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:
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 cash back
What’s driving the cheapest real estate in the U.S. in 2021?
The average home value in the U.S. is $346,048 as of November 30, 2023, 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.
» LEARN: The State of Retirement Finances: 2022 Edition
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: $48,037.00
- Average home value: $157,272
- Estimated monthly mortgage payment: $1,047.39 (26.2% of monthly income)
- » READ: The Average West Virginia Real Estate Commission (2021)
- » READ: 8 Definitive Steps to Buying a House in West Virginia
2. Iowa
- Median household income: $61,836.00
- Average home value: $207,215
- Estimated monthly mortgage payment: $1,355.03 (26.3% of monthly income)
- » READ: What's The Average Iowa Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Iowa
3. Kansas
- Median household income: $61,091.00
- Average home value: $214,772
- Estimated monthly mortgage payment: $1,413.05 (27.8% of monthly income)
- » READ: What's The Average Kansas Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Kansas
4. Illinois
- Median household income: $68,428.00
- Average home value: $249,224
- Estimated monthly mortgage payment: $1,643.06 (28.8% of monthly income)
- » READ: What's The Average Illinois Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Illinois
5. Oklahoma
- Median household income: $53,840.00
- Average home value: $196,774
- Estimated monthly mortgage payment: $1,311.79 (29.2% of monthly income)
- » READ: What's The Average Oklahoma Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Oklahoma
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6. Mississippi
- Median household income: $46,511.00
- Average home value: $171,440
- Estimated monthly mortgage payment: $1,144.05 (29.5% of monthly income)
- » READ: The Average Mississippi Real Estate Commission (2021)
- » READ: 8 Definitive Steps to Buying a House in Mississippi
7. Ohio
- Median household income: $58,116.00
- Average home value: $216,115
- Estimated monthly mortgage payment: $1,430.57 (29.5% of monthly income)
- » READ: What's The Average Ohio Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Ohio
8. Kentucky
- Median household income: $52,238.00
- Average home value: $196,580
- Estimated monthly mortgage payment: $1,297.31 (29.8% of monthly income)
- » READ: What's The Average Kentucky Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Kentucky
9. North Dakota
- Median household income: $65,315.00
- Average home value: $250,248
- Estimated monthly mortgage payment: $1,656.51 (30.4% of monthly income)
- » READ: The Average North Dakota Real Estate Commission (2021)
- » READ: 8 Definitive Steps to Buying a House in North Dakota
10. Louisiana
- Median household income: $50,800.00
- Average home value: $195,356
- Estimated monthly mortgage payment: $1,302.33 (30.8% of monthly income)
- » READ: What's The Average Louisiana Real Estate Commission In 2021?
- » READ: 8 Definitive Steps to Buying a House in Louisiana
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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 | $157,272 | $48,037.00 | 7.01% | $1,047.39 | 26.2% |
| 2 | Iowa | $207,215 | $61,836.00 | 6.83% | $1,355.03 | 26.3% |
| 3 | Kansas | $214,772 | $61,091.00 | 6.89% | $1,413.05 | 27.8% |
| 4 | Illinois | $249,224 | $68,428.00 | 6.91% | $1,643.06 | 28.8% |
| 5 | Oklahoma | $196,774 | $53,840.00 | 7.02% | $1,311.79 | 29.2% |
| 6 | Mississippi | $171,440 | $46,511.00 | 7.03% | $1,144.05 | 29.5% |
| 7 | Ohio | $216,115 | $58,116.00 | 6.95% | $1,430.57 | 29.5% |
| 8 | Kentucky | $196,580 | $52,238.00 | 6.92% | $1,297.31 | 29.8% |
| 9 | North Dakota | $250,248 | $65,315.00 | 6.95% | $1,656.51 | 30.4% |
| 10 | Louisiana | $195,356 | $50,800.00 | 7.02% | $1,302.33 | 30.8% |
| 11 | Indiana | $228,879 | $58,235.00 | 6.84% | $1,498.22 | 30.9% |
| 12 | Michigan | $232,380 | $59,234.00 | 6.95% | $1,538.23 | 31.2% |
| 13 | Nebraska | $249,135 | $63,015.00 | 6.96% | $1,650.81 | 31.4% |
| 14 | Pennsylvania | $254,802 | $63,627.00 | 6.93% | $1,683.24 | 31.7% |
| 15 | Arkansas | $197,411 | $49,475.00 | 7.02% | $1,316.03 | 31.9% |
| 16 | Missouri | $235,844 | $57,290.00 | 6.95% | $1,561.16 | 32.7% |
| 17 | Alabama | $221,428 | $52,035.00 | 7.06% | $1,482.10 | 34.2% |
| 18 | Minnesota | $324,215 | $73,382.00 | 6.94% | $2,143.96 | 35.1% |
| 19 | Wisconsin | $286,787 | $63,293.00 | 6.87% | $1,883.03 | 35.7% |
| 20 | Alaska | $349,231 | $77,790.00 | 7.06% | $2,337.53 | 36.1% |
| 21 | Maryland | $402,625 | $87,063.00 | 7.05% | $2,692.21 | 37.1% |
| 22 | Texas | $296,127 | $63,826.00 | 7.03% | $1,976.11 | 37.2% |
| 23 | Connecticut | $381,620 | $79,855.00 | 6.84% | $2,498.05 | 37.5% |
| 24 | South Dakota | $291,081 | $59,896.00 | 6.96% | $1,928.76 | 38.6% |
| 25 | Virginia | $372,801 | $76,398.00 | 7.06% | $2,495.29 | 39.2% |
| 26 | Wyoming | $335,160 | $65,304.00 | 6.98% | $2,225.33 | 40.9% |
| 27 | Georgia | $319,158 | $61,224.00 | 7.00% | $2,123.37 | 41.6% |
| 28 | South Carolina | $287,063 | $54,864.00 | 7.08% | $1,925.29 | 42.1% |
| 29 | Delaware | $375,165 | $69,110.00 | 6.85% | $2,458.30 | 42.7% |
| 30 | North Carolina | $320,716 | $56,642.00 | 7.02% | $2,138.04 | 45.3% |
| 31 | Tennessee | $309,913 | $54,833.00 | 7.05% | $2,072.28 | 45.4% |
| 32 | New Mexico | $291,722 | $51,243.00 | 7.01% | $1,942.79 | 45.5% |
| 33 | New Hampshire | $447,215 | $77,923.00 | 7.01% | $2,978.34 | 45.9% |
| 34 | New Jersey | $495,469 | $85,245.00 | 6.95% | $3,279.75 | 46.2% |
| 35 | Vermont | $385,968 | $63,477.00 | 7.05% | $2,580.83 | 48.8% |
| 36 | Rhode Island | $435,415 | $70,305.00 | 7.03% | $2,905.60 | 49.6% |
| 37 | New York | $450,466 | $71,117.00 | 6.94% | $2,978.83 | 50.3% |
| 38 | Maine | $385,019 | $59,489.00 | 7.04% | $2,571.89 | 51.9% |
| 39 | Nevada | $418,583 | $62,043.00 | 6.95% | $2,770.80 | 53.6% |
| 40 | Florida | $391,213 | $57,703.00 | 7.02% | $2,608.01 | 54.2% |
| 41 | Utah | $502,647 | $74,197.00 | 7.03% | $3,354.26 | 54.2% |
| 42 | Massachusetts | $588,621 | $84,385.00 | 6.84% | $3,853.07 | 54.8% |
| 43 | Arizona | $422,243 | $61,529.00 | 7.03% | $2,817.71 | 55.0% |
| 44 | Colorado | $528,285 | $75,231.00 | 7.03% | $3,525.34 | 56.2% |
| 45 | Washington | $566,052 | $77,006.00 | 6.92% | $3,735.59 | 58.2% |
| 46 | Oregon | $483,939 | $65,667.00 | 7.03% | $3,229.41 | 59.0% |
| 47 | Idaho | $434,224 | $58,915.00 | 7.06% | $2,906.42 | 59.2% |
| 48 | Montana | $446,483 | $56,539.00 | 7.05% | $2,985.47 | 63.4% |
| 49 | California | $746,055 | $78,672.00 | 7.00% | $4,963.52 | 75.7% |
| 50 | Hawaii | $840,748 | $83,173.00 | 6.78% | $5,469.85 | 78.9% |
| Overall | United States | $346,048 | $64,529 | 6.98% | $2,296.69 | 42.7% |
*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:
- Zillow’s Home Value Index All Homes (average home value by state)
- U.S. Census Bureau (median income by state)
- Business Insider (average mortgage interest rate by state)
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.
What state has the cheapest houses?
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 Virginia to maximize your savings.Where are the cheapest houses?
How can I find the cheapest houses?
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.
