10 cheapest states to buy a house in 2025

When choosing a place to unpack and stay for a while, affordability is at the top of many home buyers' minds. We analyze the market each year to find the cheapest states to buy a house. Whether drawing from a need to find more affordable real estate or getting the biggest bang for their buck, today’s buyers are looking to buy homes with strict budgets. And one of the first steps to take in finding affordable housing is learning about the factors that go into buying and owning a home.

Key Takeaways:

• West Virginia is the cheapest state in which to buy a house in 2025.
• Alabama has the lowest property tax rate of the top 10 cheapest states to buy a home.
• All top 10 states have median home prices under $300,000.

The U.S. housing market at a glance

Home prices are no longer accelerating upward like during the 2021 – 2022 home buying spree, but they’re still elevated.  Affordability is a persistent issue, with the monthly housing affordability index from the National Association of REALTORS^® climbing back up month-on-month since November 2024. All this makes finding states with the cheapest houses more important than ever.

What makes a home affordable?

As of May 2025, the state of the housing market is a challenging one for many home buyers, a trend that’s expected to continue for several reasons. Interest rates are nearly 7% , and home prices remain elevated, especially compared to a few years ago. Of course, there are some places where housing prices are less inflated and mortgage payments take up less of your income. You can use our affordability calculator to estimate how much you can afford to spend on a home.

Many decisions go into buying a house, and deciding where to live is one of them. Buyers using affordability as a factor in choosing a state to live in should consider home prices, property taxes, and homeowners insurance. Our list of the cheapest states to buy a home uses the following metrics:

• Median home price
• Median sale price
• Property tax rates and dollar amounts
• Cost of living
• Housing price index movement
• Average annual homeowners insurance cost
• House price movement index

It’s important to keep in mind, as with any affordable area, that while the cost of living and home prices are lower than other areas of the country, so are the median household incomes.

The 10 cheapest states to buy a house

Those who are more budget-focused in their home shopping efforts may want to consider looking in the following states.

1. West Virginia
2. Arkansas
3. Mississippi
4. Alabama
5. Louisiana
6. Indiana
7. Kentucky
8. Michigan
9. Missouri
10. Ohio

1. West Virginia

• Median home price: $225,506
• Cost of living index: 84.1
• Median household income: $57,917
• Median monthly mortgage payment: $871

West Virginia is dotted with quaint villages, active college towns, historical settings, and national parks with radiant fall foliage. No matter where in the Mountain State you choose to live, you’ll likely find an affordable home. West Virginia has the lowest median home price of any state at $225,506. The median annual property tax bill is $835, with the effective tax rate at 0.54%, which is very much on the low side.

West Virginia’s median household income is low, at $57,917 per year. But thanks to low home prices, its monthly income-to-mortgage ratio is 5.54, which is also low in our study. See what type of property you can get within your budget by checking out the homes for sale in West Virginia.

2. Arkansas

• Median home price: $239,654
• Cost of living index: 88.7
• Median household income: $58,773
• Median monthly mortgage payment: $821

From bustling metro areas like Little Rock and Fayetteville to quiet Ozark Mountain towns, Arkansas has affordable areas for many lifestyles and budgets. Homes are very affordable, with Arkansas having one of the lowest median home prices and monthly mortgage payments in the study. Additionally, its quarter-over-quarter home price index movement was -0.54%, making Arkansas one of the few states where prices dropped.

Low home values and an effective property tax rate of 0.57% make for a low annual tax bill, at $1,003. If you’re interested in one of the cheapest states to buy a house, check out homes for sale in Arkansas.

3. Mississippi

• Median home price: $284,090
• Cost of living index: 88
• Median household income: $62,027
• Median monthly mortgage payment: $933

When it comes to property taxes by state, Alabama has the second-lowest rate on this list – 0.38% – and the lowest property taxes paid – $738. The housing cost of living index is 30% lower than the U.S. overall. The monthly median income in Alabama is 5½ times the monthly mortgage payment, which is great for your budget. Interested in settling down in the Yellowhammer State? Check out homes for sale in Alabama.

5. Louisiana

• Median home price: $249,857
• Cost of living index: 92.2
• Median household income: $60,023
• Median monthly mortgage payment: $956

Louisiana is a vibrant state with a cultural heritage that includes French Caribbean architecture, Cajun cuisine, Mardi Gras celebrations, and more than 400 free festivals a year, to the rich history of jazz and the laid-back bayous, to countless swamps and marshes perfect for wildlife viewing and fishing. And it’s also one of the cheapest states to buy a house.

No matter where your Louisiana home search takes you, you’ll find a lower cost of living – almost 8% less than the U.S. overall – and affordable home prices: The median home price is $249,857, while the median monthly mortgage payment is $956. There’s also a bonus for homeowners in Louisiana. If you’re ready to move to the Pelican State, check out houses for sale in Louisiana.

6. Indiana

• Median home price: $255,311
• Cost of living index: 90.5
• Median household income: $70,051
• Median monthly mortgage payment: $1,129

This is the second year in a row Indiana has made our list of cheapest states to buy a house and is the top Midwestern state for affordability in 2025. At $255,311, its median home price is more affordable than many states in the Midwest. The cost of living index here is about 10% less than the country overall. If you’re interested in buying a house in the Hoosier State, check out homes for sale in Indiana.

7. Kentucky

• Median home price: $269,938
• Cost of living index: 93
• Median household income: $62,417
• Median monthly mortgage payment: $932

While hundreds of thousands of visitors flock to Kentucky for one of the most prestigious horse races in the world, the Kentucky Derby, more than 4.5 million people call the Bluegrass State Home. And with good reason. The state is known for having a low cost of living and a median home price of $269,938. Kentucky's effective property tax rate is 0.77%, which is more affordable than most states. And so are the annual property taxes paid at $1,472.

But there’s more to Kentucky than low prices and horse races. It also features a massive underground cave system, lush forests, waterfalls, and mountains. City dwellers can find excitement in Louisville or Lexington, while others who prefer an unhurried way of life will feel at home in one of the state’s rural areas. Check out homes for sale in Kentucky.

8. Michigan 

• Median home price: $230,075
• Cost of living index: 90.4
• Median household income: $71,149
• Median monthly mortgage payment: $1,152

Michigan is home to manufacturing, excellent colleges, and beautiful lakeside homes. It’s also the second of three Midwest states on our top 10 cheapest states to buy a house. The cost of living index here is around 10% less than the country overall. The average annual homeowner’s insurance cost isn’t too bad at $2,411 per year. To make the Wolverine State your next residence, search for current homes for sale in Michigan.

9. Missouri

• Median home price: $258,586
• Cost of living index: 88.7
• Median household income: $68,920
• Median monthly mortgage payment: $990

Home to Kansas City, St. Louis, the tourist town of Branson, and much more, Missouri is the No. 8 cheapest state to buy a house. Home prices are affordable, with a median price of $258,586 and a very low median mortgage payment of $990. With a median household income of $68,920, the ratio of income-to-mortgage payment is favorable to homeowners and their budgets. Take time to review current homes for sale in Missouri.

10. Ohio

• Median home price: $231,798
• Cost of living index: 94.2
• Median household income: $69,680
• Median monthly mortgage payment: $1,166

Ohio has the second-cheapest homes in the Midwest. Its median home price of $231,798 is just a tad more than Michigan’s $230,075. The median annual property taxes are $2,712, more than most states. The average annual homeowner’s insurance also is very affordable, at $2,160. Check out homes for sale in Ohio if you’re looking for affordability in the Midwest.

States ranked by affordability

Along with the purchase price, buyers will also need to pay annual real estate (or property) taxes and homeowners insurance.

It is common for the cheapest states to buy a house to be in the South and Midwest. The Northeast and West Coast tend to rank among the least affordable. But there are some catches. A notable one has to do with states along the Gulf Coast. States like Mississippi and Alabama have cheap homes, but homeowners insurance tends to be high because of the frequency of hurricanes.

Methodology

Rocket^® collected and analyzed the most recent data on real estate taxes, home prices, cost of living index, housing price index movement, and homeowners insurance to give us insight into the cheapest states to buy a house.

Each state’s metrics were individually ranked before weights were applied to each metric depending on their individual importance. The final scores were then sorted to produce the final rankings. Median annual real estate taxes are an average of owner-occupied units with and without a mortgage. The effective property tax rate was calculated by dividing the median yearly real estate taxes by the median home value. Housing price index movement is based on changes in house prices since the first quarter of 1991, according to the Federal Housing Finance Agency. Average homeowner’s insurance is based on an average annual rate for $400,000 in dwelling coverage. All U.S. Census Bureau data is based on 2023 5-year estimates.

Other metrics considered without weight:

The bottom line

Geography plays a huge role when it comes to home affordability. If you’re willing to relocate to buy a home, then you have options – and good options. In a time when working remotely is more prevalent than ever before, relocating is viable for more people.

But it’s always key to remember that home price alone does not determine affordability. Property tax rates can dramatically increase the costs of owning a home. For instance, some states have higher home prices than New Jersey ($546,594 median price), but the state’s effective property tax rate of 2.23% makes for a median of over $9,500 in property taxes per year. Homeowner’s insurance is another cost to keep your eye on, as it can undermine the benefits of cheap prices. Our study of the cheapest states to buy a house incorporated all these factors. Before you make a huge decision like where to buy a home, you need to have all the pertinent information you can.