The 10 Cheapest Cities in America

By Jill Krasny

Southern metros ruled the Community of Economic Research's top 10 list of cheapest cities this quarter, with Harlingen, Texas being the cheapest of them all.

"It's an area where there's plenty of room," says Dean Frutiger, the project manager and economist who worked on the Cost of Living Index. "If your housing is more expensive, that's going to affect everything."

No wonder the little city scored so well on COLI's survey (81.6 on an index of 100). In Harlingen, a two-bedroom, two-bathroom apartment only costs $642 a month. And the houses there are just as cheap.

It's hard to answer what makes an area more expensive than another, but "it all comes down to supply and demand," says Frutiger. Even in the downturn, a city like DC with a "built-in infrastructure of demand" didn't feel the pinch. In fact, higher values for D.C. property and homes have driven the metro's prices higher.

That said, it's important to note that "each item on the list is a surrogate for a larger category," says Frutiger, who's analyzed this data for the past five years. "There are so many things people can go out and buy. There's a lot of stuff that we're not covering."

One example is property tax, which can really drive up the cost of homeownership. Though that's not to say housing is only the factor at play. Location matters, too.

"In many places like Honolulu and Alaska, the entire basket price [of consumer goods] will drive whether they make the [most expensive cities] list. There are enormous shipping costs. And their utility costs are high," says Frutiger.

Using COLI's data, we've picked out some prices that show how cheap it is to live (mostly) south of the Mason Dixon line.