Indiana is home to the Indianapolis Colts, some pretty nice people, and a bunch of super great, super affordable places to live.
How did we determine the most affordable places to live in Indiana for 2020? We consulted the latest Census data on cost of living.
Most Hoosiers have never really experienced unemployment. The Crossroads of America has managed to stay ahead of the national unemployment rate holding strong at 3.9%. We think it has something to do with the surge in companies that have set up shop in this MIdwest region over the last ten years. We can thank Indiana for Subaru, Angie’s List, and Vera Bradley. And we can thank Indiana’s higher education institutions like Purdue and the University of Indiana for producing smart, hard-working individuals who want to make Indiana available and affordable for all.
If you know anything about economics, good jobs increase median incomes which translates to most people being able to live in our top most affordable Indiana places. That’s a good thing because Indiana has a lot to offer. They have hip millennial cities like Indianapolis, cool college cities like West Lafayette, and cities like Hillsboro where you can escape life.
So, crank a little Jack and Diane, grab a fried tenderloin the size of your head, and read on as we uncover Indiana’s most affordable places to live for 2020.
The 10 Most Affordable Places To Live In Indiana For 2020
Median Household Income: $52,051
When it comes to living on a budget, it’s hard to find somewhere better in Indiana than Alexandria. With a median home price of $76,500 and a median income of $52,051, Alexandria has the best home price to income ratio in the state. You can literally pay off your mortgage in Alexandria before the new paint dries. As for renters, Alexandria’s affordability diminishes a bit. While Alexandria has the highest median rent on this list at $787/month, it’s still about 40% less than the average rent in Indiana.
Median Household Income: $51,420
Located about an hour north of Indianapolis, Tipton ranks as the second cheapest city to live in Indiana. Slightly higher home prices and lower incomes keep Tipton from the top spot on this list, but renting is actually cheaper in Tipton than in Alexandria.
If you’re moving near Tipton City Park, you won’t need a house with a big backyard, because you’ll have all the outdoor amenities you need right in your neighborhood. Folks in Tipton pay a median price of $81,800 for homes and earn a median income of $51,420. That means Tipton residents pay the third lowest proportion of their paychecks towards their mortgages in Indiana.
Median Household Income: $46,409
Rochester ranks as the third most affordable city in Indiana and is towards the top for cheapest place for renters on this list. The median rent in Rochester is $638, which combined with a median income of $46,409 gives the city a very affordable market for those looking to rent. Rochester’s median home price of $86,300 is also quite easy for residents to afford. And you can’t put a price tag on the awesome largemouth bass fishing at Lake Manitou.
Rochester is located about an hour south of South Bend.
Median Household Income: $37,083
Located between Indianapolis and Fort Wayne, Hartford City ranks as the fourth cheapest city in Indiana. Indiana is already a stand-out for being one of the cheapest states in America, but Hartford City takes that to the extreme with the cheapest homes in the state. Hartford City residents earn a median income of $37,083, putting Hartford City in the top five statewide for home price to income ratio.
Median Household Income: $45,274
Known as “The Heart of Southwestern Indiana,” Princeton is the fifth least expensive city in the state. With Princeton’s many parks and conservation areas, there’s loads to keep you occupied without needing to break out the wallet. Princeton’s about equally affordable for renters as it is for those looking to buy, with a median rent of $647 and a median home price of $84,800. Since residents earn a median income of $45,274, paying for housing in Princeton is just a little annoyance, not a bank-breaker.
Median Household Income: $51,086
Located about 35 miles west of Fort Wayne, North Manchester is the sixth most affordable city in Indiana. At a median price of $91,800, homes in North Manchester are some of the most expensive you’ll see on this list. But because residents earn a median income of $51,086, the town has one of the lowest home price to income ratios in the state. North Manchester is home to Manchester University, a private liberal arts school with a fairly low tuition.
Median Household Income: $43,996
Thanks to a combination of cheap homes and high earners, Huntington ranks as the seventh least expensive city in Indiana. But don’t let the low price fool you; when you’re appreciating the ritzy 19th century architecture in Drover Town Historic District, Huntington certainly won’t LOOK cheap. The median home price in Huntington is $79,600 and the median income is $43,996, putting the city in the top ten statewide for best home price to income ratio.
Huntington is about 25 miles southwest of Fort Wayne.
Median Household Income: $42,039
Located just 20 miles west of Huntington, Wabash comes in as the eighth cheapest city in Indiana. The median income in Wabash is $42,039 and the median home price is $78,300, so paying of the mortgage here takes no time at all.
Once the renovations are complete on Eagles Theatre, a 114-year old historic theatre complete with two balconies and a ball room, you’ll be able to have a seriously lavish night out on the town in Wabash. You’ll have the money for it after the bills are paid anyway.
Median Household Income: $36,450
Linton’s a coal-mining town an hour west of Bloomington that’s been slowly shrinking in recent years. But with people trickling out, the housing market is pretty sweet for newcomers.
With a median rent of $606, Linton has the lowest rent of any place on this list; not a bad title in a state with one of the lowest rents in America. But that’s not why Linton ranks as the ninth cheapest city in Indiana. It’s really because home prices in Linton are the fifth least expensive in the state, and residents are paid well enough to afford them.
Median Household Income: $37,818
Ranking #10 our list of cheapest places to live in Indiana is Portland, a city about 50 miles south of Fort Wayne. While a median rent of $629 does seem super low, Portland actually has the worst rent to income ratio on this list. At a median price tag of $69,900, Portland has some of the most affordable homes for sale in Indiana. And because the city’s median income is $37,818, Portland has the 12th best home price to income ratio in Indiana.
And as a cheap option for weekend entertainment in the summer, don’t miss the Arts in the Park events at the Hudson Family Park.
How We Determined The Most Affordable Places To Live In The Hoosier State For 2020
The two most important things to think about when it comes to being able to afford if you can live comes down to:
- How much do money do I make?
- How much do I have spend to live there?
You need to understand your costs in the context of how much money you make.
For example, if the median household earns $100,000 and spends $40,000 on housing it’s actually cheaper to live there than a place with a median income of $50,000 and housing costs of $21,000. You might spend more on housing, but you have more money overall to play with.
With that example in mind, we derived several statistics from the latest Census American Community Survey 2014-2018 around incomes and costs. They are:
- Median Home Price / Median Income (lower is better)
- Median Income / Median Rent (Higher is better)
- Median Home Price
We added simply median home price because high home prices generally correlate with higher expenses for all costs related to homes (heating, electricity, etc).
You can then compare these metrics in each of the places in Indiana to figure out which is the least expensive.
What you are left with is a “Cost of Living Index” by taking the average rank of each of these metrics for each city.
So we used that cost of living index in order to rank all of the 119 places in Indiana that have more than 5,000 people.
The place with the lowest cost of living in Indiana according to the data is Alexandria. You can download the data here.
There You Have It Mr. Or Mrs. Indiana Cheapskate
If you’re looking at the cost of living numbers in Indiana, this is an accurate list of the most affordable places to live in Indiana for 2020.
Here’s a look at the most expensive cities in Indiana according to the data:
- West Lafayette
For more Indiana reading, check out: