska may not seem like a booming place to live. However, several fortune 500 companies are headquartered in Nebraska, and the state usually has unemployment rates lower than the national average.

      Additionally, Nebraska is the only state that ranks in the top 15 cheapest states to buy a house and ranks in the top 10 for education. Nebraska also has plenty of options for living in both urban and rural areas, so there’s something for everyone.

      15. Illinois

      Median home value: $234,951

      Estimated mortgage payment: $1,643

      Chicago, the flagship city in Illinois, is the third largest city in the United States. It’s a great place for anyone looking for professional opportunities.

      If big city life isn’t for you, the rest of the state is largely populated by small and medium sized cities with plenty of small-town appeal. Additionally, many businesses that were once located in Chicago have expanded or relocated to the outlying communities to give employees easier commutes and more housing options.

      Therefore there’s plenty of opportunity and options for living in Illinois, regardless of whether or not you want to live in Chicago.

      Home affordability just got easier with Stairs

      With Stairs, you can easily find all of the down payment assistance programs you qualify for, compare your options in one place, and connect to a trusted lender familiar with your chosen program. Learn more about your down payment assistance options.

      Cheapest states to live in the U.S.

      Knowing which states have the lowest median home price is useful, but it can be even more useful to know which states have the lowest income-to-mortgage ratios. 

      Income-to-mortgage ratio shows you what percentage of your monthly income would go to your mortgage payment, if you were paid the median salary in the state and bought a home at the median home price.

      It’s best to use this as a reference, and do a bit of math based on your own income and your anticipated mortgage interest rate.

      State
      Median
      Home Value
      Estimated
      Mortgage Payment
      Monthly
      Median Income
      Income-to-Mortgage
      Ratio
      West Virginia$144,330$1,011$5,02520.1%
      Iowa$193,341$1,355$6,62520.5%
      Kansas$203,527$1,424$6,45022.1%
      North Dakota$238,509$1,668$7,50822.2%
      Ohio$201,688$1,411$6,27522.5%

      West Virginia

      West Virginia ranks #1 as the cheapest state to live in the US based on income-to-mortgage ratio.

      • Median home value: $144,330
      • Estimated mortgage payment: $1,011
      • Median Monthly Income: $5,025
      • Income-to-Mortgage Ratio: 20.1%

      Iowa

      Iowa comes in at #2 for the cheapest states to live in the US based on income-to-mortgage ratio.

      • Median home value: $193,341
      • Estimated mortgage payment: $1,355
      • Median Monthly Income: $6,625
      • Income-to-Mortgage Ratio: 20.5%

      Kansas

      Weighing in at #3 for overall affordability is Kansas.

      • Median home value: $203,527
      • Estimated mortgage payment: $1,424
      • Median Monthly Income: $6,450
      • Income-to-Mortgage Ratio: 22.1%

      North Dakota

      North Dakota is #4 on our list of cheapest states to buy a house in the US.

      • Median home value: $238,509
      • Estimated mortgage payment: $1,668
      • Median Monthly Income: $7,508
      • Income-to-Mortgage Ratio: 22.2%

      Ohio

      Last but certainly not least, Ohio is the 5th cheapest state to live in, based on income-to-mortgage ratio.

      • Median home value: $201,688
      • Estimated mortgage payment: $1,411
      • Median Monthly Income: $6,275
      • Income-to-Mortgage Ratio: 22.5%

      The housing market in 2023: Understanding your real estate options

      The housing market is as fluid as any other market, it just shifts slowly under normal circumstances. Unless there’s some sort of intervening event, the current cheapest states to live will likely remain the cheapest for most or all of 2023.

      Yes, mortgage interest rates will change throughout the year. However, interest rates impact all states about the same. If you’re considering moving to a less expensive state, and interest rates go up before you’re ready to move, whatever state you were considering will still be a less expensive place to live.

      Home prices can also change, but the median home price in a state tends to move relatively slowly. If you’re considering relocating to a state to lower your housing costs, it’s better to keep an eye on the home prices in the specific area of the state to which you plan on moving.

      Home prices in a specific neighborhood or city usually change more quickly than the average home value across the entire state. So focusing your pricing research on a narrow area will be more useful for planning.

      If you’ve chosen to move to a cheaper state, that state will likely be a viable option for the rest of the year, unless things go crazy. Rest easy, you’ve got time to prepare.

      Start your move to a more affordable state sooner than you think

      Whether you’re looking to move to a less expensive state or you already live in an affordable area and want to buy a home nearby, getting a down payment together is often the biggest hurdle in buying a house.

      Stairs Financial is here to help.

      Stairs connects you to qualified lenders who work with all the down payment assistance programs you might qualify for, then lets you compare your options side-by-side.

      With Stairs, you can easily find out exactly which down payment assistance programs are available to you, so you can make a more informed decision.

      Learn more.

      Find up to $15,000 towards a home 🏠

      Compare local down payment assistance and find a mortgage, fast.

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