Buying a house is one of the biggest financial investments most people will make in their lifetime. One way to save money when buying a house is to purchase it in a state with low housing costs. In this article, we'll explore the cheapest states to buy a house in the United States. We'll look at median home prices, average closing costs, and other factors that could impact your decision on where to buy. Read on to learn more!
Exploring Affordable Housing Options
When it comes to purchasing a house, cost is one of the biggest factors in people's decision-making process. The cost of housing varies drastically from state to state, and understanding which states offer the most affordable housing is key when making a decision.
The Importance of Affordable Housing
Affordable housing is a key consideration for homebuyers because it allows buyers to save money over the long term. When looking for a place to call home, price is often a primary factor in making the decision. Affordable housing can mean different things depending on the person or family but generally refers to housing that costs no more than 30% of their monthly income.
For many people, buying a house is the largest financial investment they will ever make. Therefore, it’s important to understand all of the costs that come along with buying a house and how much you can afford. By looking for affordable housing options, you can save money over the long term by not having to pay as much in mortgage payments, insurance premiums, and other associated costs.
Factors That Influence Housing Affordability
When looking to buy a house, the price will vary greatly based on location. In some states, home prices may be more expensive due to higher demand for housing in the area, while in other states home prices might be much lower due to a weaker market or less competition. The cost of purchasing a home is dependent on a variety of factors that can influence the price of real estate in different states.
One of the biggest factors that impact the cost of housing is the local job market. Areas with strong job markets tend to have higher home prices due to increased demand for housing from people who are relocating there for work. Additionally, taxes, education level, and population density can all play a role in influencing home prices in different states.
Another factor that affects housing affordability is average income. In states where the median household income is higher, home prices are usually more expensive. This is due to the fact that people in higher-income brackets can afford to buy more expensive homes.
The 8 Cheapest States to Buy a House
Below is a list of the states with the lowest median home prices, according to Zillow. We've also included a brief description of each state so you can better understand what makes it an affordable place to buy a house.
Ohio
Ohio is often cited as one of the most affordable states in which to purchase a home. According to Zillow, the median home value in Ohio is $133,844, which is much lower than the national median of $228,700. This makes Ohio an attractive option for those looking to purchase a property without breaking the bank.
Additionally, some of Ohio's cities have seen an increase in job growth, particularly in the tech sector. This has resulted in a more competitive housing market, with homes listed for sale having an average time on the market of just 40 days. This means that it's easier for buyers to find available homes and negotiate a good deal.
Michigan
Michigan is an affordable state to buy a house, with a median home price of just $119,900 as of 2019. The low housing costs make Michigan one of the cheapest states to purchase a home. Additionally, the cost of living in Michigan is 2% lower than the national average, making it an even more attractive option when buying a house.
The state has something for everyone, from the bustling cities of Detroit and Grand Rapids to the more rural areas of the Upper Peninsula. The state also boasts an impressive economy, with a strong manufacturing sector, leading employers such as Ford Motor Company, and a vibrant start-up scene in Ann Arbor. With its combination of affordability and economic opportunity, Michigan is an ideal location for those looking to purchase a home.
Indiana
Indiana is one of the cheapest states to buy a house in the United States. With an average home price of around $130,000, Indiana offers some of the most affordable housing options in the nation. The cost of living is below the national average in Indiana, and property taxes are relatively low compared to other states. The median household income in Indiana is also slightly lower than the national average making it easier for people to qualify for mortgages. Additionally, closing costs are relatively low at around 1.6% of the sale price.
Indiana is also known for its diverse economy and job opportunities, with major industries such as aerospace, automotive, and agriculture all contributing to the state’s GDP. The state is also home to major cities such as Indianapolis, Fort Wayne, and Gary, each of which has its own unique culture and attractions. With its combination of affordability and economic opportunity, Indiana is an attractive option for those looking to purchase a home.
Iowa
With an average home price of $180,091, Iowa is one of the most affordable states to purchase a house in. The median household income in Iowa is $56,921 which allows for more people to qualify for mortgages and afford homes. Additionally, closing costs are relatively low at around 1.5% of the sale price.
Iowa also boasts a strong economy and plentiful job opportunities, which is why many people are attracted to its affordability when it comes to buying a home. Major industries that contribute to the state’s GDP are agriculture, manufacturing, and finance. The state also offers a variety of attractions for both residents and visitors alike, from the stunning views of the Mississippi River to the numerous outdoor activities available in Des Moines and Cedar Rapids. With its combination of affordability and abundant job opportunities, Iowa is an ideal location for those looking to purchase a home.
West Virginia
West Virginia is an ideal state for those looking to purchase a home on a budget. The median home value in West Virginia is around $124,700, making it one of the most affordable states in the country. In addition, West Virginia has some of the lowest property taxes in the U.S., with an average rate of 0.51%. This combination of low home prices and low taxes makes it an attractive option for those looking to purchase a home.
West Virginia also has a diverse economy and job opportunities, with major industries such as tourism, energy, and manufacturing all contributing to the state’s GDP. There are also numerous attractions in West Virginia for both residents and visitors alike. Outdoor activities such as fishing, hiking, and rafting are popular in the state’s many national parks and forests. Additionally, there are plenty of cultural attractions such as the National Radio Astronomy Observatory in Green Bank and the Tamarack Arts and Crafts Center in Beckley. With its combination of affordability and abundant job opportunities, West Virginia is an ideal location for those looking to purchase a home.
Arkansas
Arkansas is one of the most affordable states to purchase a home. The state's median home price for 2020 was $150,000, which is much lower than the national median of $200,000. This makes Arkansas an attractive option for potential homeowners who are looking for an inexpensive place to live.
In addition to being one of the least expensive states in which to buy a home, Arkansas also has an excellent job market. With industries such as agriculture, manufacturing, and tourism contributing to its economy, the state offers a variety of employment opportunities for those looking to move there.
For those looking to buy a home in Arkansas, there are plenty of options available. Cities like Little Rock, Fayetteville, and Bentonville all feature vibrant economies and attractive real estate markets. Additionally, the state is home to the renowned national parks Ozark National Forest and Hot Springs National Park, as well as many outdoor activities for both residents and visitors alike. With its combination of affordability and abundant job opportunities, Arkansas is an ideal location for those looking to purchase a home.
Mississippi
With an average home price of $ 188,921, Mississippi is one of the most affordable states to purchase a house in. The median household income in Mississippi is $46,255 which allows for more people to qualify for mortgages and afford homes. Additionally, closing costs are relatively low at around 1.5% of the sale price.
In addition to relatively low home prices, Mississippi also offers some of the lowest property tax rates in the nation. Property taxes in Mississippi are among the lowest in the country, averaging just 0.89%.
Mississippi is also an ideal state for those looking to purchase a home due to its rich cultural heritage and diverse economy. The state has a wide range of industries, including agriculture, manufacturing, technology, and tourism. Additionally, there are numerous attractions in Mississippi for both residents and visitors alike. From the historical city of Natchez to the beautiful beaches of the Gulf Coast, Mississippi is full of unique experiences and activities. With its combination of affordability and diverse job opportunities, Mississippi is an ideal location for those looking to purchase a home.
Alabama
With an average home price of $197,496, Alabama is one of the most affordable states to purchase a house in. The median household income in Alabama is $48,627 which allows for more people to qualify for mortgages and afford homes. Additionally, closing costs are relatively low at around 1.5% of the sale price.
In addition to its low home prices and tax rates, Alabama also offers potential buyers a diverse job market. The state boasts a strong agricultural industry as well as major manufacturing and technology industries. Additionally, Alabama is home to numerous attractions, from the beaches of the Gulf Coast to the historic sites of Montgomery. With its combination of affordability and job opportunities, Alabama is a great location for those looking to purchase a home.
What Makes These States Affordable?
There are various factors that make these states some of the most affordable places to purchase a home. One factor is the median household income in these states, which is generally lower than the national average. This allows more people to qualify for mortgages and afford homes. Additionally, these states often have low property taxes and closing costs which further help to keep housing prices down. Finally, each state offers its own unique job markets with diverse industries, allowing potential buyers to find employment opportunities that fit their needs.
There are also some external factors that affect housing prices. We'll look at some of these in the text below.
Economic Factors
The affordability of these states is largely due to their lower median home prices. Generally, the cost of living in these states is lower when compared to the rest of the country. This means that residents have more buying power and can afford to purchase a home for a lower price. Furthermore, many of these states also have lower average closing costs, making them even more appealing to potential homeowners.
Quality of Life
In addition to being some of the most affordable states to purchase a house in, these states also offer a high quality of life. From small-town charm and outdoor recreation opportunities to vibrant cities and diverse cultural attractions, there is something for everyone in these states. Residents enjoy access to great schools, low crime rates, excellent healthcare facilities, and ample entertainment options. Whether you are looking for a place to raise your family or retire in comfort, these states offer something for everyone.
Homebuying Tips for Affordable States
Homebuyers want to make an informed decision when purchasing a house. Here are some tips to consider when shopping for a home in these affordable states:
Finding the Right Neighborhood
When selecting the best neighborhoods in the cheapest states to buy a house, there are several factors to consider. Location is always important, as you want to be close to amenities and work opportunities but also have access to public transportation if needed. It's also important to look at the quality of the local schools, as well as crime statistics for the area. Additionally, pay attention to housing affordability in comparison to the other neighborhoods in the area.
Negotiating and Financing
When looking for an affordable home, it is important to take into consideration the overall cost of the property. This includes the purchase price as well as all associated costs like closing fees, taxes, and insurance. To find the best deal on a house in one of the cheapest states to buy a house, there are some tips that can help you get the most for your money.
First, research the area and look for homes that are priced lower than their estimated market value. This can be a good indication of a seller who is willing to negotiate. Additionally, taking the time to shop around for financing options can also save you money in the long run. Many banks offer special programs for first-time homebuyers or veterans that could help reduce your overall costs. Finally, don’t be afraid to negotiate and make an offer lower than the asking price. Many sellers are willing to accept a lower offer if it is presented in a respectful manner.
Conclusion
Purchasing a home is one of the most significant investments most people make. When selecting a place to buy a house, it’s important to consider the cost of homeownership, especially in states with higher median housing costs. Fortunately, some of the cheapest states for homeownership offer numerous advantages that make them appealing options for buyers.
One major advantage of buying in the cheapest state is that mortgage payments are typically much lower than the national average. This can result in large savings over the long run and make it easier for buyers to manage their finances. Additionally, these states often offer attractive amenities like quality schools, low crime rates, excellent healthcare facilities, and ample entertainment options.
Finally, many of these states are expected to have strong housing markets in the future, making them good investments. By taking the time to research neighborhoods and compare financing options, buyers can find an affordable home in one of the most cost-effective states for homeownership.
Frequently Asked Questions
What are the current median home prices in these states?
The median home prices in these states vary significantly. For instance, Mississippi has the lowest median home price at $121,500, while Hawaii is the most expensive at $616,800. North Carolina and Alabama both have a median home price of around $200,000, while Ohio and Michigan have an average of around $175,000. Tennessee's median home price is slightly higher at $212,000.
How can I relocate to one of these states?
Relocating to any of the low-cost states to buy a house can be a great way to save money and improve your quality of life. Before you move, it is important to research the local area and consider any potential lifestyle changes that may come with the move. It's also a good idea to set a budget for your new home, obtain financing if necessary, and learn about the real estate market in the area. Finally, be sure to factor in the cost of moving and any associated expenses.
Are there any potential drawbacks to living in these states?
One potential drawback of living in one of the cheapest states to buy a house is that job opportunities may be limited. This could make it difficult to find employment and bring in an income. Additionally, some of these states can experience extreme weather conditions, which could add extra costs for heating or cooling a home. Finally, access to public transportation may be limited in some areas, making it more difficult to get around.