With the national median sale price of homes in the U.S hovering around $358,500, a 9.2% increase from last year, the cost of houses varies from state to state. In this article, we’ll look at some of the cheapest states to buy a house in the U.S in 2023 using income data and home prices.
12 Cheapest States to Buy a House in 2023
- West Virginia
1. West Virginia: $147,000
Average effective property tax rate: 0.57%
West Virginia is the cheapest state to buy a house in as it has the lowest median list prices for homes as well as the cheapest sales price per square foot. Property taxes in the state are also some of the lowest in America. Popularly known as the Mountain State, West Virginia is known for its low cost of living and breathtaking natural scenery. With a state population of around 1.3 million residents, West Virginia is an excellent home buying location if you’re a lover of nature or looking to start a career in the coal industry.
2. Mississippi: $173,650
Average effective property tax rate: 0.78%
The second cheapest state to buy a house is Mississippi. The state is known for its lenient building regulations and a growing number of sustainable off-grid homes. With around 3 million residents, Mississippi is one of the most affordable states to buy a house. The cost of living in Mississippi is 15% lower than the national average. And with around 35,000 farms covering the state’s 10.4 million acres, agriculture is the top industry.
3. Arkansas: $190,500
Average effective property tax rate: 0.61%
Arkansas is another of the cheapest states to buy a house in 2023. It takes just 12% of the median household income to buy a house in the state. Arkansas is famous for its hot springs, acres of lakes, and booming poultry industry. The state has over 3 million people, and besides affordable real estate, offers residents a friendly atmosphere and a warm climate.
4. Oklahoma: $193,700
Average effective property tax rate: 0.89%
Known for its deep Native American history, Oklahoma is one of the cheapest states to buy a house. If you’re a fan of football, mountains, and outdoor scenery, then Oklahoma may be the best place for you. And with a population of about 4 million people, the cost of living in Oklahoma is about 15% lower than the national average.
5. Iowa: $200,850
Average effective property tax rate: 1.53%
Nicknamed the Hawkeye State, Iowa is known as the United States' leading producer of corn. Also famous for its pork production, there are about 12 million pigs in the state and just 3 million people – meaning the hogs outnumber the humans 4 to 1. Housing in Iowa is quite affordable, and the median listing price is just $200,850. Their property taxes are relatively high at about 1.53%. But the overall cost of living is about 16% cheaper than the US as a whole, making it affordable for most residents.
6. Kentucky: $207,600
Average effective property tax rate: 0.85%
Also referred to as the Bluegrass State by its residents, Kentucky is known for its horse racing, tobacco farming, fried chicken, and coal mining. With around 4.5 million residents, some of the biggest cities in the state are Louisville, Lexington, and Frankfort. If you’re looking for a state that offers both urban and rural appeal, then Kentucky should be at the top of your home buying list.
7. Kansas: $215,770
Average effective property tax rate: 1.37%
Kansas is a landlocked state located in the heart of the Midwest. The number one state for wheat production, Kansas is known for its wide-open plains and prairies. All that open land makes housing quite affordable, and it features a median listing price of $215,770. With a population of just under 3 million, Kansas features several major cities, including Wichita, Topeka, and Kansas City (at least the portion within the state lines). Agriculture, meatpacking, and dairy are the primary industries in Kansas, and the state produces about 20% of all wheat grown in the US.
8. Alabama: $218,420
Average effective property tax rate: 0.40%
Alabama is also one of the cheapest states to buy a house in 2023. Known as the Cotton State, Alabama’s cost of living is about 15% lower than the national average. And with a population of just over 4.9 million, Alabama is the biggest employer in the healthcare industry.
9. Ohio: $218,975
Average effective property tax rate: 1.48%
Known as the Buckeye State or the birthplace of aviation, Ohio is the gateway to the Midwest. It has five cities with over 150,000 and features ample job opportunities in financial services, manufacturing, and agriculture. Housing in Ohio is much cheaper than in nearby states like Pennsylvania and New York. However, Ohio also features higher property taxes than many states on this list. But it's still considerably cheaper than the national average, and housing per square foot is among the most affordable in the country.
10. Indiana: $228,175
Average effective property tax rate: 0.84%
One of the leading Midwest states, Indiana is home to the highest number of the nation’s interstate highway systems per square mile than any other state in the nation. Home to around 7 million residents, Indiana boasts booming manufacturing, agriculture, and healthcare industries. Currently, the cost of living in Indiana is 10% lower than the national average.
11. Missouri: $237,200
Average effective property tax rate: 0.95%
Known for its blues and jazz industry and its world-famous barbecue. Missouri is one of the most affordable states to buy a house in the U.S. One of the upsides to buying a house in Missouri is the high appreciation rates and affordable property tax rates.
12. Michigan: $237,650
Average effective property tax rate: 1.64%
Surrounded by the Great Lakes, Michigan features the longest freshwater coastline in the US at 3,288 miles long. Split into two sections by Lake Michigan, the northern landmass known as the upper peninsula is almost entirely covered by forestland. Michigan features a diverse economy dominated by the automobile industry in the early 20th century. Today, it's one of the cheapest places in the country in terms of housing and features a median list price of $237,650 and a price per square foot of just $132.
Cheapest State to Buy a House Bottom Line
It is no longer news that every state comes with its home affordability rate. However, before purchasing a home in any state, you should do adequate research on the average mortgage rates, the economy, and other societal factors. Speak to local real estate agents about the ease of buying a home in your desired state and the various hoops you may face.