The 20 cheapest states to live in 2026 are led by Oklahoma, Alabama, Iowa, West Virginia, and Kansas, according to the latest MERIC Cost of Living Data Series for the second quarter of 2026. Oklahoma comes in 17% below the national average. North Dakota ranks #14 at 90.5, making it cheaper to live in than every state it borders.
What are the 20 cheapest states to live in for 2026?
Here is the full top 20 from MERIC's newest quarterly release, which averages price data collected by the Council for Community and Economic Research (C2ER) across participating cities. The U.S. average is 100, so a score of 90 means everyday costs run about 10% below the national average.
| Rank | State | Overall | Below U.S. | Housing | Utilities |
|---|---|---|---|---|---|
| 1 | Oklahoma | 83.0 | 17.0% | 65.1 | 97.6 |
| 2 | Alabama | 86.0 | 14.0% | 68.6 | 94.1 |
| 3 | Iowa | 86.1 | 13.9% | 70.6 | 81.7 |
| 4 | West Virginia | 87.0 | 13.0% | 69.9 | 93.3 |
| 5 | Kansas | 87.1 | 12.9% | 78.7 | 96.0 |
| 6 | Mississippi | 87.4 | 12.6% | 70.8 | 97.4 |
| 7 | Missouri | 88.2 | 11.8% | 77.7 | 94.0 |
| 8 | Arkansas | 89.0 | 11.0% | 76.9 | 98.7 |
| 9 | Indiana | 89.7 | 10.3% | 77.5 | 92.7 |
| 10 | Tennessee | 89.7 | 10.3% | 80.0 | 88.0 |
| 11 | Georgia | 90.1 | 9.9% | 77.6 | 98.0 |
| 12 | Nebraska | 90.1 | 9.9% | 76.5 | 89.4 |
| 13 | New Mexico | 90.2 | 9.8% | 82.4 | 79.4 |
| 14 | North Dakota | 90.5 | 9.5% | 77.0 | 82.9 |
| 15 | Texas | 90.8 | 9.2% | 77.2 | 100.6 |
| 16 | Louisiana | 91.3 | 8.7% | 81.3 | 85.8 |
| 17 | Michigan | 92.1 | 7.9% | 82.9 | 98.1 |
| 18 | South Carolina | 92.7 | 7.3% | 79.5 | 95.4 |
| 19 | Ohio | 93.0 | 7.0% | 85.8 | 96.3 |
| 20 | Minnesota | 93.4 | 6.6% | 79.1 | 95.4 |
Source: MERIC / C2ER, Q2 2026. Index: U.S. average = 100. Lower is cheaper.
The pattern is not subtle. The top 20 is almost entirely the Midwest, the Plains, and the South. At the other end sit Hawaii (185.8), Massachusetts (148.1), and California (140.3).
If you are relocating on a budget, the gap between a top-20 state and the coasts is not a few percent. Moving from California (140.3) to North Dakota (90.5) lowers the cost of the same basket of goods and services by roughly a third.
Why does housing decide which states are cheapest?
Look down the columns and the answer jumps out. Groceries barely move across the top 20, landing between roughly 94 and 99 almost everywhere. Housing is where the ranking is won or lost: every top-20 state scores below 86 on housing, while Hawaii scores 302.6 and Massachusetts 213.2.
That is why Oklahoma leads. Its housing index of 65.1 is the lowest in the country, and it drags the whole composite down even though its utility costs sit close to average.
A state's overall rank is mostly a housing rank. Before you pick a place off a list, get real numbers on what you would pay to own or rent there.
Where does North Dakota rank for cost of living in 2026?
North Dakota lands at #14 with a composite of 90.5, and the more telling number is how it stacks up against the states around it.
| State | Rank | Overall | Housing | Utilities |
|---|---|---|---|---|
| North Dakota | 14 | 90.5 | 77.0 | 82.9 |
| Minnesota | 20 | 93.4 | 79.1 | 95.4 |
| South Dakota | 21 | 93.5 | 86.3 | 84.5 |
| Montana | 37 | 106.0 | 114.9 | 80.7 |
Source: MERIC / C2ER, Q2 2026.
Utilities are a quiet strength: North Dakota's 82.9 is the third lowest in the top 20, behind only New Mexico and Iowa. Montana is the real contrast. It scores nearly 38 points higher on housing, which is why it ranks 37th overall despite cheap utilities.
To be straight with you, not every category favors us. North Dakota's health index is 106.7, above the national average, so budget for that honestly.
If you are weighing the Northern Plains, North Dakota is the least expensive option in its region, with housing and utilities doing most of the work.
What doesn't a cost of living index tell you before you move?
The index measures prices, not taxes or wages. Three things it leaves out matter a lot in North Dakota.
Income tax. North Dakota's top individual rate is 2.5%, tied for the lowest top rate among states with an income tax, and the state ranks #11 overall in the Tax Foundation's 2026 State Tax Competitiveness Index.
Property tax relief. Homeowners can claim the Primary Residence Credit of up to $1,600 a year, with no age or income limit. Lawmakers also capped local property tax budget growth at 3% a year, and the state reports the credit wiped out property taxes entirely for roughly 50,000 households.
Local variation. A statewide score is an average of the cities that report prices. Williston, Watford City, and the rest of the Bakken move with oil activity, so a specific town can run hotter or cooler than the state figure at any given time.
For a North Dakota homeowner, the real advantage is bigger than the 90.5 suggests, because low income tax and the $1,600 credit sit on top of it. Apply for the credit every year between January 1 and April 1.
Does a low cost of living make a state good for real estate investing?
A lower cost basis helps, but it is only half the equation. Rents, occupancy, and resale all depend on whether people have a reason to live and work there, which in Western North Dakota means energy, agriculture, and the trades that support them.
The same logic applies beyond houses. An operator pricing shop or industrial space, an investor looking at a small multifamily building, or a buyer eyeing land all benefit from lower carrying costs, but only if the local demand is real.
Use cost of living rankings to shortlist a market, then underwrite the specific property on local rents, vacancy, and job trends.
Frequently asked questions about the cheapest states to live
What is the cheapest state to live in 2026?
Oklahoma is the cheapest state to live in as of the second quarter of 2026, with a cost of living index of 83.0, about 17% below the national average. Its housing index of 65.1 is the lowest in the country.
What is the most expensive state to live in 2026?
Hawaii is the most expensive at 185.8, nearly 86% above the national average. Massachusetts (148.1) and California (140.3) follow, all driven mainly by housing costs.
Is North Dakota a cheap state to live in?
Yes. North Dakota ranks #14 with an index of 90.5, about 9.5% below the national average, and is cheaper than Minnesota, South Dakota, and Montana. Housing and utilities are the biggest reasons.
Is North Dakota cheaper to live in than Montana?
Yes, by a wide margin. North Dakota's overall index is 90.5 versus Montana's 106.0, and North Dakota's housing index is 77.0 versus Montana's 114.9.
How is the cost of living index calculated?
MERIC averages C2ER price surveys from participating cities in each state across six categories: groceries, housing, utilities, transportation, health, and miscellaneous goods and services. The U.S. average is set at 100, so each score reads as a percentage above or below it.
Does the cost of living index include taxes?
No. The index tracks prices only, so income tax, property tax, and wages are not included. That is why North Dakota's low income tax and $1,600 Primary Residence Credit make it more affordable than its rank alone shows.
Which region has the cheapest states to live in?
The Midwest, the Plains, and the South. All 20 of the cheapest states in the Q2 2026 data come from those regions, while Hawaii, the Northeast, and the West Coast fill the most expensive spots.
The list will reshuffle a little every quarter, but the lesson does not change: housing sets your cost of living, and North Dakota delivers the lowest housing and utility costs in its region with one of the lightest tax loads in the country. Start with the state number, then let someone who knows the ground price the actual town and the actual property.
EP
Proven Realty brokered by eXp
Thinking about a move to Western North Dakota?
Tell me what you want to buy, sell, or invest in, and I will give you real local numbers, not a statewide average.
Talk to Proven Realty
