Best Affordable Places to Live in Alabama in 2025
(Last Updated – 03/2025)
It’s easy to understand why people are attracted to Alabama, with its beautiful beaches, delicious barbecue, college football dominance, and amazing history. But Alabama is also a good place if you’re looking for a state with affordable homes and a lower cost of living in general.
Alabama’s cost of living ranks 5th lowest in the US, according to the most recent data, meaning there’s a good chance that you’ll find an affordable lifestyle if you head to this southern state. Read on to learn the details of some of the best cities and towns for families, young professionals, retirees, and more.
Alabamans pay some of the lowest property taxes in the country. And unemployment in Alabama, which has hovered just above 2% for most of 2023, is also lower than the national average.
Best Places to Live in Alabama
Whether you’re looking for a buzzy downtown vibe, a cool college town, or an historic waterfront city, you should be able to find your fit in Alabama. There are plenty of educational, cultural, and just plain fun attractions to enjoy.
Wondering where you can get the most of what Alabama has to offer at a manageable cost? Read on for our roundup of some of the best places to live in Alabama.
💡 Quick Tip: SoFi Home Loans are available with flexible term options and down payments as low as 3%.*
Best Affordable Places to Live in Alabama
According to the MERIC (Missouri Economic Research and Information Center) Index, which ranks the cost of living by state, Alabama has a 12% lower cost of living than the U.S. average. That makes it more affordable than most Southern states (with the exception of Mississippi).
Here are some of the most affordable places in Alabama to live.
1. Mobile
Photo credit: iStock/Cavan Images
If you’re searching for a city that truly looks and feels “Southern,” Mobile is a place to check out. History buffs, outdoor enthusiasts, theater fans, and more will find plenty to do in Mobile. And yet, despite all the city has to offer, the cost of living is low, and homes are relatively inexpensive.
Population: 182,595
Median Household Income: $51,090
Cost of Living: 96% of the U.S. average
Average Rent Price: $1,350
Home Price-to-Income Ratio: 3.64
2. Birmingham
Photo credit: iStock/SeanPavonePhoto
Birmingham is a popular destination for its history, but you might choose to live in this dynamic city if you’re into the arts, sports, or if you love festivals. The city has a wide range of home prices, and affordable homes are available. Plus the overall cost of living in Birmingham is low enough that you might be able to put more toward a house payment than you would in some other areas.
Population: 196,644
Median Household Income: $44,376
Cost of Living: 91% of the U.S. average
Average Rent Price: $1,200
Home Price-to-Income Ratio: 2.84
3. Montgomery
Photo credit: iStock/Kruck20
Montgomery is yet another Alabama city steeped in history. You’ll also find a lovely and lively waterfront entertainment district that offers something for just about anyone. And the city is just a car ride away from the beach, and Atlanta, and any other hotspots you want to visit. Plus the cost of living in Montgomery is much lower than the national average, so homebuyers likely won’t have to struggle to find a place they can afford.
Population: 195,287
Median Household Income: $55,687
Cost of Living: 84% of the U.S. average
Average Rent Price: $1,250
Home Price-to-Income Ratio: 2.52
Best Places to Live in Alabama for Families
Looking for a family-friendly place to live? You’ll find it in one of these cities, along with good schools, abundant recreation opportunities, and affordable housing costs.
1. Madison
Madison is a growing Huntsville suburb that’s known for its family focus. You can hang out in town, enjoy the great outdoors, or take a short trip to the city for more fun. The cost of living in Madison is higher than the overall cost of living in Alabama, but it’s lower than the national average.
Population: 60,854
Median Household Income: $131,436
Cost of Living: 83% of the U.S. average
Average Rent Price: $1,870
Home Price-to-Income Ratio: 2.81
2. Meadowbrook
If you’re looking for a home in the ‘burbs of Birmingham, Meadowbrook could be for you. Home costs may be higher than in many parts of Alabama, but a reasonable commute will make this spot attractive. Families also find the good schools here appealing.
Newbie buyers can check out first-time homebuyer programs in Alabama to see what kind of help might be available.
Population: 9,688
Median Household Income: $145,464
Cost of Living: 83% of the U.S. average
Average Rent Price: $2,413
Home Price-to-Income Ratio: 2.99
Recommended: Mortgage Prequalification vs Preapproval
3. Helena
Photo credit: iStock/JRainesWDE
Helena has a rural, small-town feel. Whether you’re a hiker, a history buff, a music fan, or even a scuba diver, you can find plenty of activities to keep your family busy without dropping a bundle.
You may want to explore different types of mortgage loans to see which one might be the best option for your home-buying needs.
Population: 22,117
Median Household Income: $109,590
Cost of Living: 83% of U.S. average
Average Rent Price: $1,683
Home Price-to-Income Ratio: 3.12
💡 Quick Tip: Lowering your monthly payments with a mortgage refinance from SoFi can help you find money to pay down other debt, build your rainy-day fund, or put more into your 401(k).
Best Places to Live in Alabama for Young Adults
Alabama has plenty to offer young adults, including vibrant cities, entertainment venues, college sports, and cultural attractions.
1. Tuscaloosa
Photo credit: iStock/traveler1116
Looking for a beautiful community with a vibrant nightlife? You may want to put Tuscaloosa on your list. The city, which is the home of the University of Alabama, offers sports, culture, education, and more. And it’s affordable, which can be a real plus if you’re a first-time homebuyer.
Population: 111,338
Median Household Income: $48,536
Cost of Living: 86% of U.S. average
Average Rent Price: $1,500
Home Price-to-Income Ratio: 4.48
2. Daphne
Photo credit: iStock/George Dodd
Young adults who enjoy beach life and socializing will like Daphne, which is located on Mobile Bay and has a lively nightlife and lots of outdoor activities. Home costs in Daphne are surprisingly affordable for a place that’s so close to the water.
Homes in Daphne are not inexpensive, and prices are rising. But it may be easier for frugal house hunters to qualify for a mortgage in some neighborhoods more than others. With its proximity to the beach and other amenities, you might decide living in Daphne is right for you
Population: 30,321
Median Household Income: $86,479
Cost of Living: 88% of the U.S. average
Average Rent Price: $1,900
Home Price-to-Income Ratio: 3.69
3. Vestavia Hills
Photo credit: Wikimedia Commons/Sharon Phelan Evans , Creative Commons Attribution-ShareAlike 3.0 Unported
Conveniently located between Birmingham and Hoover, the suburb of Vestavia Hills has plenty to offer — including shopping, coffee shops, restaurants, and several wineries. Home prices can be high, though, so keep that in mind if you’re drawn to this area.
Vestavia Hills is a charming community, but you may have to do a little legwork to find a home that’s in your price range. It might be helpful to go through the mortgage preapproval process before you begin your search, so you’ll know what you can afford.
Population: 38,020
Median Household Income: $129,171
Cost of Living: 95% of U.S. average
Median Rent Price: $1,895
Home Price-to-Income Ratio: 3.99
Best Places to Live in Alabama for Retirees
With its warm climate, community-oriented towns, and affordable housing prices, Alabama can be an inviting place to spend your retirement years. These are some of the best places to live in Alabama for retirees.
1. Prichard
Photo credit: Wikimedia Commons/Michael
Rivera , Creative Commons Attribution-ShareAlike 4.0 International
Prichard is a suburb of Mobile, which means you can get all the advantages of living near a big city without having to deal with the traffic every day. Home costs are low here, even though it’s near Mobile Bay and several other more expensive communities.
Bargain hunters, get ready! The average Prichard home value is approximately $51,000, and the area’s home price-to-income ratio sits at just 1.45.
Population: 18,816
Median Household Income: $35,331
Cost of Living: 86% of the U.S. average
Average Rent Price: $995
Home Price-to-Income Ratio: 1.45
2. Midfield
Midfield is a community-oriented suburb just a few miles south of Birmingham. It’s an easy place for retirees to settle into, with convenient grocery stores and churches, and plenty of outdoor activities.
Population: 5,101
Median Household Income: $51,776
Cost of Living: 87% of the U.S. average
Average Rent Price: $1,200
Home Price-to-Income Ratio: 1.53
3. Tuskegee
Photo credit: iStock/sshepard
City slickers, nature lovers, and history buffs will find something to like in Tuskegee. It’s anchored by the well-known university, which brings events to campus. You can enjoy all the town has to offer and stay on budget thanks to affordable home prices.
Population: 8,765
Median Household Income: $38,160
Cost of Living: 85% of the U.S. average
Median Rent Price: $592
Home Price-to-Income Ratio: 2.03
Best Places to Live in Alabama Near the Water
If you’re looking for property on or near the water, Alabama has not just the ocean, but also lakes to choose from.
1. Gulf Shores
Photo credit: iStock/Veni
Because it’s on the beach, people typically think of Gulf Shores as a vacation spot. But it can be a lovely place to live year-round. There are lots of shops, restaurants, and a state park to enjoy. Some neighborhoods are more expensive than others, so if this is your target area, be ready for a high monthly payment, whether you plan to rent or buy.
Gulf Shores is known for fun by the beach — not necessarily for low home prices. But if you want to live by the ocean, a home purchase or rental in this coastal community could cost you much less than a waterfront home in many other states. And a jumbo mortgage loan could be worth exploring if you find your dream house.
Population: 16,850
Median Household Income: $73,873
Cost of Living: 96% of the U.S. average
Average Rent Price: $2,250
Home Price-to-Income Ratio: 6.10
2. Guntersville
Photo credit: iStock/HildeAnna
If you’re looking for waterfront property but can’t afford to be near the ocean, Guntersville could be a worthy alternative. It sits on Alabama’s largest lake, and along with fishing, sailing, and other watersports, residents can enjoy the town’s museums, festivals, and the theater.
As your real estate hunt proceeds, if you decide to target this area, the resources in a home loan help center might be helpful as you shop for the right mortgage.
Population: 9,028
Median Household Income: $67,448
Cost of Living: 80.5% of the U.S. average
Average Rent Price: $1,800
Home Price-to-Income Ratio: 4.21
3. Alexander City
Photo credit: Flickr/Jimmy Emerson, DVM , Creative Commons Attribution-NonCommercial-NoDerivs 2.0
Alexander City is a vibrant and affordable community that sits on the shores of Lake Marshall. It has lovely water views, along with shops, restaurants, museums, and parks, so there’s always something to do.
Population: 14,470
Median Household Income: $42,367
Cost of Living: 81% of U.S. average
Median Rent Price: $750
Home Price-to-Income Ratio: 4.09
The Takeaway
If you’re drawn to the idea of living in the South and all it has to offer, Alabama could be a “sweet home” for you. As you begin your house hunt, you’ll find that each community has a little something different to offer, and home prices can vary significantly from one neighborhood to the next. However, with a cost of living below the national average, you may be able to snag an affordable lifestyle in many parts of the state.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Browse Other States
FAQ
Where is the most affordable place to live in Alabama?
Many areas in Alabama offer extremely affordable home and rental prices. Prichard, Helena, and Montgomery have some of the lowest home price-to-income ratios.
Where is the nicest place to live in Alabama?
Everyone has their own idea of “nice,” but the cities and towns near Mobile Bay are among the most popular places to live in Alabama. They also tend to be the most expensive.
What is the least expensive county in Alabama?
Covington and Madison counties have some of the least expensive homes in the state. However, the cost of living in Alabama is below the national average, so you may be able to find relative bargains in many locations.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. SOHL-Q125-080