The 10 Most Affordable Cities With High Salaries and Low Cost of Living in the Midwest

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

If you're looking for an inexpensive place to live, you shouldn't have any trouble finding one in the Midwest. This region has quite a few cities with low costs of living. Housing, in particular, tends to be much cheaper than the national average here.

Cost of living is only one factor, though, as a city's typical wages are also an important factor. On this list, we'll go over the top 10 most affordable cities in the Midwest.

The 10 most affordable places to live in the Midwestern United States

This ranking of the most affordable cities is based on an estimated income-to-expense ratio. The Ascent calculated it by comparing median household incomes with cost-of-living data. The higher a city's estimated income-to-expense ratio, the more affordable it is.

Affordability ranking City Estimated income-to-expense ratio Cost-of-living estimate Median household income
1 Hastings, Nebraska 1.342 $61,306 $82,258
2 St. Paul, Minnesota 1.339 $65,322 $87,433
3 Minneapolis, Minnesota 1.321 $66,192 $87,433
4 Des Moines, Iowa 1.289 $57,558 $74,208
5 Dubuque, Iowa 1.252 $60,369 $75,590
6 Sioux Falls, South Dakota 1.240 $61,239 $75,946
7 Kalamazoo, Michigan 1.198 $51,869 $62,128
8 Columbus, Ohio 1.197 $60,034 $71,839
9 Omaha, Nebraska 1.191 $61,908 $73,720
10 Pittsburg, Kansas 1.182 $56,822 $67,160
Data source: The Motley Fool Ascent calculations.

To calculate the cost-of-living estimate, each city's cost-of-living index from the Council for Community and Economic Research was multiplied by national median household expenditures. After that, each city's median household income was divided by that cost-of-living estimate to get an estimated income-to-expense ratio.

The income-to-expense ratio is a measurement of how a city's median income compares to its cost of living. A higher score means residents have more income left over after paying bills, on average.

1. Hastings, Nebraska

Farmland and country road in rural Nebraska.

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.342
  • Cost-of-living index: 91.6
  • Cost-of-living estimate: $61,306
  • Median household income: $82,258
  • Median home price: $270,000 (for Lincoln, NE)
  • Population: 25,037
  • Unemployment rate: 2.1%

The small town of Hastings is the most affordable city in the Midwest, and the second-most affordable in the United States. Residents get the best of both worlds, with high wages (16.2% more than the national median) and a low cost of living (8.4% below the national average). Housing costs are 14.3% less than the national average.

Since costs are low, Hastings is one of the top places to retire. There's a mix of age groups here, though, with the median age being 36.0. This town's claim to fame is being the place where Edward Perkins invented Kool-Aid in 1927, and it celebrates with a Kool-Aid Days festival every August.

Hastings' unemployment rate of 2.1% is the lowest on this list by a comfortable margin, and far below the national rate of 3.5%. Its largest industries, ranked by number of employees, are:

  • Healthcare and social assistance
  • Manufacturing
  • Retail trade

2. St. Paul, Minnesota

View of St. Paul, Minnesota as seen through a bridge over the city.

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.339
  • Cost-of-living index: 97.6
  • Cost-of-living estimate: $65,322
  • Median household income: $87,433
  • Median home price: $365,600 (for the Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin metro area)
  • Population: 307,193
  • Unemployment rate: 3.0%

Both of the "Twin Cities" rank highly for affordability, but it's St. Paul that edges out nearby Minneapolis. St. Paul's median household income beats the national median by 23.5%. And with a relatively young median age of 32.5, this city is popular for young professionals.

St. Paul has a great mix of modern amenities, like bars and restaurants, and historic landmarks, including the Cathedral of Saint Paul. Another well-known attraction here is Summit Avenue, the longest stretch of Victorian architecture in the country.

The cost of living in St. Paul is 2.4% lower than the national average, and housing costs are 9.9% below the national average. Unemployment is low at 3.0%. The biggest industries here are:

  • Healthcare and social assistance
  • Educational services
  • Manufacturing

3. Minneapolis, Minnesota

Aerial view of Minneapolis, Minnesota and lakes.

Image source: Getty Images.

  • Estimated income-to-expense ratio: 1.321
  • Cost-of-living index: 98.9
  • Cost-of-living estimate: $66,192
  • Median household income: $87,433
  • Median home price: $365,600 (for the Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin metro area)
  • Population: 425,336
  • Unemployment rate: 2.8%

Minneapolis is right next to St. Paul, and it shares many of the same characteristics, especially in terms of affordability. The median income is 23.5% higher than the U.S. median income. The cost of living is a bit higher, but still 1.1% below the national average, and housing costs beat the national average by 8.4%.

With plenty of nightlife options, Minneapolis is another exciting option for young professionals, and the median age is 32.5. Many of Minnesota's most popular sports teams are also based in Minneapolis, including the Vikings, Timberwolves, and Twins.

Minneapolis has a low unemployment rate of 2.8%. This city's top three industries are:

  • Healthcare and social assistance
  • Educational services
  • Professional, scientific, and technical services

4. Des Moines, Iowa

The Des Moines, Iowa skyline

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.289
  • Cost-of-living index: 86.0
  • Cost-of-living estimate: $57,558
  • Median household income: $74,208
  • Median home price: $261,000
  • Population: 212,031
  • Unemployment rate: 4.0%

The capital of Iowa has a cost of living 14.0% below the national average. Where it really scores well is housing costs, which are 22.2% lower than average.

As the largest city in the state, Des Moines serves as a cultural hub. It has several museums, including the Des Moines Art Center, and a performing arts group that hosts live shows. The median age is 34.0.

Even though Des Moines is an inexpensive place to live, it still has competitive wages that are 4.8% more than the national median. Unemployment is on the high side at 4.0%. This city is known as a center of the insurance industry, and its major industries are:

  • Healthcare and social assistance
  • Finance and insurance
  • Retail trade

5. Dubuque, Iowa

City of Dubuque, Iowa at nighttime.

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.252
  • Cost-of-living index: 90.2
  • Cost-of-living estimate: $60,369
  • Median household income: $75,590
  • Median home price: $212,000
  • Population: 59,119
  • Unemployment rate: 2.9%

Located on the Mississippi River, Dubuque is a popular tourist destination. The National Mississippi River Museum and Aquarium is one of the main attractions, but this city also has impressive architecture, historic landmarks, and casinos. Age-wise, Dubuque is the oldest city on this list, with a median of 37.5.

Dubuque has a low cost of living that beats the national average by 9.8%. Like Des Moines, housing is especially cheap, coming in at 22.3% less than the national average.

This city also has a robust job market, with a median income 6.8% above the national median and a 2.9% unemployment rate. Its three biggest industries are:

  • Healthcare and social assistance
  • Retail trade
  • Manufacturing

6. Sioux Falls, South Dakota

River and buildings through Sioux Falls, South Dakota.

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.240
  • Cost-of-living index: 91.5
  • Cost-of-living estimate: $61,239
  • Median household income: $75,946
  • Median home price: $298,900
  • Population: 196,528
  • Unemployment rate: 2.4%

Sioux Falls has natural beauty, a vibrant arts scene, and affordability, all rolled into one package. Falls Park and the city's bike trails are just a few of its many outdoor activities. Downtown is home to SculptureWalk, where you can view and read about all kinds of unique sculptures, and it's also where you'll find the impressive Arc of Dreams Monument.

The median age in Sioux Falls is 34.2, and the cost of living is 8.5% less than the national average. Highly rated public schools make this a great affordable city to raise a family. It's also considered one of the top places to buy a house, with a reasonable median home price and housing costs 6.7% below the national average.

Wages are fairly high here at 7.3% more than the national median, and the unemployment rate is a low 2.4%. The largest industries in Sioux Falls are:

  • Healthcare and social assistance
  • Retail trade
  • Manufacturing

7. Kalamazoo, Michigan

Downton Kalamazoo, Michigan.

Image source: Getty Images.

  • Estimated income-to-expense ratio: 1.198
  • Cost-of-living index: 77.5
  • Cost-of-living estimate: $51,869
  • Median household income: $62,128
  • Median home price: $199,000
  • Population: 73,257
  • Unemployment rate: 5.2%

Kalamazoo makes this list because of its extremely low cost of living. It's the cheapest city in the Midwest and the second-cheapest nationwide, with a cost of living 22.5% less than average expenses nationwide. Housing, in particular, is very inexpensive, beating the national average by a whopping 49.0% and having a low median home price.

Residents of Kalamazoo tend to be on the younger side, as the median age is just 26.4. It has a large student population, since Western Michigan University has four campuses here. This city also has a thriving art scene and quite a few breweries.

Kalamazoo isn't without its drawbacks. The crime rate is higher than the national average, and the median income is 12.2% less than the national median. Unemployment is very high at 5.2%. This city's three top industries are:

  • Healthcare and social assistance
  • Accommodation and food services
  • Educational services

8. Columbus, Ohio

Columbus, Ohio from river.

Image source: Getty Images.

  • Estimated income-to-expense ratio: 1.197
  • Cost-of-living index: 89.7
  • Cost-of-living estimate: $60,034
  • Median household income: $71,839
  • Median home price: $286,700
  • Population: 906,528
  • Unemployment rate: 3.5%

If you're looking for an affordable big city in the Midwest, Columbus is hard to beat. It's second only to Chicago in terms of size, but it's far less expensive. The cost of living is 10.3% less than the national average, and housing is even better at 20.4% less.

As you'd expect from a city this size, it has something for just about everyone. The Columbus area is home to hundreds of parks, multiple major shopping centers, and plenty of nightlife options. It's an excellent affordable place to live for young professionals, and there are also plenty of students, since Columbus is home to the Ohio State University. The median age here is 32.4.

Unlike other big cities, Columbus doesn't have particularly high salaries. The median household income is just 1.5% more than the national median. Unemployment is equal to the national rate at 3.5%. This city's biggest industries are:

  • Healthcare and social assistance
  • Retail trade
  • Educational services

9. Omaha, Nebraska

Downtown Omaha, Nebraska, with lake and fountain.

Image source: Getty Images.

  • Estimated income-to-expense ratio: 1.191
  • Cost-of-living index: 92.5
  • Cost-of-living estimate: $61,908
  • Median household income: $73,720
  • Median home price: $267,200
  • Population: 487,300
  • Unemployment rate: 2.6%

Omaha is the largest city in Nebraska, and it's where four Fortune 500 companies are headquartered. That includes Berkshire Hathaway, owned by legendary investor Warren Buffett, also known as the "Oracle of Omaha."

Residents who aren't world-famous investors also enjoy living in Omaha, which provides a good quality of life and low cost of living (7.5% below the national average). Housing costs are even lower at 16% below the national average. Because of that, and Omaha's excellent school system, this is one of the better affordable cities for families in the Midwest. The median age is 34.9.

Omaha also has a solid job market, with residents earning 4.1% more than the median income nationwide and unemployment at 2.6%. Ranked by number of employees, the top industries here are:

  • Healthcare and social assistance
  • Retail trade
  • Educational services

10. Pittsburg, Kansas

Sunflower field in eastern Kansas.

Image source: Getty Images

  • Estimated income-to-expense ratio: 1.182
  • Cost-of-living index: 84.9
  • Cost-of-living estimate: $56,822
  • Median household income: $67,160
  • Median home price: $135,000
  • Population: 20,738
  • Unemployment rate: 2.8%

Pittsburg is both the smallest place on this list and the youngest, with a median age of 25.9. It's also inexpensive, with the cost of living beating the national average by 15.1%. Residents don't need to spend much on housing, either. Housing costs are 30.7% less than the national average, and the median home price of $135,000 is a fraction of the average home price nationwide.

Wages in Pittsburg are a bit below average. The median household income here is 5.1% less than the median U.S. income, but this city has a low unemployment rate of 2.8%. Its largest industries are:

  • Healthcare and social assistance
  • Educational services
  • Manufacturing

Cheapest and most expensive cities in the United States

Kalamazoo, Michigan is the cheapest city in the Midwest with a cost-of-living index of 77.5, according to the Council for Community and Economic Research. Chicago, Illinois is the most expensive, with a cost-of-living index of 120.3. A cost-of-living index of 100 represents the national average, meaning Kalamazoo is 22.5% cheaper than average, and Chicago is 20.3% more expensive.

The tables below list the top 10 cheapest and most expensive cities in the Midwest. Keep in mind that the cheapest cities aren't necessarily the most affordable, because that list is only based on cost of living and doesn't account for income in those cities.

Cheapest cities in the Midwestern United States

City Cost-of-living index
Kalamazoo, Michigan 77.5
Decatur, Illinois 80.0
Joplin, Missouri 82.0
Ashland, Ohio 82.5
Topeka, Kansas 82.5
Salina, Kansas 82.7
Richmond, Indiana 82.9
Danville, Illinois 83.6
Pittsburg, Kansas 84.9
Akron, Ohio 85.9
Data source: Council for Community and Economic Research (2023).

Most expensive cities in the Midwestern United States

City Cost-of-living index
Chicago, Illinois 120.3
Detroit, Michigan 104.3
Madison, Wisconsin 102.9
Bismarck-Mandan, North Dakota 100.3
Eau Claire, Wisconsin 99.7
Bloomington, Indiana 99.7
Milwaukee-Waukesha, Wisconsin 99.6
St. Cloud, Minnesota 99.3
Minneapolis, Minnesota 98.9
Pierre, South Dakota 98.9
Data source: Council for Community and Economic Research (2023).

Methodology

Each city's cost-of-living index was taken from the Council for Community and Economic Research's 2022 annual average cost-of-living index report.

The estimated cost of living in each city is calculated by multiplying the city's cost-of-living index score by the median annual household expenditure across the United States. This number is an estimate of median expenditures per household in the city. Household expenditure data is from the 2021 Consumer Expenditure survey.

The estimated income-to-expense ratio is calculated by dividing the median household income in the city by the cost-of-living-estimate for the city. A higher estimated income-to-expense ratio score means the city is more affordable as the median household income there is above the cost-of-living estimate. Income data is from the 2021 American Community Survey.

Regional designations are based on the Census Bureau's designations.

Sources

Our Research Expert