The cheapest homes in America tend to be located in the Midwest, though there are areas of Texas and the extreme North (think South Dakota or Wymoing) that offer cheap homes as well.
What is the reason for cheap housing in the Midwest? A number of factors are at work here, including a spate of recent foreclosures, distance from high cost places like Los Angeles or New York, lack of amenities, lack of interest, etc.
The most expensive homes in the United States tend to be in California -- the average cost for a four bedroom home in Palo Alto (a wealthy subdivision of San Francisco) is well over $1 million. In contrast, the lowest average price for a similar home is in the state of Illinois, where a four bedroom home's average cost hovers right around $100,000. Same house size, two different areas of the country.
If you're looking for a cheap American home, states like Indiana, Illinois, and Missouri are great places to start.
Here are some listings I've found in recent weeks.
Darlington, Indiana - $23,000 will get you a pretty country house near "town", but one that will need plenty of work to make it livable. For example, the bedrooms don't have closets, and the lawn is in disrepair. This is a small town in a state that has never charged much for real estate -- good towns to start looking in for cheap American homes.
Dumas, Arkansas - $47,600 in this small town will buy you a three bedroom pseudo ranch style home. Because this is Arkansas, there is some farm property in the backyard that you could use to grow your own vegetables, etc.
Dumas, Arkansas - Another cheap listing in this little town -- $15,000 for a smallish (1,900 square-foot) "three-bedroom: home on a big corner lot, with a fishing hole nearby. You can tel by the price that this home will need some work, but if you're looking for a cheap home in a quiet country town, places like this could be your ticket in.
Ponder, Texas - A two bedroom limestone house is listed for $26,000. Ponder is within easy driving distance of Dallas-Ft. Worth, but is quiet enough that you'll feel like you're living in the middle of nowhere.
Eastland, Texas - A three bedroom and two bath home is listed at $45,000. Texas isn't known for its cheap houses, but if you look in smaller towns like Ponder and Eastland, you can find great deals. Just don't expect the kind of amenities you'd get in a place like Houston or Austin.
Alva, Oklahoma - Texas' neighbor to the north is known for affordable houses, and my search in Oklahoma yielded two very interesting cheap homes for sale. In this little college town, $26,000 will land you a "cute two-bedroom house". The ad lists a remodeled bathroom as well as new paint in the living room as selling points. Across town, spend a little more ($28,500) and you're the owner of a two bedroom home in the middle of town. This is a good example of the opportunities for purchasinig homes in Oklahoma.
Blackwell, Oklahoma - Sure, this is a smaller town than Alva, but for just $32,000 you can move into a two-bedroom home on a big corner lot. The ad lists "New appliances, large living room, double carport and a small workshop".
Ironton, Missouri - $25,000 buys you a country home in this village, but one that admits right in the listing that some work is needed. What do you get for that money? Two bedrooms, a grove of woods and fruit trees, and a large lot.
Marceline, Missouri - $40,000 is the pricetag on a two bedroom house just outside of this small town's city limits. The listing advertises a large living room, a big yard, and "space for a garden".
When you look for cheap American homes, you need to think geographically. You're not going to find a cheap home in San Francisco or Palo Alto, California -- at least not one you'll want to live in. Move a few hundred miles to the east of those urban centers and you may be surprised at how far your real estate spending can go.