5 Best Cities Where You Can Buy A House For Under $200K In 2024

With the real estate market on fire and interest rates continuing to rise, finding an affordable home can feel like an impossible task. The current median sales price of single-family homes in the U.S. is over $412,000, according to the National Association of Realtors (NAR). But don't lose hope just yet. There are still cities where you can buy a house for under $200,000.

Where Can I Buy a Home Under $200K?

While coastal cities often take the spotlight, it's actually the towns in Middle America that offer the most affordable housing options. States like Texas, Indiana, and Ohio have some of the best cities where you can find a home for $200,000 or less.

1. Wichita Falls, Texas

The falls in Wichita Falls Texas

According to the NAR, the average home value in Wichita Falls, Texas is $176,400. While prices have increased compared to the previous year, the growth rate is slowing down. Monthly mortgage payments in Wichita Falls are some of the most affordable in the nation, with residents paying less than 10% of their income towards their mortgages. However, it's worth noting that crime rates in Wichita Falls are higher than the national average.

2. South Bend, Indiana

South Bend Indiana Skyline at night

In the South Bend, Indiana area, the current median home value is $183,000. This makes it one of the most affordable housing markets in the country. Residents here pay only 8.8% of their income towards their monthly mortgage payments. Employment opportunities in South Bend are strong, although the crime rates are higher than the national average.

3. Toledo, Ohio

Skyline of Toledo Ohio

Toledo, Ohio offers homes at an average price of $156,000, according to the NAR. While prices have increased in recent years, the growth rate is slowing down. Residents in Toledo pay only 7.8% of their monthly income towards their mortgages. However, unemployment rates in Toledo are higher than the national average. Crime rates are also a concern, with assault, murder, and theft being above the national average.

4. Topeka, Kansas

Topeka Kansas capitol building

Homes in Topeka, Kansas have an average price of $176,100. While prices have increased by over 26% in the last three years, they are still well below the national average. Unemployment rates in Topeka are lower than average, but crime rates are higher. Residents here pay 8.7% of their income towards their mortgages.

5. Montgomery, Alabama

Fountain in Montgomery Alabama

Montgomery, Alabama has a median home price of $185,400. Prices have increased by more than 27% over the past three years. The unemployment rate in Montgomery is low at 2.1%, and the city continues to see improvements. However, crime rates are higher than the national average.

How To Find a Home Under $200K

Finding a home under $200,000 may seem challenging, but it's not impossible. Here are a few tips to help you in your search:

1. Look beyond your current location: If you're struggling with high home or rent payments, consider exploring areas with more affordable costs of living. It might mean looking outside your current neighborhood.

2. Look outside city limits: While urban areas may have homes within your price range, you might have better luck finding affordable options in rural areas outside of metropolitan areas.

3. Get some help: Enlist the assistance of a knowledgeable real estate agent who is familiar with the area you're interested in. They can help you navigate the market, find homes within your budget, and guide you through the buying process.

7 Tips To Buy a House

Before you start the home-buying process, here are a few steps to take:

1. Start saving: The sooner you start saving for a home, the more you can allocate towards expenses like down payments, closing costs, and necessary upgrades.

2. Clean up your credit: Improving your credit score can help you qualify for loans with lower interest rates. Paying off outstanding debts and removing any negative marks on your credit report can boost your chances.

3. Determine your budget: Before diving into the housing market, set a budget that aligns with your financial situation. Stick to these parameters to avoid purchasing a home that will strain your finances.

4. Get prequalified: Prequalifying for a mortgage will give you an idea of how much you can borrow and the types of loans you're eligible for. Use a prequalification calculator to get started.

5. Compare lenders: Take the time to shop around and compare different lenders. Look for the lowest interest rates, the fewest fees, and repayment terms that fit your budget.

6. Prepare your paperwork: Gather all the necessary financial documents, such as tax returns, pay stubs, and bank statements, to speed up the preapproval process.

7. Get a preapproval: While not mandatory, a preapproval letter can strengthen your offer and show sellers that you're serious about buying a home.

Now armed with these tips, you can navigate the housing market with confidence and find your dream home within your budget. Happy house hunting!