Which State Has The Best Houses For Your Money

Last updated on October 21, 2021

As a real estate investor, you want to find properties where your investment dollar will go the furthest.

To help you do that, we decided to compile a list of the cheapest states to buy a house in America in 2021. We analyzed data from several sources:

Zillow Research for home values and historic price trends (as of June 2021)
GOBankingRates for median rent of a 3-bedroom place
Yahoo to find the cheapest cities to buy a home
World Population Review to determine the current cost of living index for each state

Note: The following data is on a state level and will naturally vary by market within each state.

→View investment properties listed under $100K on our marketplace

1. West Virginia

West Virginia is home to just over 1.8 million people and is the 38th-most populated state in the U.S. Largest industries in West Virginia include tourism and natural resources. Charleston is the state capital and Huntington-Ashland is the largest metropolitan area.

Median home value: $117,768 (Zillow)
1-year price change: 7.1% (Zillow)
5-year price change: 19.3% (Zillow)
Median rent: $912 (GOBankingRates)
Cheapest cities to buy a house: Bluefield, Clarksburg, Beckley, Huntington (Yahoo)
Cost of living index: 91.1 (World Population Review)

2. Mississippi

Mississippi is the 34th-largest state in the U.S. and home to nearly 3 million residents. Agriculture and manufacturing are two of the largest industries in the state. Jackson is the state capital and also the largest metro area in Mississippi.

Median home value: $140,818
1-year price change: 8.4%
5-year price change: 24.7%
Median rent: $989
Cheapest cities to buy a house: Jackson, Greenville, Meridian, Gulfport
Cost of living index: 86.1

>> Browse Mississippi investment properties

3. Arkansas

Home to more than 3 million people, Arkansas is the 33rd-largest state in the U.S. Agriculture, manufacturing, and tourism help drive the economy in Arkansas. Little Rock is the capital city and also the biggest metropolitan area.

Median home value: $149,120
1-year price change: 10.4%
5-year price change: 30.0%
Median rent: $926
Cheapest cities to buy a house: Pine Bluff, Texarkana, North Little Rock, Fort Smith
Cost of living index: 86.9

>> Browse Arkansas investment properties

4. Oklahoma

Oklahoma has a population of almost 4 million people and is the 28th-most populated state in the U.S. The diverse economy is powered by the agriculture, manufacturing, and natural resource sectors. Oklahoma City is the state capital and the biggest metro area.

Median home value: $150,754
1-year price change: 10.4%
5-year price change: 29.1%
Median rent: $1,015
Cheapest cities to buy a house: Muskogee, Lawton, Shawnee, Enid
Cost of living index: 87.0

>> Browse Oklahoma investment properties

5. Iowa

Home to more than 3.1 million people, Iowa is the 30th-most populous state in the U.S. The diverse economy is driven by the manufacturing, information and biotechnology, agriculture, and natural resource sectors. Des Moines is the state capital and Omaha Bluffs is the biggest metropolitan area.

Median home value: $165,955
1-year price change: 6.8%
5-year price change: 23.1%
Median rent: $1,021
Cheapest cities to buy a house: Waterloo, Sioux City, Davenport, Council Bluffs
Cost of living index: 90.1

6. Kentucky

Kentucky is the 26th-largest state in the U.S. with almost 4.5 million people. Agriculture, manufacturing, healthcare, and natural resources help keep the economy strong. Frankfort is the state capital and Louisville is the largest metro area.

Median home value: $168,998
1-year price change: 10.8%
5-year price change: 36.3%
Median rent: $1,025
Cheapest cities to buy a house: Hopkinsville, Covington, Owensboro, Bowling Green
Cost of living index: 90.9

>> Browse Kentucky investment properties

7. Alabama

Nearly 5 million people reside in Alabama, making the state the 24th-largest in the U.S. The diverse economy of Alabama is driven in part by the agriculture, manufacturing, healthcare, and financial sectors. Montgomery is the state capital and Birmingham is the largest metro area.

Median home value: $170,184
1-year price change: 11.9%
5-year price change: 34.6%
Median rent: $1,060
Cheapest cities to buy a house: Gadsden, Birmingham, Montgomery, Phenix City
Cost of living index: 89.3

>> Browse Alabama investment properties

8. Kansas

Kansas is the 35th-most populated state in the U.S. and home to almost 3 million people. Agriculture, natural resources, and manufacturing help drive the Kansas economy. Topeka is the capital city and Kansas City is the biggest metropolitan area.

Median home value: $176,898
1-year price change: 11.3%
5-year price change: 33.8%
Median rent: $1,050
Cheapest cities to buy a house: Hutchinson, Kansas City, Topeka, Salina
Cost of living index: 89.0

>> Browse Kansas investment properties

9. Ohio

Another midwest state on the list, Ohio is the 7th largest state in the U.S. and home to nearly 12 million residents. Manufacturing and financial services are the two largest sectors of the economy. Columbus is the state capital and Cincinnati is the largest metro area.

Median home value: $181,756
1-year price change: 14.4%
5-year price change: 45.3%
Median rent: $1,024
Cheapest cities to buy a house: Youngstown, Warren, Dayton, Marion
Cost of living index: 90.8

>> Browse Ohio investment properties

10. Indiana

Indiana is home to nearly 7 million residents and is the 17th-largest state in the U.S. The economy is driven by the manufacturing, agriculture, and healthcare sectors. Indianapolis is the state capital and also the biggest metropolitan area.

Median home value: $185,805
1-year price change: 13.2%
5-year price change: 45.3%
Median rent: $1,052
Cheapest cities to buy a house: Gary, Anderson, Muncie, Richmond
Cost of living index: 90.0

>> Browse Indiana investment properties

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11. Louisiana

Louisiana is the 25th-most populated state in the U.S. with almost 4.7 million residents. Agriculture, transportation, and tourism are three of the largest business sectors in Louisiana. Baton Rouge is the state capital and New Orleans is the largest metro area.

Median home value: $187,844
1-year price change: 7.1%
5-year price change: 16.3%
Median rent: $988
Cheapest cities to buy a house: Shreveport, Alexandria, Monroe, Marrero
Cost of living index: 93.9

12. Missouri

Missouri is the 18th-most populated state in the U.S. and home to more than 6.1 million people. Major industries include aerospace, transportation, manufacturing, and financial services. Jefferson City is the state capital and St. Louis is the largest metro area.

Median home value: $194,226
1-year price change: 14.0%
5-year price change: 40.6%
Median rent: $1,086
Cheapest cities to buy a house: St. Joseph, Florissant, Joplin, Independence
Cost of living index: 87.1

>> Browse Missouri investment properties

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13. Nebraska

With nearly 1.9 million residents, Nebraska is the 37th-largest state in the U.S. Agriculture, transportation, manufacturing, and information technology help drive the state's economy. Lincoln is the state capital and Omaha-Council Bluffs is the biggest metropolitan area.

Median home value: $206,538
1-year price change: 11.8%
5-year price change: 41.0%
Median rent: $1,103
Cheapest cities to buy a house: Beatrice, Lexington, Hastings, Scottsbluff
Cost of living index: 90.8

14. Michigan

Michigan is home to nearly 10 million residents and the 10th-most populated state in the U.S. The state's diverse economy is driven by the manufacturing, natural resources, defense, and information technology sectors. Lansing is the state capital and Detroit is the biggest metropolitan area.

Median home value: $208,337
1-year price change: 15.2%
5-year price change: 51.1%
Median rent: $1,140
Cheapest cities to buy a house: Flint, Detroit, Bay City, Saginaw
Cost of living index: 88.9

>> Browse Michigan investment properties

15. South Carolina

South Carolina is the 23rd-most populated state in the U.S. and home to just over 5 million people. Agriculture, manufacturing, and healthcare are three of the largest industries in South Carolina. Columbia is the state capital and Greenville-Anderson is the largest metro area.

Median home value: $225,406
1-year price change: 12.8%
5-year price change: 37.9%
Median rent: $1,115
Cheapest cities to buy a house: Sumter, Spartanburg, Florence, Columbia
Cost of living index: 95.9

>> Browse South Carolina investment properties

16. Wisconsin

Nearly 6 million people reside in Wisconsin, making the state the 20th-largest in the U.S. Major industries such as agriculture, manufacturing, and consumer goods drive the economy. Madison is the state capital and Milwaukee is the largest metropolitan area.

Median home value: $230,733
1-year price change: 13.5%
5-year price change: 44.7%
Median rent: $1,133
Cheapest cities to buy a house: Beloit, Manitowoc, Racine, Fond du Lac
Cost of living index: 97.3

>> Browse Wisconsin investment properties

17. Tennessee

Nearly 7 million people live in Tennessee, making the state the 16th-largest in the U.S. Major industries include automotive manufacturing, agriculture and textiles, and energy. Nashville is the capital city and also the biggest metropolitan area.

Median home value: $231,682
1-year price change: 14.3%
5-year price change: 49.6%
Median rent: $1,121
Cheapest cities to buy a house: Memphis, Jackson, Kingsport, Johnson City
Cost of living index: 88.7

>> Browse Tennessee investment properties

18. Illinois

Nearly 13 million people live in Illinois, making the state the 6th-largest in the U.S. Agriculture, manufacturing, finance and investment, and the service sectors keep the diverse economy growing. Springfield is the capital city and Chicago is the largest metropolitan area.

Median home value: $233,661
1-year price change: 11.5%
5-year price change: 26.4%
Median rent: $1,240
Cheapest cities to buy a house: Danville, Galesburg, Decatur, Peoria
Cost of living index: 94.5

>> Browse Illinois investment properties

19. Pennsylvania

Home to nearly 13 million residents, Pennsylvania is the 5th-largest state in the U.S. Finance and agriculture are the two largest industries in the state. Harrisburg is the capital city and Philadelphia/Delaware Valley is the largest metro area.

Median home value: $234,684
1-year price change: 15.2%
5-year price change: 37.7%
Median rent: $1,154
Cheapest cities to buy a house: Harrisburg, Wilkes-Barre, Altoona, Scranton
Cost of living index: 101.7

>> Browse Pennsylvania investment properties

20. South Dakota

With just under 900,000 residents, South Dakota is the 5th-smallest state in the U.S. Agriculture and service sectors such as retail, finance, and healthcare drive the economy. Pierre is the state capital and Sioux Falls is the largest metro area.

Median home value: $242,923
1-year price change: 10.4%
5-year price change: 33.2%
Median rent: $979
Cheapest cities to buy a house: Huron, Mitchell, Aberdeen, Vermillion
Cost of living index: 99.8

21. Georgia

Georgia is the 8th-most populated state in the U.S. and home to more than 10.5 million people. The diverse economy is driven by the agriculture and mining, industry and logistics, and defense sectors. Atlanta is the state capital and also the largest metropolitan region in Georgia.

Median home value: $245,778
1-year price change: 15.3%
5-year price change: 49.2%
Median rent: $1,179
Cheapest cities to buy a house: Albany, Macron, Columbus, Augusta
Cost of living index: 89.2

>> Browse Georgia investment properties

22. North Dakota

The population of North Dakota is about 760,000 making it the 4th-smallest state. Agriculture is the largest industry in North Dakota, followed by petroleum, food processing, and technology. Bismarck is the state capital and Fargo is the largest metropolitan area.

Median home value: $246,588
1-year price change: 4.9%
5-year price change: 9.1%
Median rent: $1,190
Cheapest cities to buy a house: Jamestown, Minot, Grand Forks, Fargo
Cost of living index: 98.8

23. Texas

Texas is the 2nd-largest state by population in the U.S. with nearly 28 million residents. Major industries in Texas include agriculture and mining, energy and natural resources, and technology. Austin is the state capital and Dallas-Fort Worth is the largest metro area.

Median home value: $247,210
1-year price change: 14.6%
5-year price change: 40.4%
Median rent: $1,289
Cheapest cities to buy a house: Port Arthur, Wichita Falls, Brownsville, Pharr
Cost of living index: 91.5

>> Browse Texas investment properties

24. New Mexico

North Carolina is the 37th-most populated state in the U.S. and home to over 2.1 million people. About one-half of its economy is based on the service sector, while much of the remainder is centered on extractive industries (mining and oil production). Santa Fe is the state capital and Albuquerque is the biggest metro area.

Median home value: $248,670
1-year price change: 15.9%
5-year price change: 40.2%
Median rent: $1,134
Cheapest cities to buy a house: Rocky Mount, Fayetteville, Wilson, Burlington
Cost of living index: 94.9

25. North Carolina

North Carolina is the 9th-most populated state in the U.S. and home to nearly 10.4 million people. Agriculture, textiles and manufacturing, and high technology help drive the state's diverse economy. Raleigh is the state capital and Charlotte is the biggest metro area.

Median home value: $248,950
1-year price change: 15.4%
5-year price change: 46.4%
Median rent: $1,140
Cheapest cities to buy a house: Rocky Mount, Fayetteville, Wilson, Burlington
Cost of living index: 94.9

>> Browse North Carolina investment properties

Macro trends to watch in 2021

The housing market in 2020 was characterized by low interest rates with more demand than supply. Will next year be more of the same, or something completely different?

While there's no such thing as a crystal ball, there are several macro trends that investors can monitor to help predict how the housing market will perform in 2021:

Migration of people to the suburbs and smaller secondary markets, as the COVID-19 pandemic normalized work-from-home
Monetary policy and the effect on mortgage interest rates
Economic growth and gross domestic product
Consumer confidence and changes in the job market
Average median home price and affordability
Existing and new home sales
Homeownership vs. renter-occupied rate
Single-family housing starts and overall supply of housing
Markets that make sense for real estate investing

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