Are you looking to buy a home without spending your life’s savings? Housing news in 2025 alludes to expensive and outpriced markets — but some of America’s lowest-cost cities are located in value hotspots with low-cost housing fees, ample supply, and modest price-income ratios. From Midwestern towns to Southern cities, they’re among the cheapest states to buy a house in America.
Whether you’re a first-time buyer, an investor, or just looking to move, our list of the cheapest 10 states to buy a home this year will help you find the best places to find a deal in 2025.
| State | Median home value | For sale inventory | New listings | 1‑year value change |
|---|---|---|---|---|
| West Virginia | $169,928 | 4,061 | 1,507 | +2.3% |
| Mississippi | $190,585 | 10,325 | 2,624 | +1.0% |
| Arkansas | $220,013 | 15,080 | 3,944 | +0.8% |
| Kentucky | $224,733 | 14,618 | 5,066 | +5.6% |
| Alabama | $234,052 | 23,681 | 6,345 | +0.4% |
| Indiana | $253,628 | 21,403 | 8,791 | +3.0% |
| Missouri | $262,355 | 23,848 | 9,025 | +2.3% |
| Michigan | $262,317 | 30,620 | 13,170 | +2.5% |
| Ohio | $242,897 | 29,447 | 13,853 | +3.4% |
| Iowa | $232,796 | 12,072 | 4,315 | +2.8% |
| Source: Zillow, as of June 30, 2025 | ||||
What Makes a State Affordable for Homebuyers?
State-level affordability typically includes a mix of an affordable median price of housing units, moderate living expenses, and ample inventory supply. For instance, my top picks, West Virginia and Mississippi, have median prices of less than $200,000 — and their relatively low for-sale inventory maintains competition under control. Meanwhile, Indiana and Missouri permit larger inventory amounts — at least 20,000 active listings — providing more options and more negotiating room.
Stable or positive 1-year value changes, like Kentucky’s, with a 5.6% change, and Michigan, with its positive 2.5% change, exhibit strong appreciating markets in these states. With prices firmly set near surrounding wages and a tight supply and demand, housing is more affordable for both first-time buyers and investors.
1. West Virginia
Median home price: $169,928
For sale inventory: 4,061
1-year value change: +2.3%
In 2025, West Virginia remains the cheapest state to buy a house. Housing costs in the state are the lowest in the nation, and with a general level of living that’s much lower than the national average, it makes for a great place to find an affordable home. Despite a highly rural and less diversified state economy, areas near college towns or state government centers, such as Morgantown and Charleston, may be ideal for buyers seeking primary residences or potential investment properties.
2. Mississippi
Median home price: $190,585For sale inventory: 10,3251-year value change: +1.0%
Mississippi stands out as one of the lowest-cost states for property purchase. The juxtaposition of affordable houses with low taxation makes it attractive for retirees, first-time property owners, and investors. Gulf coastal cities like Gulfport and Biloxi are also attractive to buyers looking for affordable coastal residences. However, it is vital to consider insurance and climatic resilience while assessing properties near the coastline.
3. Arkansas
Median home price: $220,013For sale inventory: 15,0801-year value change: +0.8%
One of the cheapest places to buy a house among the southern states that combine affordable land prices with a relatively stable economic climate is Arkansas. Cities like Little Rock and Fayetteville offer job growth, especially in healthcare and education.
Meanwhile, investors who want to park their funds in the state can benefit from low tax rates along with rising suburban populations. Price appreciation rates for properties remain average, classifying it as a low-risk investment for long-term investors.
4. Kentucky
Median home price: $224,733For sale inventory: 14,6181-year value change: +5.6%
Kentucky is one of the cheapest places in America to buy property, especially in the cities of Louisville and Lexington. Its economy is supported by multiple stable industries like logistics, healthcare, and education, making it a good place to live. Homeownership is promoted through competitive pricing and an adequate supply of housing. Many rural and semi-urban areas have high rental yields with minimal initial investment demands.
5. Alabama
Median home price: $234,052For sale inventory: 23,6811-year value change: +0.4%
With housing prices under $250K and a low cost of living, Alabama continues to attract buyers across the Southeast. More popular metro areas like Huntsville and Birmingham are showing increased job expansion and steady property demand. Investors may find upside in suburban neighborhoods experiencing population growth and infrastructure upgrades.
6. Indiana
Median home price: $253,628For sale inventory: 21,4031-year value change: +3.0%
Indiana’s real estate market offers home buyers budget-friendly options, especially in mid-sized cities like Fort Wayne and Evansville. The state has growing logistics and manufacturing sectors that will support the housing demand, while steady price appreciation gives investors room for long-term equity growth. Home prices remain well below national levels, even in Indianapolis, making it one of the cheapest states to buy a house.
7. Missouri
Median home price: $262,355For sale inventory: 23,8481-year value change: +2.3%
Missouri has important benefits for both urban and rural areas. St. Louis and Kansas City, for instance, provide consumers with a range of affordable housing options and a diverse job market. Missouri’s lower property taxes and cost of living make it an attractive option for price-conscious home buyers and yield-focused investors seeking stable rental demand.
8. Michigan
Median home price: $262,317For sale inventory: 30,6201-year value change: +2.5%
The Michigan real estate market is open to a lot of possibilities for homebuyers and property investors. In fact, cities like Detroit and Flint rank as some of the cheapest places to buy a house in America. With higher vacancy levels in some areas, potential buyers might benefit in negotiations. As more revitalization projects become popular, specific neighborhoods offer affordable entry points combined with potential long-term gains.
9. Ohio
Median home price: $242,897For sale inventory: 29,4471-year value change: +3.4%
Ohio continues to draw buyers due to a combination of affordable housing costs and strong economic trends in major cities like Columbus, Cleveland, and Cincinnati. The state’s balanced market conditions, as well as its diverse industrial bases, allow for stable investment options. Suburban areas that maintain affordability near core metropolitan areas also remain popular among both buyers and renters.
10. Iowa
Median home price: $232,796For sale inventory: 12,0721-year value change: +2.8%
Iowa is a prime example of good housing prices with low unemployment levels and steady appreciation of properties. Cities like Cedar Rapids and Des Moines display a strong workforce and affordable living. Moreover, the state reflects a strong housing market, with scarce competition and steady demand for single-family rental houses.
Frequently Asked Questions (FAQs)
What is the cheapest state to buy a house in 2025?
West Virginia holds the top spot for affordability with a median home price under $170,000 and a cost of living well below the national average. The state also offers pockets of opportunity in college towns and areas seeing infrastructure investment, which could support long-term property value growth.
Are cheap home prices a sign of a bad market?
Not necessarily. Low prices can be tied to regional income levels, slower population growth, or high inventory — which don’t really point to a weak market. Some low-cost markets are seeing revitalization efforts or population rebounds, making them more attractive to buyers seeking future appreciation.
Should I invest in real estate in these low-cost states?
These states can be attractive for investors seeking lower upfront costs and solid rental yields. Still, it’s important to conduct local market research — such as employment trends and housing demand — before committing capital in unfamiliar or rural areas. While price is definitely a good factor to check, it’s best to support it with data on job development, market condition stability, and general property conditions.
The post The 10 Cheapest States to Buy a House in 2025 appeared first on The Close.