The 5 U.S. cities with the most homes under $100,000

The median home value in the U.S. is now nearly $248,900, but in these five cities you can find lots of affordable homes listed at under $100,000.

Philadelphia, Panama Street.

It's getting more expensive to buy a house in the United States. The median home value in the country spiked more than 4% in the past year despite the coronavirus pandemic: It's now at nearly $248,900.

If you're in the market for a house, you could find a much more affordable place than that. It just depends on where you're looking and how responsible you can be with your budget.

GOBankingRates used data from the U.S. Census Bureau and Realtor.com to find the 125 most populous U.S. cities and the percentage of listings below $100,000. The big winner: Chicago. The median home value there hovers around $249,100, just above the national level. However, it touts the highest number of active listings under $100,000 relative to its total number of listings.

Here are the top five American cities with the most affordable homes:

1. Chicago, Illinois

Total active listings: 17,392
Active listings under $100,000: 1,674
Percentage of listings under $100,000: 9.6%

Row houses on the Gold Coast of Chicago.

2. Detroit, Michigan

Total active listings: 2,185
Active listings under $100,000: 1,484
Percentage of listings under $100,000: 67.9%

GM Renaissance Center.

3. Houston, Texas

Total active listings: 16,531
Active listings under $100,000: 1,258
Percentage of listings under $100,000: 7.6%

Street photography around Downtown Houston, Texas.

4. Philadelphia, Pennsylvania  

Total active listings: 6,527
Active listings under $100,000: 1,167
Percentage of listings under $100,000: 17.9% 

Philadelphia, Panama Street.

5. Indianapolis, Indiana

Total active listings: 4,444
Active listings under $100,000: 956
Percentage of listings under $100,000: 21.5%

Indianapolis, Indiana.
f11photo | Getty Images

Follow the 30/30/3 rule

Finding a home valued at less than half of the national median is just one piece of the puzzle. Consumers should take the full picture into account to create a financial plan for the future.

One expert-advised method for housing is the 30/30/3 rule. It recommends spending no more than 30% of your gross income on monthly mortgage; having another 30% of the home value saved in cash; and that the price of the home stay under three times your annual income.

Mortgage rates have been falling as fewer people refinance their homes, but that doesn't mean you should spend more than 30% of your gross income on your mortgage. As the coronavirus crisis leaves certain industries less steady, it makes sense to have more cash at your disposal.

"By and large, homeownership has long been touted as the way you build wealth," Deborah Kearns, a mortgage analyst at Bankrate, told Grow this summer. "While that's still true to some extent, you can't overextend yourself to make that happen."

How to make your home-buying dream a reality

Video by Jason Armesto

You'll want to have at least 30% of the home value saved in cash or low-risk investments before buying. Experts suggest 20% for the down payment and a 10% cash buffer for miscellaneous expenses.

Lastly, aim to stay within budget by spending no more than three times what you make annually. If you earn $33,000 per year, you can reasonably afford a $100,000 home. If you, however, like the average millennial, make around $47,000 per year, you might be able to afford a bit more.

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