The Top 10 States With the Lowest Cost of Living—Where Your Dollar Stretches Furthest
Although runaway inflation rates seem to finally be somewhat under control, Americans are still feeling walloped with high prices every time they open their wallet—at the grocery store, gas pump, to pay for housing, and beyond.
If you’re looking for ways your budget can stretch a little further, research suggests that where you live can make a big difference. That’s because the cost of living varies widely state to state.
In other words, the same $100 you use to buy groceries in one area will buy you five bagfuls, whereas it may only fill three bags in more expensive areas.
To find which states have the highest and lowest cost of living, the research team at Realtor.com® examined the latest regional price parities (RPPs) data by the Bureau of Economic Analysis, which measures the differences in price levels across states and metropolitan areas and are expressed as a percentage of the overall national price level. Another way to think about it is how much $100 will buy in goods, housing, and utilities in certain states versus others.
It’s probably no surprise that the most expensive state in the union is California, where you’ll have to spend $112.50 to buy $100 worth of goods. Other states on the most expensive list? Hawaii, at $110.80; Washington, at $109.80; and Massachusetts, at $109.40.
But the least expensive state? Now, that’s not so obvious.
Where the living is easiest
The state with the lowest cost of living is none other than Arkansas, the “Natural State,” where you only pay $86.60 for $100 worth of goods.
As it turns out, the top 10 states with the lowest cost of living is dominated by Southern states.
“The three states with the lowest cost of living boast price levels more than 12% below the national level,” says Realtor.com senior economic data analyst Hannah Jones. “That is to say, on average, the cost of goods and services is more than 12% lower than the national level in these states.”
The South also doesn’t disappoint when it comes to residential real estate prices.
“Generally, these states are also among the least expensive in terms of housing,” continues Jones. “As the trappings of modern life feel increasingly expensive to many consumers, buyers could see their dollar go further in these states.”
So if you’re considering a move—preferably to a place where you can find a nice home at a reasonable price and groceries, gas, and utilities that are well within your budget—you’ll want to take a look at the top 10 states with the lowest cost of living.
Top 10 states with the lowest cost of living
What residents pay for $100 of necessities: $86.60
Median home price: $299,000
(Realtor.com)
What residents pay for $100 of necessities: $87.30
Median home price: $298,000
(Realtor.com)
What residents pay for $100 of necessities: $87.80
Median home price: $330,000
(Realtor.com)
What residents pay for $100 of necessities: $88.00
Median home price: $386,250
(Realtor.com)
What residents pay for $100 of necessities: $88.40
Median home price: $299,800
(Realtor.com)
What residents pay for $100 of necessities: $88.70
Median home price: $369,820
What residents pay for $100 of necessities: $88.80
Median home price: $299,000
What residents pay for $100 of necessities: $89.20
Median home price: $240,000
What residents pay for $100 of necessities: $89.40
Median home price: $305,000
What residents pay for $100 of necessities: $89.80
Median home price: $349,950