The Cheapest States to Live In: What the Latest Official Price Data Shows

Arkansas is the cheapest US state to live in, according to the latest official price data, followed closely by Mississippi, Iowa and Oklahoma. The US Bureau of Economic Analysis (BEA) measures how much more or less everyday goods, services and rents cost in each state compared with the national average. Its 2024 figures, published in February 2026, show prices in the cheapest states are about 13% below average, while California, Hawaii and New Jersey are roughly 9% to 11% above it. This guide explains the rankings, what drives them and what else to weigh before you move.

What Are the Cheapest States to Live In?

The BEA’s regional price parities (RPPs) set the US average at 100. A state with an RPP of 87 has prices about 13% lower than the national average. For 2024, the lowest all-items RPPs were:

• 1. Arkansas: 86.9
• 2. Mississippi: 87.0
• 3=. Iowa: 87.8
• 3=. Oklahoma: 87.8

These four states sit in the South and Midwest, where housing has historically been cheaper and wages lower. Other states that commonly appear near the bottom of the BEA table include Alabama, West Virginia, Kansas, Kentucky, South Dakota and Missouri, but the exact order shifts slightly from year to year, so it is worth checking the BEA’s interactive tables for the latest values.

What Are the Most Expensive States?

At the other end of the scale, the highest RPPs in 2024 were:

• California: 110.7
• Hawaii: 110.0
• New Jersey: 108.8
• District of Columbia (not a state): 109.9

The gap between Arkansas and California is about 27%. Put another way, a basket of goods, services and rent that costs $100,000 in California would cost roughly $78,500 in Arkansas, based on the ratio of their RPPs.

Which State Is Cheapest for Renters?

Rent is a separate story from overall prices. In the BEA’s 2024 rent index, West Virginia had the lowest housing rents of any state, at 54.2, meaning rents there are roughly half the national average. California’s rent index of 154.3 is nearly three times higher, and the District of Columbia’s was 155.0. West Virginia’s all-items figure is less extreme than its rent figure, because goods such as cars, food and electronics cost much the same as elsewhere.

For renters, that makes the rent index the more useful guide. If housing is your largest single bill, as it is for most US households, a state with a modest all-items advantage but very cheap rents may leave you better off than one that ranks higher overall. Homebuyers should look instead at local house prices, property tax rates and insurance premiums, which the RPP rent index does not capture directly.

Why Do Prices Vary So Much Between States?

The BEA notes that housing rents are the main driver of differences in price levels. Its rent index for 2024 ranged from 154.3 in California to 54.2 in West Virginia, almost a threefold gap. Prices for goods such as food, clothing and cars vary much less, because they are sold in national markets.

Other factors include:

• Local wages: higher-paid labour pushes up the cost of services, from haircuts to childcare
• Land and building costs: coastal and mountain states have less buildable land and stricter planning rules
• Energy: electricity and heating costs vary with climate and local power sources
• Insurance: home and car insurance premiums are rising fastest in states exposed to hurricanes, wildfires and severe storms, such as Florida, Louisiana and California

Does a Cheaper State Mean You Will Be Better Off?

Not necessarily. Lower prices often go hand in hand with lower wages, so what matters is real income: your earnings adjusted for local prices. If you can keep a salary set in a high-cost area, for example through remote work, moving to a low-cost state can increase your spending power substantially. If you will be earning a local wage, the gain may be smaller.

Our guide to comparing the cost of living between cities, states and countries explains how to use RPPs alongside salary data to make a like-for-like comparison.

Prices also differ within states. Major metro areas are usually more expensive than rural counties, so living in Little Rock, Des Moines or Oklahoma City will cost more than the state average suggests, while small towns may cost less. The BEA publishes separate RPPs for metropolitan areas.

How Do State Taxes Change the Picture?

RPPs measure prices, not taxes, so you should factor taxes in separately. Nine states do not tax wage income: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington does, however, tax certain large capital gains.

States without income tax often make up revenue in other ways, such as higher sales taxes or property taxes. Tennessee and Washington, for example, have some of the highest combined state and local sales tax rates in the country, while Texas has relatively high property taxes. Of the cheapest states by RPP, South Dakota is the only one with no income tax on wages; Arkansas, Mississippi, Iowa and Oklahoma have all cut their income tax rates in recent years, and Mississippi is phasing its rate down further.

What Else Should I Consider Before Moving?

Cost of living is only one part of a good move. Before deciding, compare:

• Job market: how easily you could find work locally if a remote job ended
• Healthcare access: the distance to hospitals and specialists, particularly in rural areas
• Schools: if you have children, check local school ratings and spending
• Climate and disaster risk: which affects insurance costs and comfort
• Transport: many low-cost areas require a car, which adds fuel, insurance and maintenance
• Family and community: the hardest costs to price but often the most important

A practical tip is to rent before you buy. Spending six to twelve months in a new area lets you test the climate, commute and community before committing to a mortgage.

How Can I Estimate My Own Budget in a New State?

Start with your current monthly spending and adjust each category:

• Housing: use local rental listings or the BEA rent index rather than the all-items figure, since rent differences are much larger
• Transport and insurance: get quotes for your car and home or renters insurance at the new address
• Taxes: use the new state’s income tax brackets and local sales tax rate
• Utilities: check average electricity and gas bills from local providers
• Everything else: scale by the ratio of the two states’ RPPs

Then compare the result with your expected after-tax income. If the move improves your surplus each month, use the savings to build up an emergency fund before you relocate, because moving itself typically costs several thousand dollars once deposits, removal costs and travel are included.

When Will New Figures Be Published?

The BEA plans to publish regional price parities for 2025 on 10 December 2026. The rankings change slowly, so Arkansas, Mississippi, Iowa and Oklahoma are likely to remain among the cheapest states, but the new release will be the best source for anyone planning a move in 2027.

If you are weighing a bigger move, such as leaving the US altogether, our guide to whether moving abroad is worth it covers costs, visas and taxes.

Featured image: Little Rock, Arkansas skyline, by Quintin Soloviev / Wikimedia Commons, CC BY 4.0. Cropped, colour-graded and combined with MediaPavilion branding.

Sources

• US Bureau of Economic Analysis — Regional Price Parities by State and Metro Area (February 2026).
• US Bureau of Economic Analysis — Real Personal Consumption Expenditures by State and Real Personal Income by State, 2024 (19 February 2026).
• Tax Foundation — State Individual Income Tax Rates and Brackets (2026).