Alabama Versus Louisiana: Which Is the Better State?

When it comes to the most affordable places to live in the South, you may be thinking of Alabama and Louisiana. But do these two states actually deliver a low cost of living with quality lifestyle amenities? And could one have the edge on the other?

Our side-by-side on Alabama and Louisiana reveals what these Gulf Coast states share and what makes them different.

Cost of living

So many factors go into an area’s cost of living, which is why a benchmark like Sperling’s Best Places is helpful. It enables us to assess the overall cost of living across the country and broken into spending categories. On this scale, the national average is set at 100. Anything above that means an area is pricier than the norm, while anything below indicates affordability.

In a surprising twist, living in Alabama is actually more cost-effective than living in Louisiana. The demand for waterfront real estate, its higher construction costs, and the larger quantity of Gulf Front drive the higher housing costs in Louisiana. It’s also more expensive in transportation, but you’ll save a bit on utilities and healthcare.

So if you’re prioritizing affordable living, Alabama might just be the state for you! And remember, these are big-picture figures. Naturally, some areas will be more expensive than others within the states, like living in New Orleans over Shreveport.

*Based on January 2023

**Based on US Census median from 2017-2021

Population growth

It may surprise you that Alabama is the more populated state. Do note that when you rank these states by total population and population per square mile, they are side-by-side and right in the middle of the 50 states.

Alabama’s population is on the rise, with a growth rate of 1% from 2020 to 2022, hitting an estimated 5.07 million residents with an average age of 39.2 years old. While the most populated cities are Birmingham, Huntsville, and Montgomery, the most-populated Jefferson County only has 672,500 residents.

Meanwhile, Louisiana has experienced one of the most significant drops in population in recent years, according to US Census Data. The state lost just under 37,000 residents between July 2021 and July 2022, making it one of the top five states to experience a population decline, up there with New York and California. The data also showed over 67,000 people have left the state since April 2020. The most populated areas are in the coastal areas around the New Orleans metro and its suburbs.

Real estate

When you think of housing in these states, pictures of antebellum-whitewashed mansions likely come to mind. That, or coastal cottages surrounded by moss-draped oaks and cypress. You will find these iconic properties, but your options are much more vast and modern than you may think.

Louisiana and Alabama both have developed luxurious golf course communities and active living centers. Find sleek, modern master-planned developments with all the latest in-demand amenities. Or, pick from bustling downtown living, affordable condos near the coast, or small-town living with a few acres of land.

If you’re looking to stretch your investment in a home, you can’t go wrong either way, but for the cheaper state, look to buy in Alabama. In 2022, the state’s median home price was $228,434, less than half the national median sales price of $467,700! And while prices are increasing by 7.4% year-over-year, Alabama is still an incredibly affordable option for homebuyers.

Of course, no state is perfect, and Alabama does face some challenges. Existing homes had just 1.7 months of inventory, and overall home sales were down 17% compared to the previous year.

That doesn’t mean Louisiana’s home prices are out of reach, but overall, they did run higher than Alabama’s. The home prices for 2022 were up 7.8% year-over-year to $243,000. The Q4 2022 median price on all house transactions was $361,710, still under the national rate but more than Alabama.

Like Alabama, the state’s 2022 home sales were down by almost 18% compared to 2021. The months’ supply nearly doubled to 3.2 months, showing a market closer to balance than Alabama. So Louisiana is still a low-cost state to buy a home, too.

Real estate taxes

Recent data places Alabama as one of the most tax-friendly states in the nation regarding real estate taxes. With an average effective property tax rate of only 0.46%, homeowners in Alabama pay significantly less than the national average of 1.07%.

In fact, the average homeowner in Alabama only paid $585 per year in residential property taxes for 2022. While the actual tax rates may vary according to location and property value, it’s clear that Alabama is a great place to own a home if you’re looking to save on real estate taxes.

But Louisiana is no slouch, either. With an average effective rate of 0.55%, homeowners across the state paid an average of $1,187 in taxes in 2022. Louisiana residents also paid some of the lowest real estate taxes in the country, coming in fourth to Alabama’s second-place rank.

Both tax rates are strikingly different from the $2,471 national average for annual property taxes.

Taxes for retirees

In Alabama, you may save big on Social Security and pension income taxes, but watch out for a potential hit in your 401(k) accounts. The state’s income tax rate of 5% applies to you and could eat away at your hard-earned savings.

For retirees considering Louisiana, the state does have an individual income tax, but Social Security benefits and certain retirement incomes are exempt. And even better, the state offers several tax breaks and exemptions that can help lower your overall tax burden. Take advantage of a retirement income exclusion, property tax freeze, and homestead exemption to stretch your retirement savings further.

Job market

As Gulf Coast states, both have a few shared characteristics: reliance on the offshore oil and gas industry, manufacturing, and busy shipping ports in New Orleans and Mobile. Where they vary is in how much impact these sectors have on the overall economy and their market diversity.

Alabama may not be at the top of the economic rankings but at no. 38 in US News and World Report, it’s well off the bottom. The state boasted a strong manufacturing industry and a GDP of $206 billion for the 2021-2022, growing at a healthy 0.9%. But perhaps what’s even more impressive was the state’s low unemployment rate of 2.5% as of February 2023.

The state’s northern region is home to a bustling space, defense, and aviation industry, with big players like Lockheed Martin and Boeing taking the lead. And did you know that Cummins Research Park near Huntsville is the second-largest technology park in America? Meanwhile, in Mobile, the port is one of the biggest and busiest in the area, making it a logistical hub for surrounding states like Florida and Mississippi.

Louisiana’s job market boasts multiple thriving industries and its GDP exceeded Alabama at $217.16 billion for 2022. Oil and gas production, a top contributor to the economy, has provided abundant employment opportunities in crude oil refineries and related products. Other top industries, such as healthcare and manufacturing (primarily chemical processing), are also growing.

While Louisiana was ranked no. 47 for its economy, it’s worth noting that the state is home to CenturyLink and Entergy, both Fortune 500 companies. In addition, Louisiana is a hot spot for commercial fishing, sugarcane, and sweet potatoes, making agribusiness essential to the state’s prosperity.

Education

Education is one area where both states have room for improvement. That’s not to say that they don’t have quality schools inside of them. Still, a big-picture look at their education shows that these states have struggled to provide widespread access to quality public education.

Alabama’s public K-12 schools secured the no. 45 spot, and Louisiana’s schools followed at no. 46.

**Figures are from 2020-2021, except the amount per student, which is 2022.

The good news for Alabama students is Auburn University made it into the top 100 schools in the US News and World Report assessment. But Alabama’s higher education still has room to improve, ranking 39th in the nation. Other notable institutes in the state include Samford University and The University of Alabama.

Meanwhile, Louisiana’s higher education opportunities may have ranked low, but don’t count them out just yet. With top-rated schools like Louisiana State University (LSU), Tulane University, and Southern University, Louisiana does provide resources for those seeking a quality education.

Climate

Looking for a climate that delivers warm summers and mild winters? Then both states will deliver! In fact, their climates are pretty similar, and they have some of the same weather concerns.

Hurricane season can bring intense storms from June to November. Living on the coast poses a particular threat, with low-lying areas prone to flooding from storm surges. Coastal Louisiana is especially vulnerable, but Mobile Bay has experienced its fair share of damaging storm surges and heavy rains.

The northern parts of the states are in “Dixie Alley,” a region known for strong tornadoes in the fall and spring.

While snow isn’t common, northern parts will be cooler in winter than the southern regions. You’ll likely see some icing and light snowfalls, although they won’t necessarily stick around long.

Louisiana averages 216 days of sunshine but don’t be surprised to see rain all year round. However, Alabama’s Mobile ranked as the wettest city in the US, with 66 days of rainfall.

City Living

One city stands out in the latest news on top places to settle: Huntsville, Alabama. The crown jewel of southern cities recently won US News’ award for the best place to live in 2022, after already making it onto the top ten list for years. It’s no surprise why: Huntsville boasts a strong economy, affordable living costs, and numerous recreational activities within its stunning rolling landscape.

Birmingham is Alabama’s biggest city, and it’s got quite the past. Known for its affordability, it stands out as one of the most budget-friendly places in the US. Its park and recreation system are impressive, but it’s not all fun and games. The job market is solid, and the educational opportunities include top-ranked University of Alabama-Birmingham.

State capital Montgomery is evolving into a highly desirable mid-size city thanks to its affordable cost of living and increasing list of amenities. Besides its museums and Civil Rights Memorials, the city has a growing nightlife, dining, and entertainment scene, like the Alabama Shakespeare Festival and the Riverfront Park. It’s ranked the third-best place to live in Alabama.

Looking for a place that’s full of life and energy? Why not New Orleans? In addition to the famous Mardi Gras celebration, the city’s various festivals showcase Louisiana’s unique culture. From the French Quarter Festival to the Voodoo Music & Arts Festival, there’s always something happening in NOLA. With a thriving music scene and countless concerts throughout the year, New Orleans truly is a music-lovers paradise.

Baton Rouge also has many attractions, from the grand Louisiana State Capitol Building to the fascinating USS Kidd Museum. Plus, with Louisiana State University right in the city’s heart, there’s always plenty of youthful energy and excitement to be found.

The state’s other large cities include Shreveport, Metairie, and Lafayette, although their population is under 200,000.

Outdoor recreation

Get ready to explore the beautiful outdoors in Louisiana and Alabama! These two states offer abundant opportunities for those who love the great outdoors. With countless hiking and biking trails, campgrounds, and canoeing adventures, it’s nearly impossible to get bored.

The great outdoors in Alabama is a treasure trove of adventure and exploration. With 48,000 acres and 22 state parks, the possibilities are endless. Birdwatchers are drawn to the Alabama Coastal Birding Trail. For spelunkers, a guided tour through Cathedral Cavern or Majestic Caverns is an obvious choice. Meanwhile, hikers will be in their element when they embark on the challenging and rewarding 335-mile Pinhoti Trail.

Louisiana, also known as the Sportsman’s Paradise, boasts a haven for fishing, hunting, kayaking, and bird-watching enthusiasts looking to engage with nature. The 38 national forests and state parks enable you to experience hiking trails, off-roading, and camping in the beauty of Louisiana’s wilderness. The vast wetlands and bayous of Louisiana’s wilderness are often called the “Louisiana Outback” or one of the “Last Great Wildernesses.”

Louisiana’s parks offer world-class mountain bike trails for those looking for a little bit more adrenaline. Lincoln Parish Park near Shreveport is a top-rated bike track, as is the Beast in St. Francisville. And, with almost 94 golf courses, including six affiliated with the USGA, Louisiana also proves to be an excellent location for golf lovers.

Culture

Experience the allure of the “Deep South,” where Alabama awaits with its historical landmarks, dulcet accents, and gracious manners. The sweet sounds of jazz and soul music fill the air, reminding visitors of Alabama’s rich musical heritage. The state proudly commemorates the Civil Rights Movement with museums and monuments dotted across its landscape. History buffs and motorheads will find something to love about Barber Vintage Motorsports Museum. And you can look to the skies while on the ground at Alabama’s US Space & Rocket Center. No matter your interests, you’re sure to feel the pride of this vibrant state.

Louisiana is a state with a lot of heart and an even larger appetite. The locals are known for their hospitality and kindness, often stepping in to help their neighbors in crisis. They’re also known for their “joie de vivre,” or love of life, which you can experience in the many festivals and celebrations. There’s always something to look forward to; if it’s not a weekend party, it’s the food. The Creole and Cajun cuisine is a must-try and will leave your taste buds wanting more.

Choosing between Louisiana and Alabama

These southern states offer unique experiences, making it difficult to choose just one. Prioritizing affordable real estate? Alabama’s the way to go. Prefer a place with lots of culture and events? Lean towards Louisiana.

Ultimately the decision comes down to what you prioritize, so find what matters most to you and explore these states a little deeper in the Louisiana moving guide and Alabama moving guide. Just know no matter where you go, each state’s amenities ensure an unforgettable adventure and enriched lifestyle.