A 2025 study by Oregon Generators has revealed the most and least affordable states in America—and while California and Hawaii aren’t surprising picks at the bottom, Arizona‘s third-place ranking has caught many off guard.
The report evaluated all 50 states using eight weighted factors, including median household income, taxes, groceries, home prices, and utility and healthcare costs. While states like New Hampshire, Alaska, and South Dakota ranked among the most affordable, the study paints a bleaker picture for residents of the Golden State, the Aloha State, and now, the Grand Canyon State.
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- 1 California & Hawaii: Expensive as Expected
- 2 Arizona: A Growing Cost Crisis
- 3 Most Affordable States Share One Key Trait
- 4 Thinking of Relocating? Consider a Trial Run
California & Hawaii: Expensive as Expected
With typical home values nearing $800,000, California continues to be a housing affordability nightmare—even for high-income earners. Soaring gas prices and high taxes are also pushing both residents and tourists to rethink the cost of living (and visiting) the state.
Meanwhile, Hawaii’s cost of living keeps climbing. The average grocery bill exceeds $300 per week, and home prices have now surpassed California’s. On top of that, a new tourist fee aimed at funding climate initiatives has only added to the expenses for visitors.
Arizona: A Growing Cost Crisis
Arizona’s rapid rise to third place is driven not just by skyrocketing housing prices but by healthcare affordability and access issues.
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Home prices have surged 123% over the last decade, partly due to California transplants driving up demand.
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Many residents now face a difficult choice between affording a roof over their heads or basic healthcare.
Even though Arizona’s annual average healthcare cost is under $7,000, access remains a problem:
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A shortage of primary care providers is worsening as the population swells.
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Nearly 10% of Arizonans are uninsured, pushing up out-of-pocket costs.
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Around 2 million residents depend on Medicaid, raising concerns over future coverage amid budget threats.
The most affordable states in the study—New Hampshire, Alaska, and South Dakota—all have no state income tax, helping residents stretch their earnings further. Additional highlights:
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New Hampshire and Alaska also have 0% sales tax.
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South Dakota’s sales tax is just 4.2%.
Even in utility-cost-heavy Alaska, the lack of income and sales taxes gives residents more disposable income than in states with higher pay but steeper expenses.
“This data gives Americans a financial roadmap,” said Corey Gilgan, owner of Oregon Generators. “Sometimes, a lower-paying job in New Hampshire might offer a better quality of life than a high-paying one in California.”
Thinking of Relocating? Consider a Trial Run
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Sioux Falls, SD offers parks, waterfalls, and trails—a great way to sample life in one of the country’s most affordable areas.
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In New Hampshire, hidden gems like Sugar Hill and the scenic White Mountains offer peaceful, tax-friendly living with a view.
As cost-of-living challenges mount in states like California, Hawaii, and Arizona, Americans may find it’s not just how much you earn—but where you live that truly counts.
