Low Home Prices, Lower Taxes: Why These Underrated States Are a First-Time Buyer’s Dream
Finding an affordable place to live in the United States has been a serious challenge this decade, as home prices have soared to record highs and stubbornly high inflation continues to put a strain on household budgets.
Overcoming that challenge might mean moving elsewhere. That’s especially true if you’re a first-time homebuyer in search of cheap homes and lower-than-average property taxes.
Here’s a look at 10 states that check most of the right boxes, although they fly under the radar when it comes to desirable housing markets.
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1. Iowa
Median home sale price (as of 2025): $230,000
Property tax rate: 1.33%
Although Iowa’s property tax rate is above the national average, it boasts the lowest median home sale price in the country, according to PropertyShark. Most new residents are moving to the Des Moines metro area, attracted by well-paying jobs, good schools and an affordable cost of living.
2. Alabama
Median sale price: $234,000
Property tax rate: 0.37%
Alabama boasts some of the lowest home prices and property taxes in the U.S., which has contributed to a growing population in both small towns and mid-sized cities such as Huntsville and Tuscaloosa.
3. Oklahoma
Median sale price: $242,000
Property tax rate: 0.79%
Oklahoma's median sale price rose $10,000 year-over-year, but it still remains more affordable than other states in the South-Central region of the country. Most new residents are moving to the Oklahoma City and Tulsa metro areas.
4. West Virginia
Median sale price: $242,000
Property tax rate: 0.51%
West Virginia's median sale price fell by $4,000 year-over-year as the state continues to lose residents. A government-backed partnership aims to reverse the trend by offering workers $12,000 if they relocate to the Mountain State.
5. Louisiana
Median sale price: $256,000
Property tax rate: 0.55%
Louisiana’s median sale price rose $9,000 compared to the previous year. On the plus side, it has lower-than-average property taxes and a 0% real estate transfer tax.
6. Indiana
Median sale price: $267,000
Property tax rate: 0.76%
Indiana’s median home price rose $7,000 year-over-year but remains one of the cheapest states in the country to buy a home. Popular metro areas like Fort Wayne and Indianapolis have seen housing market conditions cool from the previous boom years.
7. Mississippi
Median sale price: $268,000
Property tax rate: 0.58%
Mississippi's population remained mostly flat for the past decade, though it recently has seen growth in coastal areas and cities like Memphis and Jackson. Cheap home prices and property taxes are a big allure to new residents.
8. Arkansas
Median sale price: $270,000
Property tax rate: 0.56%
Arkansas’s home prices have been moving higher in recent years amid a 3% population increase since the beginning of the decade. Much of the growth is concentrated in the northwest part of the state, where residents are drawn to cheap living costs, strong job growth and rising incomes.
9. Kentucky
Median sale price: $271,000
Property tax rate: 0.74%
In addition to affordable property taxes, Kentucky also boasts a low 0.1% real estate transfer tax rate. The Bluegrass State has seen positive migration inflow, mainly in the Louisville and Lexington metro areas.
10. Missouri
Median sale price: $274,000
Property tax rate: 0.89%
Missouri saw a $24,000 year-over-year gain in median home prices — the largest among the 10 best-priced states for homebuyers. Even so, the Show Me State’s 0% real estate transfer taxes and below-average property tax rate make it very affordable.
Editor's note: The home prices listed below — all of which are much cheaper than the national median of $410,700, per the Federal Reserve Bank of St. Louis — come from a recent PropertyShark analysis. Property tax rates are from the Tax Foundation and reflect effective rates as of 2024. The national median is about 0.99% of a home’s assessed value.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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