5 Best Cities Where You Can Buy A House For Under $100K In 2023

Is it possible to buy a house for less than $100,000 anymore? The median home price was $371,200 in the first quarter of 2023, according to the National Association of Realtors (NAR). If you consult the Census Bureau and the Department of Housing and Urban Development, you’ll get an even higher figure: $437,000. And their data say that the last time the median sales price of a house in the U.S. was under $100,000 was in the first quarter of 1987.

Unless you’re trying to speculate on distressed properties, you probably really want to know, “Where can I find a decent house in a decent neighborhood for under $100,000?” Your options are limited, and you shouldn’t plan on moving to California. But here are some cities to consider.

Where Can I Find a Home Under $100K?

The short answer: Illinois. Seven of the 20 metropolitan areas with the lowest median home prices in the first quarter of 2023 were in Illinois. You’ve got a better chance of finding an affordable house in Decatur, Peoria, Rock Island, Springfield, Rockford, Champaign-Urbana or Kankakee than almost anywhere else in the United States. Then there’s Davenport, Iowa just across Illinois’ western border.

In case you don’t want to live in Illinois, there are options in New York, Pennsylvania and Ohio.

1. Decatur, Illinois

The major metropolitan area with the lowest median sales price in the first quarter of 2023 was Decatur, Illinois at $110,000, per data from NAR. A third of the 221 homes under $100K sold in the six months leading up to July 25, 2023, had at least 1,250 square feet. And homes in Decatur often have extra space in the basement that doesn’t count toward the square footage.

Many of these homes only had only one bathroom, however. The school districts sometimes had poor ratings as well, per Great Schools. The violent and property crime rates in Decatur are significantly higher than the national average.

Yet, Google Street View showed homes on well-maintained residential streets, and Zillow photos showed interiors that were at least partially renovated. Many had stunning woodwork. One currently listed home was on a lake in a homeowners association with annual dues of only $500.

Decatur has a population of about 70,000, according to the Census Bureau. The city’s summer activities calendar is packed with farmers markets, festivals, a pro tennis tournament, hiking, canoeing, concerts, art exhibits and charity events. Bigger cities like Chicago, St. Louis and Indianapolis are all within a three-hour drive.

2. Springfield, Illinois

Illinois’ capital city, Springfield, was the seventh-least expensive metropolitan housing market in early 2023, with a median home price of $148,000, according to NAR. Yet, less costly homes abound. For the six months leading up to July 21, 2023, Zillow showed 278 homes sold for $40,000 to $100,000.

The typical home in this price range had two bedrooms and one bathroom, with horizontal siding and a few concrete steps leading up to a small front porch. But we saw plenty of variety in architectural style and size, including brick homes and the occasional two-story craftsman. Some homes were even staged with furniture, decor and harmonious color schemes.

Springfield’s overall crime rates are far higher than the national average, according to Neighborhood Scout, and the school ratings weren’t always great. These things can vary by neighborhood, of course, so local knowledge from a real estate agent (or your own experience) can be helpful.

With a population of about 113,000, visitors come for the historic sites—many related to President Lincoln—but residents stay for the 2,500 acres of parks, the Route 66 drive-in movie theater, live music, theater, vineyards, breweries, Prospect League baseball, farmers markets and more.

Just 40 miles west of Decatur, Springfield also offers easy access to Chicago, St. Louis and Indianapolis. If you like farmland, you’ll enjoy the drive.

3. Binghamton, New York

It can be harder to snag a home in Binghamton than Decatur or Springfield: Only 62 houses in this price range were sold in the six months leading up to July 25, 2023. But if you get lucky, you could move into a partially renovated older home in a cute neighborhood—maybe even a neighborhood with rolling hills, mature trees and nice views.

The median price here was $142,000 in the first quarter of 2023, according to NAR data. Homes in our target price range typically have one or more great features like hardwood floors, basements, decks, recently replaced roofing, new windows, upgraded electrical panels, more than 1,000 square feet and two stories. You could also get a charming single- or double-digit address like 9 Monroe Street or 20 Marilyn Avenue.

The biggest drawbacks to these homes are that they often have just one bathroom, the interior may need to be updated, the ceilings may be low and you may have to pull up green carpets from the 1970s to get to dulled hardwood floors.

With a population of about 47,000, Binghamton is home to one of the nation’s top-ranked public universities (Binghamton University). It’s located in the southern tier of upstate New York and just a three-hour drive from New York City or Philadelphia and a five-hour drive from Montreal, Boston, Toronto and Washington, D.C.

Of course, there are also downsides. The violent and property crime rates are significantly higher than national and state medians. And residents deal with about 64 inches of snow and more than 200 overcast days per year.

4. Erie, Pennsylvania

Erie saw 178 homes in the $40,000 to $100,000 range change hands in the six months ending July 25, 2023. At the higher end of the price range, you’ll find two-story brick homes with 1,500 square feet, four bedrooms and two bathrooms. You’ll often find older, smaller homes with horizontal siding, a single bathroom, small lots and street parking—no garage. According to NAR, the median home price in Erie is $155,000.

This city of about 94,000 sits alongside Lake Erie. It offers sandy beaches, 45 public parks, and a lower crime rate than Binghamton, Decatur or Springfield—albeit a rate that’s still on the higher side, particularly for violent crime.

For entertainment, there’s the Erie Philharmonic Symphony and Chorus and many other cultural and arts activities. Lake Erie College of Osteopathic Medicine trains future doctors, pharmacists and dentists. In the summer, four farmers’ markets offer local produce and crafts. And in the winter—well, you’d better like snow, because this place gets 100 inches of it per year. You can try to stay warm inside the city’s many breweries and distilleries.

5. Akron, Ohio

The biggest city on our list is Akron, with a population of 189,000. You’ll have far more homes to choose from here: We found that 774 houses had sold in the $40,000 to $100,000 price range in the six months leading up to July 25, 2023. NAR’s data shows that the median home price in the first quarter was $173,000.

Akron doesn’t have the best reputation for crime, but safety will depend on what part of the city you choose. You can find renovated homes and well-maintained but cosmetically outdated homes on quiet streets. Bungalows and colonials are abundant.

You’ll have a good chance of finding a home with at least 1,000 square feet. However, finding a home with a second bathroom within this budget can be challenging.

Some of Akron’s attractive features include a 25-mile hiking and biking trail, the Ohio Ballet, a minor-league baseball team, two universities, a low cost of living and lots of jobs in the polymer industry.

There are other cities (outside Illinois) where you can find homes under $100K. But we ruled them out for being too small or having extremely high crime rates.

How To Buy a House Under $100K

You may need to act fast to purchase a desirable home for under $100K. The best homes can go under contract almost as soon as they’re listed. The listings you’re most likely to see on any given day are the ones that have been languishing on the market for months. And if you don’t filter out homes below $40,000, you’re unlikely to find anything liveable.

You’ll better understand what a city offers for homebuyers in your price range if you look at sold listings for the last six months to a year rather than current listings. These search results will give you an idea of the size, condition, age, style, features and drawbacks to expect.

Here are some of the problems we identified in both neighborhoods and homes in the $40,000 to $100,000 range when looking through dozens of listings in the cities with the lowest median home prices:

• Serious water damage, usually from a leaky roof
• Undesirable location (e.g. adjacent to a gas station, at a major intersection, across the street from a graveyard)
• High crime rate for both the city overall and the specific neighborhood
• Shoddy and unprofessional “upgrades” that may hint at bigger problems with the home’s structure and systems
• Abandoned renovation projects that make you wonder why the last owner bailed
• Numerous vacant lots in the neighborhood
• Poorly rated schools

How do you get past all the lower-priced homes with problems like these to find one you’d enjoy living in? Working with a local real estate agent is a great way to learn about new properties in your price range and desired neighborhood. This is how you’ll gain access to off-market listings. If you wait until a home shows up online, it may already be too late.

Homebuyer Assistance Programs

First-time homebuyer loans and programs can make it more affordable to become a homeowner. You can find these programs through some lenders and your state housing finance agency.

Many mortgage lenders offer low-down-payment loans, such as conventional loans with 3% down and FHA loans with 3.5% down. State programs may offer grants, low-interest loans, no-interest loans or forgivable loans to help with your down payment or closing costs.

And if you want to buy a cheap home and fix it up, consider an FHA 203(k) home renovation loan.

Tips To Buy a House

Whether you’re buying a house under $100K or over $1 million, much of the general advice is the same. These tips will help you get through the process with less hassle and heartache.

Set a Budget

Take a detailed inventory of your annual expenses, retirement contributions and other regular savings contributions. Exclude what you’re paying for housing and utilities right now.

Subtract that total from your annual income. The result is how much you can spend on principal, interest, property taxes, homeowners insurance, repairs, maintenance and utilities for a house.

You may also need to budget for homeowners association dues, private mortgage insurance, and additional property insurance for natural disasters like earthquakes, floods and hurricanes.

Check Mortgage Rates

Getting a general idea of current mortgage rates is the next step in seeing how much house you can afford. Keep in mind that rates change frequently and the advertised rates you see only apply to extremely qualified buyers with large down payments, low debt-to-income ratios and excellent credit scores.

Use a Mortgage Calculator

A mortgage calculator can help you see what your monthly principal and interest payment would be for different purchase prices, interest rates and down payments. It can give you a general idea of what you may be able to afford.

Get Preapproved

Some lenders’ websites will give you a quick general idea of whether you might qualify for a home loan. Preapproval is a more thorough process where a lender will review some of your financial documents instead of just taking your word for it.

A few lenders even offer pre-underwriting, which is the most thorough process and offers the most security that you’ll be able to get the loan you want when you find the right property.

Either way, the lender must still approve the property you want to buy. Ideally, you’ll get preapprovals from several lenders so you can choose the most competitive offer.

A possible problem that could arise is that some lenders may not offer small-dollar mortgages. But there are thousands of mortgage lenders in this country, so you’ll be able to find plenty who will.

Find a Real Estate Agent

Once you’ve got a sign-off from at least one lender, you can start a serious home search. Interview a few agents who are well-connected and knowledgeable about your preferred location. Pick someone you trust to look out for your best interests when guiding you through choosing a home, negotiating an offer and evaluating the results of a professional home inspection.

Be Ready To Act

If your agent tells you about a property that’s about to become available or was just listed, plan to tour it the same day. And when you find a property you like, be quick to make a strong offer. That said, if you don’t have a strict timeline to move, don’t feel pressured to decide on a property until you’re ready. Selling a house and moving is not easy or cheap.