The Top 10 Cheapest States to Buy a House in 2021

Kristy Snyder

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Kristy Snyder

May 19th, 2022
Updated May 19th, 2022

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What’s driving the cheapest real estate? | Best states to buy a home | Complete cheap home rankings | Sources and methodology | FAQs

The housing market is expensive in 2021. Fierce demand and competition are creating a seller’s market, driving up home prices and making it harder to find a cheap house.

But it's still possible to find good deals in certain locations. We crunched the numbers and identified the 10 cheapest states to buy a house.

The best states to buy a home in 2021 if you’re looking for a bargain are:

  1. Mississippi
  2. Michigan
  3. West Virginia
  4. Ohio
  5. Oklahoma
  6. Kentucky
  7. Indiana
  8. Iowa
  9. Kansas
  10. New Mexico

While these states are experiencing rising home prices, they’re still way more affordable than most other places. We’ll go over just how affordable homes in these states are below.

If you’re looking to save even more money on a home purchase, you’ll want to use an agent matching service like Clever to get access to a top-rated agent and Clever Cash Back.

» LEARN: How to get up to 0.5% of your sale price as cash back

What’s driving the cheapest real estate in the U.S. in 2021?

The average home value in the U.S. is $337,560 as of March 31, 2022, which is up 13.2% from the same time last year. Home values do typically rise every year, but the pandemic caused a larger-than-usual spike in average home prices.

Unfortunately for buyers, this trend will likely continue. Experts predict home values will rise 14.9% by May 2022.

So what’s driving this sudden demand? Mainly, low interest rates.

The average interest rate for a mortgage dropped as low as 2.65% nationally in January 2021. That’s nearly a 2% decrease from what rates were in 2018. Rates have risen slightly in 2021, but they're still near historic lows.

Thanks to these record-low rates, even with higher home prices, people can still afford to spend more. The money they save in interest allows them to splurge on a property.

Even if you don’t want to buy in one of the cheapest places on this list, lower interest rates may still allow you to get more home for your money.

And if you're looking in one of the best low-cost states to buy a home? You’ll be primed for an extremely affordable property without paying a ton in interest.

Best states to buy a home in 2021

We noticed a clear trend in the data — the cheapest states to buy a home are in the Midwest and South. In most cases, the further north, east, or west you go, the more expensive it gets.

Check out this interactive map to see the differences among states:

To learn more about the area you’re looking at to buy a home, partner with a top agent.

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1. Mississippi

  • Median household income: $71,306.00
  • Average home value: $159,955
  • Estimated monthly mortgage payment: $693.50 (11.7% of monthly income)

If you're looking for a quieter life, Mississippi could be home sweet home: The entire state has fewer than 3 million people. Mild winters and diverse waterways — including access to lakes, rivers, and the Gulf of Mexico — encourage fishing and outdoor recreational activities year round. Plus, most people save around $300 a month in mortgage payments compared to their neighbors in Tennessee.

2. Michigan

  • Median household income: $81,215.00
  • Average home value: $228,120
  • Estimated monthly mortgage payment: $948.28 (14.0% of monthly income)

Bordered by four of the five Great Lakes, Michigan is a water lover’s paradise. It’s also a great place to live if you want to save money, as the average home value is well below the national average. If you work in Chicago, living in southwest Michigan may even be a good way to save huge on your housing costs if you don’t mind a slightly longer commute.

3. West Virginia

  • Median household income: $46,711.00
  • Average home value: $130,625
  • Estimated monthly mortgage payment: $576.40 (14.8% of monthly income)

West Virginia residents' monthly mortgage payments are about three times less than their neighbors in Virginia, who spend an average of $1,367 each month. The numbers explain why so many West Virginians in the northeast part of the state take advantage of the state’s affordability while commuting to work in Virginia, Maryland, and even Washington D.C.

4. Ohio

  • Median household income: $64,894.00
  • Average home value: $202,341
  • Estimated monthly mortgage payment: $837.88 (15.5% of monthly income)

Ohio has a reputation for being affordable, especially when you compare it to next-door neighbor Pennsylvania. You could save over $200 a month in mortgage payments by living in the Buckeye State. If you enjoy spending time in nature, you can explore Ohio’s 83 state parks or the 293-mile scenic byway that traces the coast of Lake Erie. Cleveland’s tech and startup scene has revitalized the famed Ohio city, attracting millions of dollars' worth of investments in innovative new ventures.

5. Oklahoma

  • Median household income: $56,602.00
  • Average home value: $173,410
  • Estimated monthly mortgage payment: $737.67 (15.6% of monthly income)

Oklahoma offers affordable homes for budget-conscious buyers — plus a sweet deal for those relocating from out of state. Remote workers who relocate to Tulsa may be eligible for a $10,000 grant, as long as they stay for at least a year. Once you arrive in Oklahoma, you’ll find plenty of reasons to stick around: The state offers around 200 lakes, sweeping plains, and even an annual Bigfoot Festival.

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A Clever partner agent can give you professional service while also putting $250 or 0.5% back in your pocket after closing!

6. Kentucky

  • Median household income: $59,597.00
  • Average home value: $190,575
  • Estimated monthly mortgage payment: $807.59 (16.3% of monthly income)

Along with an affordable cost of living, the Bluegrass State offers plenty of local charm including the world-famous Churchill Downs racetrack, its signature bourbon, and a vibrant circuit of music festivals. Home values are around $45,000 less in Kentucky on average, compared to neighboring Tennessee — which is good news if you’re looking for a home you can afford.

7. Indiana

  • Median household income: $65,886.00
  • Average home value: $212,953
  • Estimated monthly mortgage payment: $893.23 (16.3% of monthly income)

The Hoosier State was once home to actors James Dean and Adam Driver, and the real-life Johnny Appleseed — and it could be your new home, too. If you work in Chicago, Northern Indiana offers affordable housing within commuting distance, while helping you save more than $200 per month in mortgage payments on average.

8. Iowa

  • Median household income: $56,303.00
  • Average home value: $184,972
  • Estimated monthly mortgage payment: $776.86 (16.6% of monthly income)

If you picture Iowa as a state of rolling farmland, you’re not entirely wrong — the Hawkeye State ranks first for producing a wealth of agricultural products. But Iowa has plenty to offer urbanites, too. In recent years, Iowa’s capital city of Des Moines has earned national recognition for its growing tech sector, arts scene, farmers' markets, and more. Best of all, on average you’ll pay around $65,000 less than you would for a home in neighboring Illinois.

9. Kansas

  • Median household income: $60,523.00
  • Average home value: $199,893
  • Estimated monthly mortgage payment: $849.24 (16.8% of monthly income)

If you want to see your home’s appreciation skyrocket, look no further than Kansas. According to the most recent Zillow data, the Sunflower State’s home values have climbed 10.5% since May 2020. Despite its rural splendor, Kansas is also paving the way for a cleaner future as one of the top wind-energy producers in the country.

10. New Mexico

  • Median household income: $82,545.00
  • Average home value: $281,938
  • Estimated monthly mortgage payment: $1,197.80 (17.4% of monthly income)

In New Mexico, you’ll get to enjoy vibrant culture mixed with stunning desert landscapes. Because the average median income is higher in New Mexico, this makes it a more affordable place to live than nearby states like Texas and Arizona. Spend your days exploring Carlsbad Caverns National Park, checking out the shopping and dining of Albuquerque, or trekking the Continental Divide Trail.

Next Steps: Talk to an expert!

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Our fully licensed Concierge Team is standing by to answer your questions and match you with top-rated buyer’s agents who offer built-in commission rebates — no negotiations required!

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Give us a call at 1-833-2-CLEVER or enter some basic info about your purchase below. Our Concierge Team will be in touch shortly to help!

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Complete cheap home rankings for 2021

Where does your state rank among the cheapest states to buy a home? Here’s how all 50 states stack up. (See our sources and methodology below)

Rank
State
Median Home Value
Median Household Income
Average 30-Year Fixed Mortgage Rate
Average Monthly Mortgage Payment
% of Income Spent on Mortgage
1
Mississippi
$159,955
$71,306.00
3.22%
$693.50
11.7%
2
Michigan
$228,120
$81,215.00
2.89%
$948.28
14.0%
3
West Virginia
$130,625
$46,711.00
3.36%
$576.40
14.8%
4
Ohio
$202,341
$64,894.00
2.86%
$837.88
15.5%
5
Oklahoma
$173,410
$56,602.00
3.07%
$737.67
15.6%
6
Kentucky
$190,575
$59,597.00
3.04%
$807.59
16.3%
7
Indiana
$212,953
$65,886.00
2.96%
$893.23
16.3%
8
Iowa
$184,972
$56,303.00
2.97%
$776.86
16.6%
9
Kansas
$199,893
$60,523.00
3.06%
$849.24
16.8%
10
New Mexico
$281,938
$82,545.00
3.06%
$1,197.80
17.4%
11
Arkansas
$172,306
$47,597.00
2.96%
$722.74
18.2%
12
Alabama
$197,667
$50,536.00
2.99%
$832.31
19.8%
13
South Carolina
$274,401
$67,167.00
2.97%
$1,152.45
20.6%
14
Alaska
$315,353
$77,640.00
3.07%
$1,341.48
20.7%
15
Wisconsin
$254,680
$61,747.00
2.99%
$1,072.37
20.8%
16
Pennsylvania
$257,272
$62,818.00
3.09%
$1,097.20
21.0%
17
Louisiana
$208,049
$50,589.00
3.13%
$891.80
21.2%
18
Florida
$367,175
$86,420.00
2.94%
$1,536.17
21.3%
19
Nebraska
$233,006
$54,970.00
3.21%
$1,008.95
22.0%
20
Connecticut
$348,047
$78,444.00
2.99%
$1,465.50
22.4%
21
North Carolina
$302,153
$68,486.00
3.04%
$1,280.42
22.4%
22
Illinois
$256,010
$55,785.00
3.03%
$1,083.50
23.3%
23
Vermont
$341,415
$71,621.00
3.03%
$1,444.95
24.2%
24
Tennessee
$282,592
$58,275.00
3.03%
$1,196.00
24.6%
25
Missouri
$221,446
$45,081.00
3.04%
$938.41
25.0%
26
North Dakota
$268,918
$54,602.00
3.02%
$1,136.67
25.0%
27
Delaware
$340,910
$68,287.00
3.00%
$1,437.29
25.3%
28
Wyoming
$312,604
$64,049.00
3.23%
$1,357.04
25.4%
29
South Dakota
$282,226
$53,199.00
3.19%
$1,218.99
27.5%
30
Georgia
$300,885
$55,660.00
3.09%
$1,283.19
27.7%
31
Texas
$295,319
$53,320.00
2.99%
$1,243.48
28.0%
32
Minnesota
$326,359
$57,144.00
2.99%
$1,374.18
28.9%
33
Idaho
$470,489
$81,275.00
2.98%
$1,978.53
29.2%
34
New Jersey
$446,566
$76,768.00
2.97%
$1,875.52
29.3%
35
Virginia
$362,171
$61,973.00
3.05%
$1,536.71
29.8%
36
Maryland
$394,125
$57,918.00
2.92%
$1,644.69
34.1%
37
Massachusetts
$566,287
$84,805.00
3.15%
$2,433.54
34.4%
38
New Hampshire
$418,382
$60,365.00
3.08%
$1,782.02
35.4%
39
Arizona
$424,544
$58,945.00
2.92%
$1,771.63
36.1%
40
Maine
$348,997
$49,469.00
3.14%
$1,497.87
36.3%
41
Nevada
$445,515
$61,439.00
2.98%
$1,873.51
36.6%
42
New York
$387,069
$49,754.00
3.00%
$1,631.90
39.4%
43
Colorado
$569,952
$72,331.00
2.99%
$2,399.87
39.8%
44
Montana
$436,252
$55,461.00
3.08%
$1,858.13
40.2%
45
Washington
$606,643
$74,222.00
2.96%
$2,544.56
41.1%
46
Utah
$555,263
$61,874.00
2.85%
$2,296.33
44.5%
47
Oregon
$509,539
$52,919.00
2.97%
$2,140.00
48.5%
48
California
$774,899
$75,235.00
2.92%
$3,233.67
51.6%
49
Hawaii
$863,632
$58,700.00
2.86%
$3,576.22
73.1%
50
Rhode Island
$416,945
$20,539.00
3.20%
$1,803.15
105.3%
Overall
United States
$337,560
$62,060
3.03%
$1,428.74
27.6%

*U.S. Census Bureau’s 2019 American Housing Survey
**Most recent Zillow data
***Est. mortgage payment assumes 20% down for a 30-year mortgage, excluding insurance and property taxes

How we ranked the best states to buy a house: Sources and methodology

Clever ranked states according to their overall cost of living and affordability.

We analyzed the most recent publicly available data from:

Then, we used this data to calculate the percentage of income state residents typically spend on their monthly mortgage. This allowed us to rank all 50 states from least to most expensive.

FAQs about the cheapest real estate in the U.S.

West Virginia is the state with the cheapest houses. The median house value is just $116,778. You may be able to pay less than that with a home buyer rebate. West Virginia is one of 42 states (plus Washington, D.C.) that allows home buyer rebates. Learn more about how home buyer rebates can help you pay even less for a cheap home.

The cheapest houses in the U.S. are primarily in the Midwest and South. All of the 10 cheapest states to buy a home are in these regions. Generally, the farther north, east, or west you go, the more expensive homes become. West Virginia is the cheapest state to buy a home. Check out our guide to buying a home in West Virginiato maximize your savings.
The cheapest houses in the U.S. are primarily in the Midwest and South. All of the 10 cheapest states to buy a home are in these regions. Generally, the farther north, east, or west you go, the more expensive homes become. West Virginia is the cheapest state to buy a home. Check out our guide to buying a home in West Virginiato maximize your savings.

Finding the cheapest houses requires closely following the market. Set up notifications from home buying sites so you can see when new homes are listed. We’ve created a list of the top 20 home buying sites here. Also keep an eye out for fixer uppers, foreclosures, or short sales, as you might be able to get a great deal.

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