The Top 10 Cheapest States to Buy a House in 2021

Kristy Snyder

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Kristy Snyder

July 13th, 2021
Updated July 13th, 2021

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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. West Virginia
  2. Iowa
  3. Oklahoma
  4. Kansas
  5. Arkansas
  6. Ohio
  7. Mississippi
  8. Indiana
  9. Alabama
  10. Nebraska

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 $286,670 as of May 31, 2021, 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. West Virginia

  • Median household income: $46,711
  • Average home value: $116,778
  • Estimated monthly mortgage payment: $513.37 (13.2% 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.

2. Iowa

  • Median household income: $60,523
  • Average home value: $165,562
  • Estimated monthly mortgage payment: $689.12 (13.7% 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.

3. Oklahoma

  • Median household income: $52,919
  • Average home value: $149,781
  • Estimated monthly mortgage payment: $635.53 (14.4% 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.

4. Kansas

  • Median household income: $59,597
  • Average home value: $175,986
  • Estimated monthly mortgage payment: $748.62 (15.1% 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.

5. Arkansas

  • Median household income: $47,597
  • Average home value: $146,625
  • Estimated monthly mortgage payment: $625.32 (15.8% of monthly income)

Singer Johnny Cash’s home state offers an affordable cost of living and rapidly appreciating home values, making it a great place to invest in as your new home base. Home values have gone up 9.6% since May 2020, according to Zillow. Arkansas is also home to an astounding six national parks, including Hot Springs National Park where notables ranging from former President Franklin D. Roosevelt to gangster Al Capone have historically taken a dip.

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6. Ohio

  • Median household income: $56,602
  • Average home value: $180,374
  • Estimated monthly mortgage payment: $755.61 (16.0% 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.

7. Mississippi

  • Median household income: $45,081
  • Average home value: $140,634
  • Estimated monthly mortgage payment: $609.73 (16.2% 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.

8. Indiana

  • Median household income: $56,303
  • Average home value: $183,095
  • Estimated monthly mortgage payment: $765.04 (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.

9. Alabama

  • Median household income: $50,536
  • Average home value: $167,076
  • Estimated monthly mortgage payment: $713.44 (16.9% of monthly income)

With its enticing and diverse geography, Alabama might be just the place for you to settle down. The Appalachian Mountains are in the north, the Gulf of Mexico is to the south, and the Black Belt Prairie runs right through the middle. And that’s not to mention the 1,500 miles of inland waterways! This provides water access like you could have in nearby Florida while saving over $500 a month in mortgage costs.

10. Nebraska

  • Median household income: $61,439
  • Average home value: $203,828
  • Estimated monthly mortgage payment: $869.27 (17.0% of monthly income)

Although it’s perhaps better known as an agricultural powerhouse, Nebraska has more than its fair share of quirky, artsy offerings — from its Carhenge sculpture to Saddle Creek Records. On average, Nebraskans save around $1,180 per month on mortgage payments, compared to residents of neighboring state Colorado.

Next Steps: Talk to an expert!

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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
West Virginia
$116,778
$46,711
3.33%
$513.37
13.2%
2
Iowa
$165,562
$60,523
2.90%
$689.12
13.7%
3
Oklahoma
$149,781
$52,919
3.05%
$635.53
14.4%
4
Kansas
$175,986
$59,597
3.07%
$748.62
15.1%
5
Arkansas
$146,625
$47,597
3.09%
$625.32
15.8%
6
Ohio
$180,374
$56,602
2.95%
$755.61
16.0%
7
Mississippi
$140,634
$45,081
3.22%
$609.73
16.2%
8
Indiana
$183,095
$56,303
2.93%
$765.04
16.3%
9
Alabama
$167,076
$50,536
3.10%
$713.44
16.9%
10
Nebraska
$203,828
$61,439
3.09%
$869.27
17.0%
11
Kentucky
$167,059
$50,589
3.13%
$716.09
17.0%
12
Missouri
$192,094
$55,461
3.01%
$810.91
17.5%
13
Illinois
$230,989
$65,886
3.00%
$973.86
17.7%
14
Michigan
$203,472
$57,144
3.02%
$860.04
18.1%
15
Wisconsin
$228,108
$61,747
2.96%
$956.80
18.6%
16
Pennsylvania
$229,906
$61,744
3.03%
$973.02
18.9%
17
Louisiana
$186,064
$49,469
3.07%
$791.50
19.2%
18
North Dakota
$250,326
$64,894
3.09%
$1,067.57
19.7%
19
Texas
$241,987
$61,874
2.99%
$1,018.92
19.8%
20
Alaska
$313,969
$77,640
3.00%
$1,323.71
20.5%
21
Georgia
$241,606
$58,700
3.00%
$1,018.62
20.8%
22
South Dakota
$239,786
$58,275
3.07%
$1,020.02
21.0%
23
Connecticut
$330,853
$78,444
2.92%
$1,380.66
21.1%
24
Wyoming
$268,950
$64,049
3.02%
$1,136.81
21.3%
25
Minnesota
$301,175
$71,306
3.00%
$1,269.77
21.4%
26
Tennessee
$225,138
$53,320
3.06%
$956.49
21.5%
27
Maryland
$371,997
$84,805
2.81%
$1,530.49
21.7%
28
South Carolina
$223,947
$53,199
3.15%
$962.38
21.7%
29
Virginia
$327,545
$74,222
2.92%
$1,366.85
22.1%
30
Delaware
$302,996
$68,287
2.95%
$1,269.29
22.3%
31
North Carolina
$245,003
$54,602
3.19%
$1,058.22
23.3%
32
New York
$315,687
$68,486
3.00%
$1,330.95
23.3%
33
New Hampshire
$371,399
$76,768
2.97%
$1,559.83
24.4%
34
Vermont
$300,038
$61,973
2.99%
$1,263.35
24.5%
35
New Mexico
$245,921
$49,754
2.97%
$1,032.84
24.9%
36
New Jersey
$411,162
$82,545
3.03%
$1,740.14
25.3%
37
Maine
$297,465
$57,918
3.14%
$1,276.70
26.5%
38
Florida
$303,556
$55,660
2.96%
$1,273.27
27.5%
39
Rhode Island
$372,802
$67,167
3.10%
$1,591.93
28.4%
40
Arizona
$351,661
$58,945
2.77%
$1,439.35
29.3%
41
Nevada
$372,760
$60,365
2.75%
$1,521.76
30.3%
42
Utah
$460,884
$71,621
2.64%
$1,854.77
31.1%
43
Montana
$348,471
$54,970
3.09%
$1,486.14
32.4%
44
Massachusetts
$521,818
$81,215
3.01%
$2,202.82
32.5%
45
Colorado
$491,022
$72,331
2.93%
$2,051.68
34.0%
46
Idaho
$390,682
$55,785
2.87%
$1,619.87
34.8%
47
Washington
$512,854
$73,775
2.96%
$2,151.17
35.0%
48
Oregon
$442,296
$62,818
2.91%
$1,843.34
35.2%
49
California
$682,099
$75,235
2.87%
$2,828.15
45.1%
50
Hawaii
$820,594
$81,275
2.86%
$3,398.01
50.2%
Overall
United States
$286,670
$62,631
3.00%
$1,208.43
23.2%

*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.

<span style="font-family: " open="" sans",="" sans-serif;="" font-size:="" 14px;"="">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. </span><a href="https://listwithclever.com/home-buyer-rebates/" style="background-color: rgb(255, 255, 255); font-family: " open="" sans",="" sans-serif;="" font-size:="" 14px;"="">Learn more about how home buyer rebates</a><span style="font-family: " open="" sans",="" sans-serif;="" font-size:="" 14px;"=""> can help you pay even less for a cheap home.</span>

</span>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. <a href="https://listwithclever.com/real-estate-blog/8-steps-to-buying-a-house-in-west-virginia/">Check out our guide to buying a home in West Virginia</a> to 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 Virginia to 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 <a href="https://listwithclever.com/best-home-buying-websites/" rel="noopener noreferrer" style="background-color: rgb(255, 255, 255);" target="_blank">list of the top 20 home buying sites here</a>. Also keep an eye out for fixer uppers, <a href="https://listwithclever.com/real-estate-blog/short-sale-vs-foreclosure/" style="background-color: rgb(255, 255, 255);">foreclosures</a>, or <a href="https://listwithclever.com/real-estate-blog/short-sale-vs-foreclosure/" style="background-color: rgb(255, 255, 255);">short sales</a>, as you might be able to get a great deal.

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