The Most Affordable States in the U.S. in 2026

Key takeaways

• Iowa, Indiana, and Oklahoma are the most affordable states in the U.S., where monthly housing payments take about 26% of local incomes.
• The cheapest states are generally clustered in the Midwest and South, thanks to plenty of space and historically slower population growth.
• Nearly every housing market in the country is slowly becoming more affordable, but housing is still largely out of reach for median earners.

The U.S. is in the midst of a housing affordability crisis that has priced many would-be homebuyers out of the market and kept many homeowners from selling, affecting everything from spending habits to the concept of the American Dream. Housing costs have consistently reached new highs since the pandemic due to elevated mortgage rates and record prices. 

As a result, there has been very little activity from buyers and sellers, with those still in the market often searching for homes in the few remaining affordable places to live. During the pandemic, many of these buyers chose the Sun Belt—primarily cities in Florida, Arizona, and Texas—for its lower costs and nicer weather. However, as demand pushed home prices higher in many of those markets, migration patterns began to shift. Today, buyers looking for affordability are increasingly finding it in other parts of the country, particularly the Midwest. 

So, where are homes most affordable today, and where are costs improving the fastest? Here’s what the data shows.

The 10 most affordable states in the U.S.

Iowa, Indiana, and Oklahoma are the most affordable states in the country. Locals making typical wages have to spend around 27% of their income on housing every month—below the 30% threshold most experts recommend. Ohio (27.9%) and Louisiana (28.3%) round out the top five.

Zooming out further, only 14 out of the 50 states meet the 30% benchmark, with every single one located in the Midwest or South. Homes in Midwestern and Southern states are generally more affordable because space is easier to find and homebuilding has largely kept up with demand. Plus, most haven’t seen the tech booms and population spikes that hit the coasts in the 2000s.

The most affordable cities in the country are all located in these states, too: Oklahoma City (25.4% of income), Indianapolis (26.0%), and Baton Rouge (26.0%) are among the cheapest places overall.

Importantly, while these areas meet the benchmark for affordability, they have become significantly more expensive in recent years.

States where affordability is improving the most

Relative to incomes, housing costs are falling nearly everywhere in the country. The housing market is slowly recovering from the pandemic shock that sent prices soaring as buyers and sellers fought over a dwindling number of listings. Buyers are holding off and inventory is creeping up, helping affordability improve.

However, even though these states offer the most affordable housing, that doesn’t mean locals have an easy time making ends meet. “Costs climbed dramatically during the pandemic and have only marginally dropped since, keeping a significant share of locals priced out of the market,” noted Daryl Fairweather, Redfin Chief Economist. “Since 2020, the share of income a median-earning American household has to spend on housing has climbed from 23% to over 34%, while many states have jumped even more. High mortgage rates are also pricing out buyers, but those rates are determined by inflation and economic growth. What we can control is the permitting and zoning of housing, and it will take a concerted effort to make the policy changes necessary to increase supply and bring down housing costs.”

>> Read: The Most Affordable Cities in the U.S. in 2026

Will house prices ever go down?

Home prices don’t necessarily have to fall for housing to become more affordable. Affordability can also improve when incomes rise, mortgage rates fall, or home prices grow more slowly than wages. In fact, as the data above shows, housing costs relative to incomes are already improving in parts of the country.

There are some places where home prices have fallen outright, though. Austin and San Antonio, for example, saw prices surge during the pandemic as buyers flocked to relatively affordable Sun Belt metros. As demand cooled and inventory increased, prices came down from their peaks—by $142,000 in Austin and $30,000 in San Antonio.

Nationwide, Redfin economists don’t expect a significant drop in home prices. Instead, they expect affordability to gradually improve as the housing market continues to rebalance. The relative cost of buying a home could return to “normal” in the next few years, barring a major economic shock.

>> Read: When Will House Prices Go Down?

Methodology

Rankings expand on a June 2026 Redfin analysis of housing affordability by analyzing all 50 U.S. states. The analysis focused on the share of income a median-earning resident would need to spend every month to afford a typical for-sale home. A state was considered “affordable” if its monthly payment required no more than 33% of statewide median monthly earnings, assuming a 20% down payment, typical taxes and fees, and a 30-year mortgage. States with the lowest monthly income requirements ranked as the most affordable.

All data came from a Redfin analysis of MLS, U.S. Census, and Atlanta Fed data.