Incomes Are Surpassing Living Costs in These Deep South States

Most middle-class Americans are losing the struggle with the rising cost of living, but residents of two Deep South states are actually coming out ahead, according to a new report.

In 14 states, middle-class incomes are underwater by 10% or more in terms of trying to keep up with inflation in key living costs over the five years from 2019 to 2024, according to the new analysis from financial services platform MoneyLion.

Only two states—Louisiana and Mississippi—saw middle-class incomes gain at least 10% compared to cost-of-living increases over the same five-year period, the analysis found.

The Bayou State’s median household income in 2024 was $60,986, or $11,517 more than in 2019. Meanwhile, the cost of living increased to $36,605 in 2024, up only $4,070 from 2019.

It means incomes grew 10.8% more than household costs for the typical middle-class family in Louisiana.

Meanwhile, in Mississippi, the median household income in 2024 was $59,127, or $14,046 more than in 2019. The cost of living increased by only $6,003 to $34,755.

This means that there was a 10.3% income versus cost-of-living gain for the average middle-class household in the state over five years.

It’s not a coincidence that these two Southern states have median home list prices well below the national average—$275,000 and $299,000, respectively. Housing costs are a significant portion of the cost of living, and states with more affordable housing have a more affordable lifestyle in general.

Still, that doesn’t mean that costs didn’t go up in these states—it’s just that incomes rose more.

“These states won because paychecks grew faster than the bills, not because the bills sat still,” Rudri Patel, senior financial writer and finance expert at MoneyLion, explains to Realtor.com®. “I would say Louisiana is the exception, where costs rose only about 13%—a big reason it lands at No. 1.

“Mississippi posted one of the biggest income jumps in the country, about 31%, but from the lowest base in the nation ($45,000 to $59,000). Louisiana paired solid income growth with the most disciplined cost increase of any leading state. 

“We find this frequently when it comes to states in the South: It’s mainly a low-cost base.”

The third state with the highest income versus cost-of-living gap—Alabama—saw only a 6.7% gain. The top five was rounded out by South Carolina and West Virginia. In all of these Southern states, income increased at a healthy rate while the cost-of-living expenses were, for the most part, kept in check.

While one might think that top income states would be in the best positions financially, this wasn’t true for the most expensive states in the Northeast. The median income—although some of the highest in the nation—simply couldn’t keep up with swiftly escalating costs.

The states where average household income lagged the most behind skyrocketing costs of living are Rhode Island (-17.9%), New York (-18%), New Hampshire (-19.1%), New Jersey (-22.8%), and Massachusetts (-23.2%).

The Bay State, which ranks last on the list with the largest negative cost gap, also has the highest median home list price in the country at $770,000, beating even Hawaii ($739,000) and California ($750,000).

Again, it’s no coincidence that these states all have nose-bleed housing costs, well above the national median at $429,500, according to Realtor.com data. Simply put, incomes, though higher than average in these states, are still not keeping up with soaring housing values.

Would it make sense for a Northeast worker to relocate to one of these lower-cost Southern states?

“Depends entirely on whether your income comes with you,” says Patel. “For a remote worker, strong move. For someone job-hunting locally, less of a slam dunk than the cost gap suggests.”

Where income kept up with the cost of living

“Our market has definitely improved,” Eleanor Farnsworth, who has been selling luxury real estate in No. 1-ranked Louisiana for 45 years, tells Realtor.com. “We have a very good market right now.”

Farnsworth, who has sold homes to many deep-pocketed celebs—including Brad Pitt and Angelina Jolie when the former couple lived in the French Quarter—credits new Mayor Helena Moreno with giving buyers the confidence to invest in the state.

“There’s been a positive attitude and movement,” she says of the political change. “People now feel the city is on a roll. We’re getting our streets and lights fixed.”

One of her listings, an $8.5 million six-bedroom historic Greek Revival mansion in the Garden District, has had “lots of interest,” she tells Realtor.com.

Though New Orleans has a lower-than-average median list price at $299,000, Farnsworth says the ultraluxe end has been strong, especially for upgraded single-family homes in coveted locations.

The meticulously maintained Adams-Jones house, built in the 1860s and boasting superbly landscaped gardens, is being sold by well-known philanthropist and art patron Sarah Dunbar.

“Everybody in the city loves this house,” says Farnsworth, who maintains that she only began showing the home recently, despite it being officially on the market since May. “We’re getting calls constantly, nonstop.

“We have the Super Bowl,” she says of her hometown. “We have the Saints, we have the Pelicans, Mardi Gras, Jazz Fest. We are the bread and butter of this state for tourism. People come here [to visit], and then they want to see properties.”

While Florida has made headlines for its tale of two cities—South Florida and everywhere else in the state—it ranked No. 9 for income growth versus cost of living, with a small gain of 2.7%.

Jessica Julian of Douglas Elliman, who sells in and around Palm Beach, says that she’s seeing income growth and continued in-migration support steady housing demand across both the ownership and rental markets.

“Buyers who feel more financially secure are moving forward with purchases and upgrades, while renters are increasingly seeking higher-quality properties with better amenities,” she tells Realtor.com.

“We’re also seeing continued interest from residents relocating from higher-cost markets, many of whom are looking for larger homes and luxury properties. When incomes grow faster than living costs, it creates confidence, and that confidence often translates directly into stronger real estate activity.”

States where middle-class spending power is holding up:

Louisiana

Change in income compared to change in the cost of living (5-year): 10.8%

Median list price: $275,000

Mississippi

Change in income compared to change in the cost of living (5-year): 10.3%

Median list price: $299,000

Alabama

Change in income compared to change in the cost of living (5-year): 6.7%

Median list price: $339,900

South Carolina

Change in income compared to change in the cost of living (5-year): 4.1%

Median list price: $366,533

West Virginia

Change in income compared to change in the cost of living (5-year): 4%

Median list price: $259,000

Nevada

Change in income compared to change in the cost of living (5-year): 3.3%

Median list price: $489,000