It’s hard to beat the low cost of living in the South. Seven of the ten least expensive cities on our list are in Texas, Arkansas, Kentucky and Tennessee.

Fort Smith, Arkansas

We compiled our rankings based on the ACCRA Cost of Living Index produced by the Council for Community and Economic Research. The Index measures relative price levels for housing, utilities, transportation, grocery items, health care and miscellaneous goods and services (it does not include taxes). A composite score of 100 reflects the national average. So scores lower than 100 reflect a lower-than average cost of living, and scores higher than 100 reflect a higher-than average cost of living. Median household income and average home prices are from the Toronto-based Martin Prosperity Institute. We sampled all U.S. cities with metropolitan area populations of at least 75,000.

1. FORT SMITH, ARK.

Cost of Living Index: 85.2
Metro Population: 288,595
Median Household Income: $35,726
Average Home Price: $223,885

Arkansas is a low-cost, low-tax state, and its second largest city, Fort Smith, is no exception. Housing, grocery and transportation costs here are well below the national average. And compared with the most-expensive city on our list, New York, everything in Fort Smith is a bargain.

2. PUEBLO, COLO.

Cost of Living Index: 85.9
Metro Population: 154,371
Median Household Income: $39,570
Average Home Price: $197,037

This economic hub of southeastern Colorado is just 103 miles from Denver but has a much lower cost of living. Homes in Pueblo are cheaper, on average, than in the rest of the state -- and nation. Pueblo residents also benefit from Colorado's low state income-tax rate of 4.64% of federal taxable income.

3. HARLINGEN, TEX.

Cost of Living Index: 86 .1
Brownsville/Harlingen Metro Population: 385,274
Median Household Income: $28,026
Average Home Price: $221,445

Housing prices in the southernmost city in Texas, on the Gulf coast near the Mexican border, are well below national average and are big factor in the city's overall low cost of living. The average cost of grocery items, transportation and health care also fall below the national average -- but utility costs are about 10% higher here. Brownsville/Harlingen has long been a popular destination for retirees on fixed incomes.

4. MCALLEN, TEX.

Cost of Living Index: 86.5
McAllen/Edinburg Metro Population: 706,039
Median Household Income: $28,328 
Average Home Price: $213,383

Located only 50 miles away from Brownsville/Harlingen, this city in the southern tip of Texas also has extra-low housing costs. However, utility costs are higher than the national average.

Johnson City, Tenn.

5. JOHNSON CITY, TENN.

Cost of Living Index: 86.6
Metro Population: 193,457
Median Household Income: $36,853
Average Home Price: $217,986

Affordable homes and below-average utility, transportation and health-care costs keep the cost of living low in this city on the western edge of the Blue Ridge Mountains. It's about a 2 hour drive from Charlotte, N.C., or Knoxville, Tenn. To top it off, Tennessee has no state income tax.

See the Top 10 Least Expensive U.S. Cities

MOST EXPENSIVE CITIES FOR LIVING IN THE U.S.A.

When you leave the nation's heartland and head to the coasts, prices jump. In fact, half of the most expensive cities on our list are in California. The rest are on the East Coast and in far-flung Hawaii and Alaska.

NYC, Julienne Schaer 2008/New York & Company

1. NEW YORK, N.Y.

Cost of Living Index: 218
Metro Population: 18,925,869
Median Household Income: $60,964
Average Home Price: $1.15 million

It should be no surprise that New York is first on this list. Housing costs four times the national average are a big reason that the overall cost of living is so high. But everything from grocery items to utilities are much pricier in Manhattan than in the rest of the nation. A New Yorker would have to make $127,935 a year to have the same standard of living as someone earning $50,000 in Fort Smith, Ark., the least expensive city.

2. HONOLULU, HAWAII

Cost of Living Index: 163
Metro Population: 903,231
Median Household Income: $64,355
Average Home Price: $709,945

You have to pay a high price to live in this island paradise. The average home price is well above the national average. And consumer goods and services are more expensive here than in many places on the mainland.

3. SAN FRANCISCO, CAL.

Cost of Living Index: 162.1
Metro Population: 4,222,756
Median Household Income: $72,059
Average Home Price: $815,556

With the highest home prices in California and second highest in the nation, it's no wonder San Francisco is one of the most expensive places. However, it stays out of the second-place spot in our list because costs for grocery items and utilities are much less in San Francisco than in Honolulu.

4. SANTA ANA (ORANGE COUNTY), CAL.

Cost of Living Index: 146.5
Metro Population: 12,818,132
Median Household Income: $56,680
Average Home Price: $748,359

Orange County is home to Disneyland, "Surf City, U.S.A." and some of the most exclusive and expensive neighborhoods in the nation. Not only are home prices well above the national average, costs for everything from groceries to health care run higher. California also has some of the highest income taxes in the country.

5. STAMFORD, CONN.

Cost of Living Index: 145.9
Bridgeport/Stamford Metro Population: 903,425
Median Household Income: $66,870
Average Home Price: $626,611

Although the Bridgeport/Stamford metropolitan area is among the places where home prices have fallen most, housing costs still are twice the national average. However, the city is a much more-affordable option than nearby New York City.