One Of The Best States To Live In 2025 Is An Affordable Place Out West With A Reasonable Cost Of Living

Per the U.S. Census Bureau, a population of 924,669, as of July 2024, took advantage of the lower cost of living in South Dakota. According to a 2024 map from the Bureau of Economic Analysis comparing regional price parity — or the difference in the price of goods and services between states represented as a percentage — South Dakota had an index score of 88.1. This makes it one of the top three states to find lower prices for goods and services, and places South Dakota's cost of living at 11.9% below the national average.

Aside from the cost of living, the state of South Dakota has a lot to offer. When it comes to famous U.S. landmarks, you don't get much more American than Mount Rushmore. You can also explore the world's seventh longest cave at Wind Cave National Park, or take a long hike through the Badlands or the Black Hills. If culture is more your thing, there are numerous museums dedicated to the Indigenous inhabitants of South Dakota like the Journey Museum, as well as fine and contemporary arts at the South Dakota Art Museum, and Heritage Hall Museum and Artifacts. Or, the Badlands Observatory can expand your sense of wonder through night tours and telescopic views of the cosmos. Festivals including Oktoberfest, car and quilt shows, and Autumn Fest with food trucks, pumpkin carving, and local vendors round out the plethora of activities that can make living in South Dakota feel like home. 

Everyone needs somewhere to live, and South Dakota provides the opportunity to do that at a lower cost than much of the country. For starters, per the U.S. Census Bureau, out of a housing inventory of 423,789 homes, 68.6% are owner occupied. The data also shows that this is higher than the national median of 65% — with the cost of homeownership in South Dakota likely playing a part. The National Association of Realtors places the median price of a home in the U.S. in April 2025 at $414,000. While, per Zillow, the median value of a home in South Dakota, as of April 2025, was $316,374. That is up by 2.7% from 2024, and serves as a positive sign for anyone looking to both avoid buying a home in a particularly expensive city, and still know that your property will appreciate in value. Plus, as of March 2025, the median sale price of homes in South Dakota is actually even lower, at $306,333. 

Meanwhile, according to Zillow, the median rent in the country, as of June 2025, was $2,100 per month. South Dakota helps prove the point that renters are winning in the U.S., with a competitive median rental cost in comparison. Zillow data shows the average rent in the state, as of June 2025, was just $1,149 — a $62 decline from the year prior.

The overall cost of living in South Dakota helps make it both one of the cheapest states to live in, and one of the cheapest states to retire in the U.S. According to DakotaPost, even Sioux Falls, the most expensive region in the state, is 8.7% less expensive than the rest of the country despite being 3.4% more expensive than the rest of South Dakota. Getting around the state is also cheaper, with drivers spending an average of $985 per year on gas. According to the U.S. Bureau of Labor Statistics, the average amount that U.S. motorists spent on gas in 2023 was $2,449. As per Consumer Affairs, the average South Dakotan spends around 50 cents less on a gallon of mid-grade gas than the national average — $3.61 per gallon. Gasoline is just one of several products we buy from Canada that is being affected by Trump's tariffs. 

Considering how new Trump tariffs will make some cars more expensive, it's can be important to receive a discount on your car insurance premium. As outlined by the DakotaPost, the average car insurance premium in South Dakota was $1,434 versus $1,517 nationally. Also, with the surprising cost of raising a child in mind — a March 2025 LendingTree study found that daycare in the U.S. costs an average $17,836 per year. However, you'll be happy to hear that South Dakota has significantly more affordable childcare, with the Economic Policy Institute finding that childcare costs were $8,680 in the state, as of February 2025.  

Taxation in South Dakota is also favorable since it's one of several states without an income tax. According to the DakotaPost, the average South Dakotan pays around $482 per year for taxes on income — versus the national average of $6,542 annually. The tax burden per citizen in South Dakota is also extremely competitive compared to other states, with a combined federal, state, local, property and sales taxes totaling an average of $2,174 per year. Placed along the national average of around $3,151 annually, you're looking at just under $1,000 of tax free savings per year.

As per South Dakota's Department of Revenue, although the state demands property owners provide the full market value of their properties when assessing what they owe, that amount is then equalized to 85% based on a calculable number — the equalization factor — that brings your home down to 85% of its taxable value. So a home with a value of $300,000 would be taxed at a value of $255,000. So not only is it more affordable to own a home in South Dakota than a lot of other states in the U.S., but the tax you pay on that home is too.