Renters are facing rising interest rates on mortgages and rising home prices, along with inflation pressures, many American renters feel left without homeownership options. Many potential buyers are reviewing their wish lists and looking at more affordable states to buy real estate.
Not only first-time buyers are looking for cheaper homes, but more mature homeowners are thinking about changing their homes and downsizing to something they own completely, with equity from their current residence to pay cash, and avoiding the mortgage altogether.
Here is an overview of the states with the lowest cost for real estate purchases starting from the historical cost of housing, to discovering hidden gems that cost less than $100K. This is everything you need to know to make informed choices during your home-buying journey.
What’s the national median home price for comparison
The median price of a home will be $382,600 by the end of 2024 according to National Association of Realtors estimates. Federal Reserve Economic Data (FRED) website estimates it at $417,700.
Whatever your situation whether you’re a first-time buyer seeking their first investment or a homeowner looking to simplify their lives – the typical home purchase price in every state must not exceed $400,000. This average to use as a guideline will allow you to identify the most cost-effective locations where you can buy real property.
How much have homes cost over the years?
The trend of home prices through time offers an interesting look at America’s changing landscape. Aspirations for the future have become more realistic throughout the years. The following table shows this rise from the modest prices of just $11,900, in the year 1960 up to high prices in 2024 of $417,700!
| Year | Median home price | Year | Median home price |
| 1960 | $11,900 | 1995 | $130,000 |
| 1965 | 20,200 | 2000 | $165,300 |
| 1970 | $23,900 | 2005 | $232,500 |
| 1975 | $38,100 | 2010 | $222,900* |
| 1980 | $63,700 | 2015 | $289,200 |
What are the cheapest states to buy a house?
Here are 16 states with lower median home sales ranging from $228,000 to $289,000. Other states could have areas with less expensive home values, these 16 have medians that are under $300,000.
| State | Median home price | State | Median home price |
| Ohio | $228,000 | Kentucky | $246,700 |
| Mississippi | $232,800 | Kansas | $263,700 |
| Oklahoma | $233,900 | Illinois | $266,800 |
| Michigan | $238,800 | Alabama | $267,100 |
| Indiana | $242,500 | Pennsylvania | $268,100 |
| Louisiana | $243,300 | Nebraska | $280,400 |
| Missouri | $243,500 | West Virginia | $284,000 |
Whatever stage of your life you are at, whether it’s the first time you’ve owned a home retirement downsizing for an affordable lifestyle, or seeking out more economical living spaces, these states may offer opportunities to own a home that offer lifestyle and financial growth opportunities, and ultimately satisfaction!
However, while these states might provide lower median home prices, buyers need to take into account the cost of living in these states when making their decisions about moving. This could include costs for utilities, transportation, entertainment, and childcare costs in addition to other costs.
- Housing/rent/mortgage
- Energy/utility costs
- Food/groceries
- Transportation/vehicles/transit needs
- Healthcare/doctors/hospitals
- Clothing
- Education/schools
- Childcare
- Entertainment
Can I find a house for under $100K?
People usually ask, “Can I find one under $100,000?”. Yes, it is possible, however, it requires an analytical and flexible approach to looking for homes and making location selections.
Websites for listing real estate properties like Zillow grant helpful tools in this regard offering users an effective way to narrow searches based on dollar amounts to locate properties within budget – we did an extensive search within Birmingham Alabama with this choice and found homes that were priced under $100,000!
The research across different states especially states with lower median home values provides insight into what is available for less than $100,000. We conducted searches on Zillow in 21 states as part of our exploration process.
| State | Listings under $100K | Example city |
| Alabama | 501 | Birmingham (171 results) |
| Arkansas | 991 | Little Rock (55 results) |
| Georgia | 997 | Augusta (36 results) |
| Illinois | 2,384 | Springfield (86 results) |
| Indiana | 1,167 | Evansville (90 results) |
| Iowa | 500 | Davenport (30 results) |
| Kansas | 696 | Wichita (49 results) |
| Kentucky | 805 | Louisville (71 results) |
| Louisiana | 634 | Baton Rouge (131 results) |
| Michigan | 640 | Detroit (489 results) |
| Mississippi | 832 | Jackson (173 results) |
| Missouri | 1,583 | St. Louis (189 results) |
| New York | 1,494 | Rochester (124 results) |
| Ohio | 2,246 | Cleveland (327 results) |
| Oklahoma | 504 | Tulsa (53 results) |
| Pennsylvania | 500 | Philadelphia (404 results) |
| South Carolina | 492 | Columbia (49 results) |
| Tennessee | 500 | Memphis (273 results) |
| Texas | 2,786 | Houston (179 results) |
| West Virginia | 597 | Huntington (126 results) |
| Wisconsin | 364 | Milwaukee (138 results) |
Home shopping tips
Navigating the market for real estate is a daunting task for those who want to maximize the value of a budget. Here are some important home-buying tips that can aid in the journey:
Make a Shopping Budget: Look at your budget before buying a home. Make sure to include expenses for maintenance, taxes insurance, etc.
Find excellent mortgage rates: If you’re buying a mortgage, don’t take the first one. Fees vary widely among lenders. Therefore, you should compare the various offers to determine the best opportunity.
Utilize a mortgage calculator: These tools online give an estimation of monthly loan payments taking into consideration the amount of loan, the rate of interest, and the length of term to benefit budget your efforts in a precise manner.
Preapproval to get a loan: Getting preapproval could focus on providing important insights into your borrowing capability and benefit you stand out as a potential buyer when you make offers on houses.
Make sure you are ready to move: In many markets, good opportunities might not last for long. Being prepared can help you to take action when opportunities arise. It ensures that your finances are organized and knowing the exact type of property you are looking for will enable you to take action quickly when the right property becomes available.
Find a top real estate agent: An experienced agent can make all the difference by providing valuable information in the local market. It protects your interests during negotiations, and helping you through various stages of the buying process
Pitfalls to avoid when buying a cheap house
In your real estate market research for bargains, it could be easy to get caught in the excitement of finding a home that isn’t priced correctly. Sometimes, deals are too attractive to be real and can conceal costly issues that can become nightmares once you purchase. Here are some pitfalls to avoid when purchasing a low-cost home:
Undesirable Locations: Be cautious of properties located in undesirable areas like convenience stores or landfills, strip clubs, or power plants, as they could affect both your lifestyle and potential resale value in the future.
High crime rate: Check the rates of crime in your area and the city before purchasing a cheap rental house that compromises security or presents security risks. A home that is priced low is not always the best value!
Extensive water damage: Keep a watch for leaking roofs and water damage that may indicate structural issues that require costly repairs. These signs could signal significant structural issues that could cost you thousands of dollars to fix.
Careless Upgrades: If you are looking at homes that have been poorly completed renovations, you should be cautious. These renovations could obscure more serious problems in the structure or system and require extra expensive repairs in the not-too-distant future.
Unfinished renovation work: Homes that aren’t finished after upgrades could indicate legal or financial problems, requiring you with unfinished renovations that put you under a lot of financial and legal pressure. It could be your responsibility to pay for the completion of expensive projects.
Surrounded by vacant lots: If there are too numerous vacant homes in a community, this can signal decline and negatively affect its value as well as the quality of life of homeowners who reside there.
Underperforming Schools: Schools that perform poorly If you are planning on raising children, having a good school close by is essential. homes located in areas with low-rated schools could be more affordable, however, they could impact the child’s education and also its attraction to potential buyers.
Can I buy a home with my existing equity?
The feature of leasing the equity of your home to buy a new one can be a great option to buy a second one. Utilizing its value allows homebuyers to cut down or even eliminate their monthly loan payment after moving out or downsizing, usually saving thousands of dollars in interest costs by themselves.
Conclusion
Owning a home is an investment in financial terms, but it doesn’t have to be beyond your financial reach. This comprehensive guide will help you find affordable options throughout the U.S. such as states with low median prices for homes or hidden gems for less than $100,000. We also prepare helpful tips for navigating the real estate market efficiently and staying clear of common mistakes offering new buyers or those who are downsizing the chance to find the perfect home of their dreams.
