Research Report
Most Affordable States 2026
Last updated: June 2026 — 4 data sources
Key Takeaways
- Ohio offers the lowest cost of living at index 88, with housing costs 22% below the national average.
- Affordable states generally have lower salaries, so evaluate purchasing power not just nominal income.
- Housing is the biggest factor in cost differences between states.
- Use our cost of living pages and salary vs. cost of living pages for detailed state comparisons.
Key Findings
- Ohio has the lowest cost of living index at 88, with housing costs 22% below the national average.
- Midwestern and Southern states dominate the affordable living rankings.
- The most affordable states have housing cost indices below 90, significantly under the national average.
- Property tax rates tend to be higher in affordable states, partially offsetting lower home prices.
- Lower-cost states generally have lower average salaries, so purchasing power analysis is essential.
National Cost of Living Overview 2026
The cost of living varies widely across the United States, from a low of 88 in Ohio to a high of 142 in California (US average = 100). This significant dispersion means that a salary that provides a comfortable lifestyle in one state may be insufficient in another.
Housing is the primary driver of cost differences between states. In the most affordable states, housing costs are 10-22% below the national average. Other categories (utilities, food, transportation, healthcare) also vary but typically within a narrower range.
Housing Affordability by State
Housing is typically the largest household expense, and it varies dramatically by state. In Ohio, the median home value is $200,000 with a housing cost index of 78, making it the most affordable for housing among ranked states. In contrast, California's median home value of $750,000 and housing index of 180 make it the least affordable.
Property tax rates also vary significantly. Illinois has the highest effective property tax rate at 2.07%, while Hawaii and Alabama have the lowest at approximately 0.30%. Our mortgage calculator can help estimate total monthly housing costs including principal, interest, taxes, and insurance.
Salary vs. Cost of Living Tradeoffs
The most affordable states generally have lower average salaries, creating a tradeoff for workers. For example, Ohio's average salary of $55,000 with a cost of living index of 88 provides an effective purchasing power equivalent to approximately $62,500 in an average-cost state. This means the real value of a salary in an affordable state can exceed that of a higher nominal salary in an expensive state.
Our salary vs. cost of living pages provide state-by-state analyses of these tradeoffs.
Methodology
States are ranked by overall cost of living index (US average = 100) from the Bureau of Economic Analysis Regional Price Parities and the Council for Community and Economic Research Cost of Living Index. Category breakdowns include housing, utilities, food, transportation, and healthcare. Additional context includes median home values from Zillow and state income tax rates from state revenue departments.
Sources
- US Bureau of Economic Analysis - Regional Price Parities
- Council for Community and Economic Research - Cost of Living Index
- Zillow Home Value Index
- US Census Bureau - American Community Survey
Frequently Asked Questions
Which state has the lowest cost of living?
Ohio has the lowest cost of living index at 88 among our ranked states. Housing costs at index 78 are the primary driver. Other affordable states include Texas (92), Illinois (92), Georgia (94), and Michigan (89).
Is it better to live in a low-cost state?
Low-cost states offer greater purchasing power for your income, but often have fewer high-paying job opportunities and different lifestyle options. The best choice depends on your career, income, and preferences. Our salary vs. cost of living tool helps evaluate these tradeoffs.
Related Pages
Official Sources
New Zealand calculators use data from the following official government agencies:
- Inland Revenue (IRD) — Income tax brackets, KiwiSaver rules, and ACC levies.
- Stats NZ — Wage data, employment statistics, and cost of living indices.
- Reserve Bank of New Zealand (RBNZ) — Official cash rate and monetary policy data.
Methodology
Our New Zealand calculators follow tax brackets, KiwiSaver contribution rates, and ACC levies published by Inland Revenue (IRD). Economic data is sourced from Stats NZ. Mortgage calculations use RBNZ official cash rate and market averages. All figures are for educational purposes.
Data Sources
All tax brackets, contribution rates, and economic data used in our calculators are sourced from the official government publications listed above. Rates are updated at least annually to reflect the latest tax year and regulatory changes. Users should verify critical figures with official sources or qualified professionals.
Last updated: June 2026. Information may change; always verify with official sources.
Last Updated: June 2026 — Reviewed Against Official Sources