T
his month, Realtor.com released its ranking of the top 10 cities with the lowest cost of living based on regional price parities data from the U.S. Department of Commerce's Bureau of Economic Analysis (BEA). The regional price parities measure the differences in price levels across states and metropolitan areas, with lower numbers indicating a lower cost of living.

    According to Hannah Jones, senior economic research analyst at Realtor.com, it's no coincidence that most cities on the list are in the South and Midwest. "Housing costs tend to be lower in these regions," she says. "Markets can expand as demand picks up, keeping housing costs low." McAllen, Texas, ranked as the city with the lowest cost of living, with a regional price parity (RPP) of 86.92% and a cost of living 13% lower than the national average.

    McAllen's No. 1 ranking is driven by its low housing costs, with a median home price of $275,000 and a home price-to-income ratio of 4.8. Jones notes that McAllen has ample supply given demand, which keeps costs relatively affordable. The city's location on the border between Mexico and the U.S., serving as a major hub for tourism and international trade, also contributes to its low cost of living.

    The top 10 cities with the lowest cost of living are:

    1. McAllen, Texas

    2. Wichita, Kansas

    3. Little Rock, Arkansas

    4. Toledo, Ohio

    5. Scranton, Pennsylvania

    6. Dayton, Ohio

    7. Tulsa, Oklahoma

    8. Akron, Ohio

    9. Birmingham, Alabama

    10. El Paso, Texas

    Wichita, Kansas, is the No. 2 city with the lowest cost of living, with a RPP of 89.16% and a median home price of $292,700. Jones notes that both housing costs and necessity prices are low in Wichita, making it an attractive option for buyers or residents.