The 10 Most Affordable States to Buy a 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

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

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

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

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

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

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)

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)

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

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

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.

Read Next
7 Ways Coupons Waste Your Money and Time

Here’s why I hung up my scissors and quit clipping coupons.

3 Ways to Get Paid for Searching the Web

If you’re already doing it anyway, why not get rewarded for it? Here are three great opportunities.

7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

3 Reasons You Can’t Rely on Medicare Alone

Counting on Medicare to cover health care costs can jeopardize your retirement plans.

These 5 Laptops Have the Best Battery Life

Need a laptop that runs as long as you do? Check out these models.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
20 Things That Are Actually Worth Stockpiling

You don’t need a year’s supply of toilet paper to survive an outbreak, but consider stocking up on these items.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

9 Mistakes Everyone Makes When Shopping on Amazon

Are you losing money due to any of these missteps?

9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

Never Buy These 10 Things With Your Credit Card

Credit cards offer many conveniences and protections, but sometimes it’s simply smarter to keep the plastic tucked away.

13 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

5 Secrets of Seniors Who Keep Their Minds ‘Young’

Here is why some seniors’ brains work as well as those of people who are decades younger.

11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.