The 10 Most Affordable States to Buy a Home

A happy couple with boxes sitting on the floor of their new home
Rido / Shutterstock.com

This story originally appeared on SmartAsset.com.

Owning a home is a major goal for many people across the U.S. Securing a mortgage and buying that home, though, can be difficult to achieve.

According to a June 2020 Home Values report from Zillow, the median home value in the U.S. is $248,857, an uptick of 4% over the past year. Though values are expected to fall about 1.5% in the year ahead, just how much you’ll be spending largely depends on where you’re living.

That’s why SmartAsset crunched the numbers for the 2020 edition of our study on the cheapest states to buy a home. To find the cheapest states to buy a home, we analyzed data for all 50 states, plus Washington, D.C., across the following five metrics:

  • Effective property tax rate. The data comes from the Census Bureau’s 2018 one-year American Community Survey.
  • Median listing price. The data comes from Zillow and is for January 2020.
  • Median listing price per square foot. The data comes from Zillow and is for January 2020.
  • Median value of the bottom one-third of the market. This is the median value for all homes in the bottom third of home values in the state. The data comes from Zillow and is for January 2020.
  • Average closing costs. The data is from SmartAsset’s closing costs calculator and is for March 2020.

First, we ranked each state according to each metric. Then we found the average ranking for each state, assigning each metric an equal weight. We used these average rankings to determine our final score. The state with the highest average ranking received a score of 100. The state with the lowest average ranking received a score of 0.

Following are the results.

10. Ohio

Columbus, Ohio
Randall Vermillion / Shutterstock.com

Despite coming in 39th overall for its relatively high effective property tax rate (at 1.52%), the state ranks in the top 10 for three different metrics: No. 2 for low median listing price (at $169,900), No. 5 for low median listing price per square foot (at $108) and No. 8 for low median value of the bottom third of homes (at $81,700).

9. Louisiana

Streetcar in New Orleans
TFoxFoto / Shutterstock.com

Louisiana, the only state in this year’s top 10 that wasn’t there last year, has the fourth-lowest effective property tax rate in this study, at 0.55%.

The Bayou State also places 11th-best for its affordable median listing price per square foot, at $122, and 13th-best for its relatively low median value of the bottom third of homes, at $93,300.

8. Missouri

St. Louis, Missouri
Joseph Sohm / Shutterstock.com

Missouri ranks in the top 10 across all 50 states and the District of Columbia for three of the five metrics we examined in this study.

It has the fourth-lowest average closing costs (at $2,656), the seventh-lowest median listing price (at $186,000) and the ninth-lowest median listing price per square foot (at $120).

7. Kentucky

Lexington, Kentucky
Henryk Sadura / Shutterstock.com

Kentucky has the third-lowest average closing costs in the study, at $2,642.

It ranks seventh overall for its affordable median value of the bottom third of homes, at $76,700, and eighth overall for an affordable median listing price per square foot, at $118.

6. Oklahoma

Oklahoma Route 66
Peek Creative Collective / Shutterstock.com

Oklahoma has the third-lowest median value for the bottom third of homes, at $64,100.

The state’s new homeowners can also expect relatively low closing costs, with an average of $2,673, the fifth-lowest in the study. Oklahoma also ties for the fifth-lowest median listing price per square foot, at $108.

5. Indiana

Indianapolis
f11photo / Shutterstock.com

The Hoosier State has the second-lowest average closing costs in the study, at $2,627.

Indiana also is tied for the fifth-lowest median listing price per square foot, at $108. It has the seventh-lowest median listing price overall, at $186,000. Its effective property tax rate, at 0.82%, ranks toward the middle of the pack.

3. Mississippi (tie)

Oxford, Mississippi
James Kirkikis / Shutterstock.com

Another Southern state, Alabama, is tied with Mississippi for third place in our study. Mississippi leads this study for its affordable median listing price per square foot, at $96 per square foot.

The median value of the bottom one-third of homes is $70,800, the fifth-lowest amount for this metric in the study. Mississippi residents do pay a bit more than some to their state, with an effective property tax rate of 0.78%, 18th-lowest overall.

However, the state still ranks within the top 10 of the study for median listing price and average closing costs.

3. Alabama (tie)

Huntsville, Alabama
Sean Pavone / Shutterstock.com

Alabama places in the top five of the study for three of the metrics we considered.

It places second for its low effective property tax rate, at 0.40%. It comes in fourth-best for two other metrics: a median listing price per square foot of $105 and a median value for the bottom third of homes of $66,100.

2. Arkansas

Little Rock, Arkansas
Joseph Sohm / Shutterstock.com

Arkansas also places in the top five for three of the metrics we studied.

It has the second-lowest median value of the bottom one-third of homes (at $62,900), the third-lowest median listing price per square foot (at $101) and the fifth-lowest median listing price in the study (at $176,000).

1. West Virginia

Harpers Ferry, West Virginia
Jon Bilous / Shutterstock.com

The cheapest state to buy a home is once again West Virginia.

The median listing price in the Mountain State is $165,000 — the lowest median price in the study. West Virginia also ranks first for its low median value of the bottom third of homes, at $53,600.

The state comes in second-best for its affordable median listing price per square foot, at $97.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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