The Cheapest States to Buy a House in the U.S.

Home Affordability by State

Whether you’re a first-time homebuyer or seeking a more affordable lifestyle, many homebuyers are looking beyond high-cost markets to find areas where their money goes further. In this article, we’ll explore factors that affect home affordability, how it’s calculated, and which states frequently rank among the most affordable to buy a house.

What Makes Housing Affordable?

Home affordability in the United States has become a growing concern, especially as real estate prices have surged in many parts of the country over the last couple decades. The national median home price currently hovers around $430,000, making it increasingly difficult for many Americans to own a home. In fact, according to the U.S. Department of the Treasury, from 2000 – 2020 more than 90% of Americans lived in counties where median rent and housing prices grew faster than median incomes. This imbalance means that a larger portion of income is often required to cover housing costs compared to previous generations.

Factors like limited housing, rising interest rates, and increased demand have all contributed to climbing home prices. Housing demand has particularly grown in suburban areas in the Sun Belt, a region comprised of southern and southwestern states. This is because the economy in this part of the U.S. continues to rapidly expand, causing people to relocate from other areas and housing prices in places that were previously more affordable and less densely populated. Additionally, major shifts toward remote work both during and after the COVID-19 pandemic in 2020 contributed to soaring home prices, according to the Bureau of Labor Statistics. The study showed that housing prices rose 24% between November 2019 and November 2021, with remote work a catalyst for over half of that increase.

When deciding where to live, many Americans are now weighing not only job opportunities or lifestyle preferences, but also the overall cost of living and long-term affordability. States with lower median home prices, lower property taxes, and less strict zoning laws tend to offer more budget-friendly housing options. While remote work has contributed to rising housing prices, it gives many homebuyers the chance to live in more affordable markets due to its location flexibility. Understanding these trends is essential for anyone navigating the current housing landscape.

Factors Impacting Home Affordability by Location

There are several factors that can affect a particular location’s home affordability:

• Median home prices: The median price of a home varies significantly between urban, suburban, and rural areas. Additionally, coastal cities (such as New York City or Los Angeles) tend to have much higher prices.
• Local income levels: Housing affordability in a particular location is relative to the local average or median household income. Higher home prices may still be considered “affordable” if local wages are also high.
• Property taxes: Rates for property taxes differ by state, county, and local municipality. High property taxes can significantly affect overall monthly housing costs.
• Cost of living: The cost of living for a particular area is the amount of money needed to maintain a certain standard of living and cover expenses like housing, utilities, groceries, healthcare, transportation, and more. Places with a higher cost of living may make homeownership less sustainable.
• Housing supply and demand: When the inventory of homes in a certain area is low, it can increase competition and raise prices. Zoning laws, building restrictions, and a growing population are all among factors that can increase demand.
• Job market and economic opportunities: Areas with more jobs attract more people, driving up the demand for housing. Tech hubs or fast-growing cities and suburbs often see spikes in home prices.
• State and local incentives: Government programs, tax breaks, and grants can improve home affordability in certain areas.
• Transportation and infrastructure: Proximity to public transit or major highways can raise home prices. Walkability and access to amenities may also play a role.
• School district quality: Homes in top-rated school districts often come with a premium price. This can be a major factor for families with school-age children.
• Interest rates and lending conditions: Interest rates can affect the cost of monthly mortgage payments. Local lending practices and credit access can also affect the accessibility of homeownership.

How Are the Cheapest States for Homeownership Chosen?

Real estate agents, mortgage lenders, financial experts, and others in the homebuying industry often use their own metrics to determine which states are “the cheapest.” As a result, lists showcasing the cheapest states to buy a house can vary.

Some reports rank states based on weighted calculations that account for factors like housing density, while others may use a custom weighted composite formula that incorporates multiple data points.

Example: One model might assign 40% to housing affordability, 25% to cost of living, 20% to median household income, and 15% to taxes. In this case, housing affordability carries the most weight—accounting for 40% of the final score—when determining how “cheap” a state is to live in.

Understanding how these calculations are made can help you better understand home affordability state rankings and get a more comprehensive picture of what housing costs may look like for you based on location. For this article, Freedom Mortgage focused on using recent data directly from the National Association of REALTORS® (NAR) to determine which states rank the best for home affordability.

Top States for Home Affordability

NAR monitors housing affordability across the United States, releasing updated data to demonstrate how the housing market is changing.

Home affordability looks at how easily a household can buy a home based on house prices, income levels, and mortgage interest rates. According to NAR’s 2025 Housing Affordability & Supply report, households earning $75,000 a year can afford only about 21.2% of listed homes (as of March 2025). Here’s a closer look at recent home affordability by state:

Keep in mind: The NAR report focuses on income-specific home affordability—examining what households can afford across a range of income levels, not on where homes are priced the lowest. So, while some states, like Mississippi, may be recognized for having the cheapest homes, they may not be the most affordable based on the typical household income for the state.

Across the U.S., several regions offer some of the most affordable housing options for buyers. In particular, the southern and midwestern states are often known for having a combination of lower property prices and a slower pace of life, making them attractive to first-time buyers and families alike. Many of these states also feature stable job markets and lower overall living expenses, which keeps housing costs manageable for many residents.

Determining Home Affordability in Your State

Whether you’re looking to buy a home in your current state or are considering a move, there are tools to help you determine housing affordability:

1. U.S. Federal Housing Finance (FHFA) House Price Index (HPI)®: View changes in home prices across 50 states and over 400 cities.
2. NAR Housing Affordability Index (HAI): View typical households can qualify for a mortgage based on recent house prices and income levels.
3. Freedom Mortgage’s Home Affordability Calculator: Estimate how much you may be able to afford when buying a home based on your income and other personal details.

If you’re looking to buy a new home, there’s a wide range of affordable mortgage options to choose from. Whether you’re looking for competitive interest rates, no down payment, or to utilize VA benefits, Freedom Mortgage has the expertise to find the best home loans to save you the most money.

Final Thoughts: The Most Affordable States to Buy a House

Buying a home in an affordable state can open the door to greater financial freedom and long-term stability. With lower housing and living costs and a variety of employment opportunities, there are many places where homeownership is more easily attainable, and Freedom Mortgage can help you find them. If you’re ready to take the next step toward becoming a homeowner, get started with us today.