Are you looking to get the most value and space for your money when buying a new home?
We also share where you’ll find the most prime opportunities for first-time homebuyers (spoiler alert: Virginia is one of them) and we’ll let you know why.
There are plenty of articles out there that focus on the cheapest states to buy a house in the US, but we wanted to go a few steps further. We’ve taken a deep dive into a range of the very latest data, to bring you insights across a variety of key metrics.
We’ve analyzed data that has been manually drawn from Zillow, the leading real estate and rental website in the United States (according to monthly website visits)*. As of October 2021, Zillow reportedly receives approximately 36 million unique visitors every month.
So, where are the cheapest places in America to buy a house in 2022? Here is an exclusive insight into the essential trends and statistics that contribute towards each state’s ranking.
If you’re looking for the best value for your money, there are specific metrics you’ll want to consider. Not only do you want to look at property price but, you’ll need to look at average square footage, average price per that square footage, and property build year as well.
This is going to be important because good value means that you’re getting a property with good space at an affordable price, while not breaking your pockets on renovation costs.
We’ve used three-bedroom property data across the board for accurate comparisons. Based on the average median home price of a three-bedroom property, the average size, and the average build date of properties in each state, we’ve arrived at this list of the top five states offering the most overall value for your money**.
Despite coming in at number 21 for the cheapest state to buy a house in the country ($316,141 is the average price for a three-bedroom property), Arkansas takes the top spot for overall value for money.
It is the eighth-cheapest state for average price per square foot ($144), and first for the newest average build date (2013). It also comes in third for the state offering the greatest average square footage for three-bedroom homes (2,131).
Arkansas also tops the list of states with the lowest costs of doing business. Having multiple strong economic sectors, such as agriculture, forestry, and food processing pushes this state to the top of our list for affordable living and a great place for business. The tourism industry has seen a boost during the past five years as well.
The thirteenth cheapest state by average property price ($265,353), North Dakota is another great option for affordable homes and value for money, with the fifth largest property size average (2,022 sq. ft) and the third-cheapest average price per square foot ($133).
Not only does North Dakota offer affordable living, but it tops the list of happy states. With good employment rates, lower property taxes and cost of living rates, it’s no wonder that this state tops the list for desirable states to live in. Lower cost of living rates ultimately make it easier to afford a mortgage.
Another of the southern states steeped in agricultural history, Louisiana’s largest industries are now the manufacturing of petroleum and coal products. Unfortunately, it has one of the weakest economies in the country, but still has the 16th lowest (state-by-state) cost of living.
Louisiana ranks eleventh for average cheapest three-bedroom property price ($263,955), and tenth for cheapest price per square foot ($158).
The average build year for properties in Louisiana is 1997, which bumps the state into the top five for overall value for money when taking the general age of three-bedroom properties into consideration.
Indiana is the fifth cheapest state by average property price alone ($246,738), and seventh for the most affordable average price per square foot ($143). Property build dates are a little older, averaging 1970.
The Hoosier state also boasts a low cost of living, a growing automotive industry, and plenty of job opportunities. Hoosiers, residents of Indiana, enjoy low state income tax rates as well as constitutionally protected caps to property taxes in one of the cheapest states to live in America.
Mississippi takes the top spot for the cheapest average property price of all states ($205,153), as well as for the cheapest average price per square foot ($113). The average property build year is 1969.
The state of Mississippi offers a low cost of living (the lowest of all US states), mild winters, and that quintessential southern charm, although the economy is a little lackluster; no great surprise given that it is the cheapest place to live in the United States.
Having outlined the top five states for overall property value for money, it's time to take a deeper dive into the data analysis.
This category of data focuses on typical home prices alone for a three-bedroom property.
|State||Average 3-Bedroom Property Price|
As you can see from the table above, the top five cheapest states to buy a three-bedroom property are Mississippi, West Virginia, Iowa, Kansas, and Indiana.
From there, the states that offer average three-bedroom property prices below the $300,000 mark are Kentucky, Missouri, Ohio, Alabama, New York, Louisiana, Pennsylvania, North Dakota, Oklahoma, Nebraska, and Georgia.
West Virginia narrowly missed making it into the top overall value-for-money ranks, coming in seventh, because it is one of the states with the smallest average square footage for three-bedroom properties (coming in 43rd with 1,691 average sq.ft).
Its average property build year is mid-range, coming in 25th at 1976. Nevertheless, the state places second for the cheapest average price per square foot ($130), so it certainly can’t be overlooked for super affordable housing options.
Iowa also failed to be featured in our top five value-for-money states (coming in 27th) despite its cheap average price. This is due to a combination of having one of the lowest average three-bedroom square-footage figures (coming in 48th with 1,602) and having an older average build date of 1965.
Again, certainly not a state to be overlooked for general affordability and cheap property prices. The average price per square foot of a three-bedroom home in Iowa is $153 (13th).
Not surprisingly, Hawaii, with its sandy beaches and relaxed vibes takes gold for the most expensive average property price of all states, and by a considerable margin too. California comes in second position, while Rhode Island takes the third spot. Other states where average property prices exceed the $500,000 threshold are Washington, Massachusetts, the rolling hills of Colorado, Montana, and Idaho, Nevada, Utah, Wyoming, Oregon, Arizona, and New Hampshire.
Hawaii is also the most expensive state by average property price, with the highest price per sq ft in the US at $800 per square foot. The average house build date in Hawaii is 1973.
All except one of the cheapest states by average property price feature less than 4% water by area, with the exception being New York (14%). This supports the correlation between waterfront properties and significantly higher average property prices.
Other than New York, of the top 24 states with the cheapest property prices, only four feature 10% or more by area of water. They are: North Carolina (10%), Maine (13%), Wisconsin (17%), and Louisiana (18%).
The 25th cheapest state for three-bedroom property prices is Michigan, which has more water than any other state (42%). While Michigan is known for its lakefront properties, the state's average (three-bedroom) property size is relatively small at 1,562 sq. ft., and their average build date is 1969.
When it comes to a correlation between expensive property averages and a prevalence of water, Hawaii, Rhode Island, and Massachusetts are all in both the top five highest property price states as well as the top five states for the highest percentage of water.
Hawaii’s total area is 41% water, Rhode Island’s is 33%, and Massachusetts features 26% water, making them particularly popular with luxury waterfront buyers.
Many of the states with the more expensive home prices feature 10% water or less, except New Jersey, which is the 14th most expensive state for average three-bedroom price but has 16% water.
The average state-by-state population density in the US is 174 people per square mile. Of the top 10 states offering the cheapest average property prices, six have a population density of below 100 people per square mile, and seven are below the US state average.
The three states featured in the top 10 for cheapest three-bedroom housing prices in addition to having above average population densities are Indiana (186 people/sq. mile), Ohio (263 people/sq mile), and New York (370 people/sq. mile).
Conversely, of the 10 states with the most expensive three-bedroom property averages, five have more than 100 people per square mile, and four are above the national state average.
Hawaii and California have 133 and 242 people per square mile, respectively, while Massachusetts and Rhode Island are considerably above the national average, at 666 and 710 people per square mile, respectively. These states are also some of the most expensive states to live in as per the cost of living index.
|State||Average 3-Bedroom Square Footage|
As you can see from the table, the top 10 states offering the largest average three-bedroom property size are Rhode Island, Wyoming, Arkansas, Utah, North Dakota, Colorado, New Hampshire, Montana, Vermont, and Connecticut.
Interestingly, Rhode Island, Connecticut, New Hampshire, and Vermont are the first, third, fifth, and sixth (respectively) smallest states by total land area, yet offer up the largest three-bedroom properties in the country.
However, the other states with the largest average properties fall between the 22nd and 48th largest states by land area, leading to an overall inconclusive correlation.
Rhode Island and Connecticut are also the second and fourth states for highest population density (710 and 651 people per square mile respectively), making it even more remarkable that they represent some of the largest three-bedroom property options despite being smaller and more densely populated states.
When it comes to the states with the smallest average three-bedroom square footage, Hawaii tops the list, followed by Michigan, Iowa, California, and New York.
Of these five, all except Iowa are in the top half of the country's most densely populated states, although no correlation appears between these states regarding average property sizes and total state land areas.
In terms of any relationship between average property sizes and build dates, the 10 states that feature the largest average three-bedroom property sizes have a combined average build year of 1978.
The 10 states with the smallest average property sizes have a combined build year of 1972. Overall, the average sq ft of a house in the US is 1,796 sq ft.
|State||Average Price Per Sq Ft|
As you can see from the above table, the states offering the lowest US average price per square foot are Mississippi, West Virginia, North Dakota, Kansas, and Ohio. Meanwhile, the states asking the highest average price per square footage of three-bedroom properties are Hawaii, California, Washington, Massachusetts, and Rhode Island.
When it comes to three-bedroom property size value for money, the state-by-state average is $231 per square foot. This means that 33 states come under the national average for three-bedroom property size value for money. Mississippi is the state with the cheapest real estate in the US for three-bedroom properties as well as offering the best price per square foot in the US.
|State||Average 3-bedroom Property Build Year|
Arkansas takes the top spot for the state with the most recent average property build year of 2013, followed by Louisiana, Arizona, Idaho, Nevada, Utah, and South Carolina, all coming in with average build dates of 1992 or later.
Six of the 10 states with the most recent average property build year fall within the 20 most expensive states by price per square foot.
While the states that feature some of the oldest homes for sale in America may represent opportunities to buy architecture of historical significant, generally speaking, the newer the average build date, the more value for money available regarding features and maintenance. Ohio is the state with the oldest average three-bedroom property build year, followed by New York, New Jersey, Massachusetts, Pennsylvania, and Maine, all averaging 1959 or later.
But are the states with the oldest houses in the US also the cheapest place to buy a house? Of these five states, only two (Ohio & Maine) surprisingly fall within the top six for cheapest average price per square foot of (three-bedroom) property.
Naturally, many of the states with the most affordable homes are also those in which one or more aspects of the economic climate are less than ideal.
Mississippi, for example, is the cheapest state for average property price as well as value for money by price per square foot, yet those employed within the state earn an average weekly wage of $810, and the unemployment rate is 8.1%.
West Virginia also represents some of the most affordable housing options; however, average weekly wages are low ($913) and the unemployment rate is 8.3%.
Ohio bucks the trend, with one of the country’s most buoyant job markets and a reasonable median household income, with an average weekly wage of $1,040, despite also being one of the most affordable states to live in and buy property. The top five most affordable places to live in the US are Mississippi, Kansas, Oklahoma, Alabama, and Georgia.
The most robust state economies include Colorado, Massachusetts, and California, which, not surprisingly, have some of the most expensive housing costs and more expensive homes.
While the data presented shines a clear light on the cheapest (and most expensive) states in which to buy a house, many prime opportunities lie in the mid-ranges of the data.
Some of the states that fall just outside of top-10 statistics, for example, are still relatively affordable, especially in relation to the strength of the economy they benefit from.
With an average property price of $339,037 and an average price per square foot of $184—well below the national average—Minnesota has a great deal going for it.
With an unemployment rate of 6.2% and a healthy average weekly wage of $1,178, the North Star State represents prime opportunities for affordable property investment and career paths.
The Twin Cities of Minneapolis and St. Paul are hotbeds for Fortune 500 companies and other retail giant headquarters.
Minnesota is also home to the world’s largest mall, Mall of America, as well as some of the most beautiful scenery you could imagine for outdoor activities. Economically, it’s a great choice, so long as you can brave the winters.
When it comes to job opportunities in Virginia, most people immediately think of IT positions, and for good reason.
Across the river, the D.C. Metro area is home to the most concentrated tech experts in the U.S. after San Francisco, and in Fairfax County, one in every four jobs are related to tech.
Following Amazon’s lead to locate their headquarters in Northern Virginia, many big tech companies are following suit, and now aerospace giant Boeing has announced that it will relocate its headquarters to Arlington, which has given the housing market a significant boost.
That said, Virginia is much more than a leading tech hub with strong economic growth potential. With an unemployment rate of just 6.2% and a strong average weekly wage of $1,201, the wealth of job opportunities and affordable cost of living index supports the state’s growing real estate sector. At $318,579, average three-bedroom property prices are still well below the national average of $415,582, as is the price per square foot of $195.
You can still get your hands on very affordable real estate in Virginia and enjoy the inevitable capital growth driven by the state’s robust, dynamic economy. The state capital of Richmond is also particularly affordable for an east coast state.
Specifically Northern Virginia is an excellent place to live, with its close proximity to the nation’s capital and mix of historical charm. Some of the most popular communities offering great options for home buyers include Alexandria, Falls Church, Reston, Annandale, and Springfield.
Connecticut is another great example of a state that flies under the radar when it comes to data extremes, yet it offers up a world-renowned lifestyle and strong economic conditions. The unemployment rate is 7.9%, and the average weekly wage sits at a cool $1,383.
Its proximity to Boston and New York City life are an obvious draw, allowing residents to access the perks of the big city while enjoying a slower pace away from the hustle and bustle.
Connecticut’s average (three-bedroom) property price also falls a little below the state average at $406,784, as well as the average price per square foot at $217.
Financially speaking, the primary drawback to living in Connecticut is the high cost of living, which can of course affect your ability to cover your monthly mortgage payment. Still, depending on your vocation or career path, the state presents many opportunities that can justify it.
So there we have it: our data analysis shows the US states offering affordability and value for money, including average property square footage and price per square foot., and average property build date. Finding the best overall value-for-money can of course take more than
Of course, where you choose to buy a house or property depends on your financial situation and what you can afford, your lifestyle, and your personal goals, but we hope this information is helpful.
If you want to buy a house or an investment property in Northern Virginia, get in touch with our experts at (703) 462-0700.
You can also get a property valuation for your Northern Virginia home here.
View our available properties here.
*Average property prices per state and the other data points we have shared (average build date, average price per sq ft etc.), were calculated through analyzing properties available for sale on Zillow in each American state as of 05/28/22. We have selected the first 200 'newest' properties available for sale in each state to analyze, to give a rough but fair assessment of average property sale price and other data points in each American state.
**For our top ‘value for money’ states, we have ranked each American state for the following categories: Average (three-bedroom) property prices, square footage, price per square footage and build dates, and added them together to arrive at an overall 'value-for-money' score.
Every month a number of organizations and websites publish house price indices, each based on different data. Sometimes the findings agree, sometimes they vary widely. We’ve manually analyzed property data from Zillow, the leading real estate and rental website in the United States according to monthly site visits. However, it is important to note that this report looks at averages to give a more accurate sense of the total scope of data, while understanding that a median data set would not be skewed by unusually high or low sale prices.
A current look at the average property price per state will always be skewed by changes in the types of properties sold month-on-month, so this report is primarily released to inform interested parties of research on the current U.S. property market and to encourage discussion.