Top 10 Markets for First-Time Home Buyers

2020 Best and Worst Cities For First Time Homebuyers |

Top 10 Markets for First-Time Home Buyers

According to the National Association of REALTORS, first-time buyer made up 33 % of all home buyers, a decrease from last year at 34 %. Purchasing a home is a big financial decision for homebuyers, especially those who might be going through the home buying process for the first time.

Often times first-time buyers are looking for that extra reassurance that they are making the right decision. Some first-time buyers use the FHA loan to purchase their first home because of their low credit and low down payment requirements.

A recent Mortgage Research Center study identified the best and worst cities for first-time homebuyers.

In order to identify the best cities, Mortgage Research Center collected data from the 100 most populated cities in the United States and evaluated the strength of each city across 21 relevant variables of Affordability, Economic Wellness & Quality of Life.

Let’s take a closer look into our findings and a breakdown of the methodology of the best and worst cities for first-time homebuyers.

​Key Findings

  • Texas and Arizona secured 7 of the top 10 spots for Best Cities for first-time homebuyers.
  • Lincoln, NE has the lowest unemployment rate of all 100 cities analyzed at 4.10% of the overall population.
  • Toledo, Plano, Boise City, Reno, and Phoenix saw the most drastic job growth from 2013 – 2018. These cities have experienced a 20% to 40% increase in growth.

Top 10 Cities for First-time Homebuyers

Prospective home-buyers should certainly consider some of the cities that made it to the top of this list.

  • Population – 678,266
  • Median Home Price – $121,300
  • Unemployment Rate – 6.90%
  • Cost of Living ( a US average of 100) – 87.2

El Paso was able to secure the top spot on this list. The mission statement for the city of El Paso is “Deliver exceptional services to support a high quality of life and place for our community.” El Paso also offers a wide variety of attractions to visit, such as the Digie 3D Wall, Downtown Art and Farmers Market, a zoo, and many other fun things.

  • Population – 916,906
  • Median Home Price – $285,900
  • Unemployment Rate – 4.40%
  • Cost of Living ( a US average of 100) – 130

Austin secured the second spot on this list. Austin is the capital city of Texas and is known for its music, but the city also offers world-class museums and tons of beautiful outdoor spaces. Austin also has a creative community, with a lot of friendly people to make people feel at home.

#3 – Raleigh, North Carolina

  • Population – 449,477
  • Median Home Price – $225,000
  • Unemployment Rate – 5.00%
  • Cost of Living ( a US average of 100) – 111

Raleigh is the capital of North Carolina, and is well known for its universities. Raleigh was able to secure the third spot on the list.

The city will often times post upcoming events on its website to keep the public informed about upcoming festivals, sporting events, and many other fun things to do.

#4 – Scottsdale, Arizona

  • Population – 255,310
  • Median Home Price – $405,500
  • Unemployment Rate – 4.70%
  • Cost of Living ( a US average of 100) – 148.7

Scottsdale is a desert city in Arizona east of state capital Phoenix. Scottsdale secured the fourth spot on the list. This city has tons of outdoor activities to enjoy.

Some of these activities include hiking, floating on the Lower Salt River, riding the trails, and much more.

#5 – Virginia Beach, Virginia

  • Population – 450,057
  • Median Home Price – $267,300
  • Unemployment Rate – 5.30%
  • Cost of Living ( a US average of 100) – 115.6

Virginia Beach is a vibrant coastal city of Virginia Beach that was able to secure the fifth spot on the list. Virginia Beach is home to a rich history and variety of arts and entertainment and family-friendly attraction.

#6 – Mesa, Arizona

  • Population – $52,155
  • Median Home Price – $187,900
  • Unemployment Rate – 6.00%
  • Cost of Living ( a US average of 100) – 113.6

Mesa secured the sixth spot on our list.

The city offer visitors access to the areas most popular natural attractions, including Superstition Mountains, Apache Trail, Salt and Verde Rivers, Usery Mountain Regional Park and area lakes.

#7 – Plano, Texas

  • Population – 281,566
  • Median Home Price – $271,300
  • Unemployment Rate – 4.20%
  • Cost of Living ( a US average of 100) – 119.8

Plano is a city in north Texas that is known as the City of Excellence, so it's no surprise that the city was able to secure the seventh spot on the list.

Plano offers city brims with attractions to enjoy, along with a nice art scene, and over 1,000 restaurants to chose from.

#8 – Chandler, Arizona

  • Population – 245,160
  • Median Home Price – $268,000
  • Unemployment Rate – 4.60%
  • Cost of Living ( a US average of 100) – 123.2

Chandler embodies an active lifestyle with easy access to outdoor recreation with endless family-fun, award-winning events, world-class golf facilities, and a vibrant downtown.

#9 – Lexington-Fayette, Kentucky

  • Population – 315,109
  • Median Home Price – $193,500
  • Unemployment Rate – 6.10%
  • Cost of Living ( a US average of 100) – 95

Lexington secured the ninth spot on our list.

Lexington is seen as the horse capital of the world that is known for horse farms and thoroughbred racetracks Keeneland.

The city also offers street art, nightlife, food, shopping, architecture, history, craft beer, local coffee shops, music and friendly people.

#10 – Irving, Texas

  • Population – 235,648
  • Median Home Price – $155,200
  • Unemployment Rate – 5.00%
  • Cost of Living ( a US average of 100) – 107.5

Irving was able to secure the tenth spot on the list.

Irving is a city between Dallas and Fort Worth that offers convenient access to the DFW International Airport and the entire DFW Metroplex. Irving is known for it's live music, and bringing some of the biggest names to town.

Irving was able to secure the final spot on our top ten list.

Best and Worst Cities for First-time Homebuyers in 2020

1El Paso, TX539.5
2Austin, TX566
3Raleigh, NC578
4Gilbert, AZ596
5Scottsdale, AZ600.5
6Virginia Beach, VA606
7Mesa, AZ612.5
8Plano, TX626
9Chandler, AZ626.5
10Lexington-Fayette, KY637.5
11Irving, TX656.5
12Fort Worth, TX658.5
13Oklahoma City, OK674
14Tampa, FL684.5
15Fort Wayne, IN685.5
16Honolulu, HI686.5
17Colorado Springs, CO693.5
18Charlotte, NC702
19San Diego, CA712.5
20Phoenix, AZ719
20Aurora, CO719
21Omaha, NE721
22Chesapeake, VA726.5
23Denver, CO733.5
24Anaheim, CA (Tie)734.5
24Boise, ID (Tie)734.5
25Jacksonville, FL737.5
26Columbus, OH741.5
27San Antonio, TX744.5
28Louisville, KY745
29Arlington, TX749.5
30Lincoln, NE752
31Irvine, CA752.5
32Madison, WI766
33Chula Vista, CA772.5
34Henderson, NV773
35Glendale, AZ777
36Hialeah, FL777
37Dallas, TX784.5
38Greensboro, NC784.5
39Santa Ana, CA793.5
40Laredo, TX796.5
41Winston-Salem, NC804
42San Jose, CA806.5
43St. Petersburg, FL810
44Philadelphia, PA812.5
45Corpus Christi, TX819.5
46Nashville-Davidson, TN822
47Lubbock, TX832.5
48Fremont, CA833
49Boston, MA841
50Durham, NC847

Source: Mortgage Research Center

Note: Tie indicates that these cities scored the same average ranking.

Data Methodology

In order to determine the 2020 best and worst cities for first-time homebuyers, Mortgage Research Center analyst collected data from the 100 most populated cities in the United States and compared the following dimensions (Quality of Life, Economic Wellness, and Affordability).

We evaluated the strength of each city across those dimensions using 21 relevant variables, which are listed below with their corresponding weights.

Each city was then scored and ranked in each of the 21 variables by multiplying the city’s rank by that variable’s weight. The final rankings were determined by the city’s total score, with the lowest score representing the best city for first-time homebuyers to live.


  • Housing Affordability (Full Weight)
  • Annual Average Property Taxes for $250,000 Home (Double Weight)
  • Median Home Price per Square Foot (Full Weight)
  • Median Household Income Adjusted for Local Cost of Living (Double Weight)

Economic Wellness

  • Foreclosure Rate per 10,000 Homes (Half Weight)
  • Market Temperature (Double Weight)
  • Percentage of Homes that Lowered Home Price within 30 Days of Listing (Full Weight)
  • Average Number of Days on Market (Half Weight)
  • Average Real Estate Tax Rate (Half Weight)
  • Percentage of Monthly Income Spent on Monthly Mortgage Payment (Double Weight)
  • Unemployment Rate (Full Weight)
  • 5 Year Rate of Job Growth: 2013- 2018 (Full Weight)
  • Income Growth Since 2012 (Full Weight)

Quality of Life

  • Pupil-Teacher Ratio (Half Weight) – Note: This metric uses the Best Places (Education Stats) tool.
  • Number of Public Schools in “Top 700 Best US Schools” (Full Weight)
  • Life Expectancy (Half Weight)
  • Crime Index: Safer Than What Percent of US Cities? (Double Weight)
  • Property Crime Rate: lihood of Becoming a Victim per 1,000 Residents (Full Weight)
  • Violent Crime Rate: lihood of Becoming a Victim per 1,000 Residents (Full Weight)
  • Water Quality (Half Weight)
  • Air Quality (Half Weight)


10 Most Affordable Cities To Buy A Home

Top 10 Markets for First-Time Home Buyers

One of the main reasons people buy a home is to build wealth. The common line is: “Why pay someone else’s mortgage and contribute to their equity (via rent) when you can spend the same amount of money or less and reap the rewards?”

But, if you’re in a pricey area, that wealth can quickly get eaten up by a mortgage that resembles a tapeworm—constantly sucking up funds as your bank account shrinks. This is what’s bluntly referred to as being “house poor.”

If you live in an expensive metro, you can eschew the tiny house with a huge price tag and move to greener—and cheaper—pastures. After all, cheaper doesn’t necessarily mean worse.

Read more on home affordability:

Forbes Advisor looked at 100 metro areas with a population of at least 100,000 to identify the top 10 most affordable cities for homebuyers. We looked at several factors to gauge affordability, including the median income of that city, average home costs and median real estate taxes.

“When I saw the list, I smiled. It’s a perfect example of undervalued markets,” says George Ratiu, senior economist with “These are not boom-and-bust cities, they have long-term economic growth potential.”

1. Detroit, Michigan

The Motor City tops the list of most affordable places to buy a home. Despite the median salary being among the lowest of the affordable cities on this list, so are home prices. In fact, median earners in Detroit will spend just about 6% of their monthly income on mortgage payments, which is extremely low.

Although Detroit has suffered major blows over the years—a failing car industry, racism-fueled out-migration to the suburbs and blighted neighborhoods caused by the Great Recession—Detroit has been on the upswing for the last few years.

Major companies General Motors, Ally Financial and Quicken Loans are headquartered in Detroit. Big tech also has a presence there, including Microsoft, Google and LinkedIn. And most recently, Apple announced it would partner with Michigan State University and open its first North American developer academy in Detroit.

“Detroit and the surrounding areas have always been an amazing place to live, work and play.

Belle Isle Park was designed by the same group that designed Central Park in New York City,” says Randolph Barker, president of the Detroit Association of Realtors.

“Our food offerings are diverse and reflect the blended culture of the city. Some of the best things I have ever eaten can be found in Mexicantown, Greektown, Midtown, Corktown and Downtown.”

2. Cleveland, Ohio

Cleveland is not only an affordable city, but it’s a young one, too; the median age is around 36, which is just under the national median. What makes Cleveland special is its liveliness. Situated on Lake Erie, people there enjoy water sports and boat parties.

For nature lovers, there’s an extensive network of nature preserves that surround the city and encompass the Lake Erie beaches. The Cleveland Metroparks system boasts more than 300 miles of walking, bicycle and horse trails, plus picnic areas, nature centers, golf courses and fishing areas.

It’s not just fun and games, however, as the economy in Cleveland is solid and growing. A new public-private partnership between the state of Ohio, three hospitals and two universities, known as the Cleveland Innovation District, is projected to create 20,000 jobs in the next decade.

“Cleveland was not as impacted by the recession caused by the pandemic as the rest of the country,” says Dena Cipriano, senior manager, communications and media relations at the Greater Cleveland Partnership. “The Cleveland metro has a lower unemployment rate than the country as a whole. And we have the second highest growth in the inflow of technology workers of any major metro area during the pandemic.”

3. Toledo, Ohio

Geographically, Toledo is in a prime location. Located on the Western end of Lake Erie, it’s a one-hour drive to Detroit, a two-hour drive to Cleveland and about four hours to Chicago.

Although Toledo has struggled with a depressed economy since the 1980s, in recent years the rust belt city has made strides toward a better future.

According to a report by the Federal Reserve Bank of Cleveland, Toledo saw the most employment growth in construction (6.4% between March 2018 and 2019). Additionally, employment in the financial activities sector also saw positive momentum, as it “grew faster in the metro area (at 1.4%) than it did in Ohio (0.6%) and in the United States (1.3%),” according to the report.

Home to Bowling Green University and the University of Toledo, there are almost three dozen universities and higher learning institutions situated within 60 miles of Toledo, which is an impressive concentration of potentially high-skilled workers.

Toledo’s largest employers include Owens Corning, the Toledo Clinic and HCR Manor Care.

4. Memphis, Tennessee

Memphis is home to about 650,000 people, and the median age is around 34. In fact, this Mississippi Delta city might be primed for a tech surge.

Anthony Young, capital executive in residence at Epicenter, a non-profit designed to support entrepreneurship in the greater Memphis area, recently told the publication AfroTech that Memphis is outpacing other metropolitan cities in terms of Black-owned businesses accessing venture capital. In the Memphis area, some 16% “of early-stage companies accessing VC have a Black founder (it’s about 1% nationwide), and 13% of invested startup capital has gone to companies with a Black founder.”

“Memphis is investable. Memphis outperforms our national peers in capital investments, specifically as we dig into the percentage of Black-led companies gaining access to capital and the fund’s percentage of dollars invested into Black tech startups,” Young says.

Along with a growing tech scene, FedEx, the Tennessee state government and the U.S. government make up the three largest employers in the region. Memphis also saw a 9.88% increase in per capita income from 2018 to 2019, according to data from the Federal Reserve.

And let’s not forget Memphis’ artistic roots, which rival any city. It’s practically synonymous with music—blues, rock n’ roll and Elvis (this is where Graceland is located). It’s no wonder Memphis has been called “the cradle of American music.”

5. Baltimore, Maryland

Baltimore is home to high-profile employers, including John Hopkins University and Northrop Grumman, one of the world’s largest weapons manufacturers and military technology providers. The government is also a big player in Baltimore’s economy, with more than 18% of workers employed by the federal (145,695), state (99,127) or local (245,253) government.

It’s also in a great location, conveniently located less than an hour from Washington, D.C. Using the MARC Penn line from Penn Station, Baltimore residents are able to work in the much more expensive D.C. without paying high D.C. home prices—in just about eight train stops.

One Redditor had this to say about commuting between Baltimore and D.C.:

“I’ve been commuting from Baltimore to D.C. (Dupont Circle, oddly enough) for 8+ years. Pros: You get to live in Baltimore, it’s cheaper than living in D.C., it can be relaxing when working properly. Cons: Huge time suck, but if you get your schedule downright it can be worth it. I would say, give it a try for a few months and see if you can cope.”

6. Rochester, New York

Rochester made our list of most affordable cities—but it could be poised to become slightly less affordable in the future. According to a recent report by real estate analytics firm ATTOM Data Solutions, Rochester was among the metro areas (with a population of at least 1 million in 2020) that saw the biggest leaps in return on investment (ROI) for sellers in the country, up by 49.9%.

It’s also been on the radar of many housing experts as people leave Manhattan for more space and lower housing costs.

“Rochester made our list of top housing markets from 2019,” Ratiu of says. “You see a lot of spillover from New York City. A lot of people move to New York to start careers in their mid-20s, 10 years later they’re struggling to find affordable housing, so they move to places Rochester.”

The University of Rochester and its medical center, with 32,000 employees, is the city’s largest employer.

7. Milwaukee, Wisconsin

Located on the western side of Lake Michigan, Milwaukee is probably best known for its beer-making heritage. In fact, Milwaukee was home to breweries before it actually became a city. Some of the oldest American beer makers come from Milwaukee, including Schlitz, Pabst and Miller. Even the city’s baseball team—the Brewers—pays tribute to its roots.

Milwaukee still has a lively beer scene (there are more than 30 breweries in the area), but these days it’s health care that dominates the economy. With nearly 600,000 residents, the top three employers in Milwaukee are all in the health sector: Aurora Health Care (25,900 employees), Ascension Wisconsin (15,500) and Froedtert Health (10,900).

Milwaukee has become an attractive destination for people fleeing more expensive metro areas, including Chicago, according to data from Apartment List. Just over 90 miles north of the Windy City, Milwaukee median home listing prices are almost half as much as Chicago, which was $370,000 in 2020.

8. Montgomery, Alabama

Montgomery Alabama offers the lowest median annual real estate taxes on this list, totaling about $512 per year. Not only is it a great place for low taxes, but Montgomery also offers promising career opportunities.

Montgomery may fly under the radar, says Ratiu, but that might be a mistake. “Broadly speaking, Alabama has a tremendous aerospace industry.”

Montgomery is home to the who’s who of aerospace companies, including Boeing, Northrop Grumman, the U.S. Department of Defense, Leidos, Raytheon and Lockheed Martin.

In fact, Lockheed Martin broke ground on a 225,000-square-foot facility in 2019. The last time the leading aerospace company invested in the area, in 2014, it delivered on its promise of bringing 224 full-time jobs in over five years.

The automotive industry is another big sector in Montgomery, with Hyundai expecting to add 200 jobs in 2021.

“What’s happening in Montgomery is emblematic of what’s happened in the last 15 years, smaller markets are poised for growth,” Ratiu says. “It is a place where a young family can earn a living, buy a home and build wealth.”

9. Buffalo, New York

Buffalo has gone through a major transformation over the last decade, with new restaurants, entertainment, activities and events popping up year after year. This confluence of businesses and community activities has infused the city (known for its harsh winters) with lots of fun and energy, says Amber Wesser, real estate broker at Hunt Real Estate in Buffalo.

“For many years, people would think of New York and think of New York City, that just is not us,” Wesser says. “From a home sale price or rental price, we are drastically more affordable. Not to mention, we have the best food, of all sorts…but I may be biased.”

The largest city in upstate New York, Buffalo is about seven hours northwest of Manhattan, but, Wesser says, it’s nothing the Big Apple. Buffalo’s population is under 300,000 and, although it was once home to more millionaires per capita than anywhere else on Earth, today Buffalo is an affordable alternative to big city living.

According to data from, Buffalo’s median listing price for a single-family home in 2020 was just $184,000—considerably lower than the national median of around $340,000.

10. Kansas City, Kansas

Some of the most affordable areas for first-time homebuyers are in the Midwest, and Kansas City is definitely an example of that. With median listing prices below $200,000, this could be a great area for buyers on a budget.

And if you happen to be in the healthcare field, even better. Health care is the top industry in Kansas City (not to be confused with Kansas City, Missouri).

The University of Kansas Hospital and the University of Kansas Medical Center employ more than 10,000 people combined.

Because of the location and amount of space, manufacturing and transportation also are major industries here.

Affordable Cities Honorable Mentions

  1. Des Moines, Iowa
  2. Fayetteville, North Carolina
  3. Laredo, Texas
  4. Fort Wayne, Indiana
  5. St. Louis, Missouri
  6. Fort Worth, Texas
  7. Indianapolis, Indiana
  8. Jacksonville, Florida
  9. Wichita, Kansas
  10. Columbus, Ohio

Mid-size Metros Might Not Come With Glitz, But They Do Offer A Shot At Homeownership

Ratiu says that while many people focus on the bright stars, New York or Washington, D.C., mid-sized cities are naively overlooked when it comes to getting both affordability and a strong economy.

Instead of forking over half (or more) of your paycheck on rent, people interested in homeownership can buy a house and have cash left over for retirement savings, the kids’ college funds or even just basic health insurance.

For some, that extra cash might help cross off some of those frame-worthy goals from their wish lists. (We see you, Bora Bora.) You can get all of this by moving to an area that simply costs less.

Of course, moving is not an inexpensive endeavor. And not everyone has the luxury to uproot their lives and plant themselves in a new place. But, as work-from-home flexibilities become more common, moving has become a more viable option.


Forbes Advisor compared 100 cities with a population of 100,000 or more and weighed typical household expenses and home prices against median income to come up with the most affordable cities.

Factors we took into consideration:

  • Median income in 2020. Source: Census Bureau
  • Monthly mortgage payments ( median listing price in 2020, using a 3% fixed interest rate, not including other fees). Source:
  • Monthly food costs. Source: Bureau of Labor Statistics
  • Monthly utilities. Source: Bureau of Labor Statistics
  • Median real estate taxes. Source: Tax Foundation
  • Average state income tax. Source: Tax Foundation


Best Cities for First-Time Homebuyers – 2020 Edition

Top 10 Markets for First-Time Home Buyers

Since March, mortgage rates have fallen steadily. According to Freddie Mac data, the 30-year fixed-rate average was at 2.90% and the 15-year fixed-rate average stood at 2.40% for the week ending September 24, 2020. These rates are 0.74 and 0.

76 percentage points lower, respectively, than a year earlier. Over the same period, Americans have saved more: Bureau of Economic Analysis data shows that though the personal saving rate fell from its record 33.0% in April, the July 2020 personal saving rate of 17.8% is still 10.

1 percentage points higher than last year.

With mortgage rates at all-time lows and Americans saving more than ever, now may be a good time for individuals and families considering homeownership to take a serious look at their options. Buying a home for the first time requires significant research and thought.

Even after qualifying for a mortgage and covering the down payment and closing costs, first-time homeowners must consider their comprehensive financial situation and whether they will be able to make the monthly mortgage payments.

First-time buyers may also want to consider certain city-specific factors such as entertainment options, commute times and job opportunities.

In this study, SmartAsset uncovered the best cities for first-time homebuyers in 2020. We compared 185 of the largest U.S. cities across 12 metrics.

We grouped the metrics into four categories: home market favorability (price-to-rent ratio, five-year home value appreciation and foreclosure rate), affordability (under-45 homeownership rate, down payment-to-income ratio, housing costs as a percentage of income and effective property tax rate), livability (concentration of dining and entertainment establishments, average commute time and violent crime rate) and employment (unemployment rate and five-year change in median household income). For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

Key Findings

  • The Northeast falls behind. No Northeast city ranks in our top 25 cities for first-time homebuyers. The highest-ranking Northeast city is Buffalo, New York, coming in at 43rd, followed by Pittsburgh, Pennsylvania at 64th.

    Both cities rank well in terms of home market favorability, but they fall behind in our employment category. Specifically, the July 2020 unemployment rate was more than 14% in both cities, and median household incomes grew by less than 16% between 2013 and 2018.

  • About half of households under the age of 45 own their home or apartment. The 2018 national homeownership rate is about 64%, though that figure varies widely by age. The under-45 homeownership rate is more than 18 percentage points lower, at roughly 46%. Meanwhile, most older Americans own their homes.

    The homeownership rate for households between 45 and 64 is 71.81% while the over-65 homeownership rate is even higher, at 78.22%.

1. Grand Rapids, MI

Grand Rapids, Michigan ranks in the top fifth of cities for three of the four categories we considered: home market favorability, affordability and employment. It ranks particularly well for home market favorability, with the 42nd-best price-to-rent ratio (13.96) and 49th-highest five-year home value appreciation (53.52%).

Additionally, the state of Michigan has the 15th-lowest foreclosure rate, at 0.25 per 10,000 homes. In the categories of affordability and employment, Grand Rapids ranks within the best 50 all 185 cities for four metrics: high under-45 homeownership rate (40.73%), low down payment-to-income ratio (0.60), low housing costs as a percentage of income (20.

31%) and low July 2020 unemployment rate (8.7%).

2. Henderson, NV

A high percentage of young residents in Henderson, Nevada are homeowners. The city has the 24th-highest under-45 homeownership rate, at 46.34%. Henderson additionally ranks in the top 25 cities for three other metrics.

It has the 16th-lowest effective property tax rate (0.56%), the 22nd-highest concentration of dining and entertainment establishments (almost 12%) and 20th-lowest violent crime rate (less than 200 per 100,000 residents).

3. Virginia Beach, VA

Virginia Beach, Virginia ranks particularly well in the categories of livability and employment. Dining and entertainment establishments make up more than 12% of establishments in the greater county.

In 2018, the average commute time was less than 24 minutes, and there were fewer than 120 violent crimes per 100,000 residents. Regarding employment, Virginia Beach had the 28th-lowest July 2020 unemployment rate (7.

8%) and the 72nd-highest five-year change in median household income (almost 23%) across all 185 cities in the study.

4. Boise, ID

First-time homebuyers might want to consider Boise, Idaho as a spot given the city’s high under-45 homeownership rate and strong performance across home market favorability metrics (i.e. price-to-rent ratio, five-year home value appreciation and foreclosure rate).

Census Bureau data from 2018 shows that almost 46% of Boise households led by individuals younger than age 45 own their house or apartment.

Across the home market favorability metrics we considered, Boise has the 24th-highest five-year home value appreciation (almost 65%) and the state of Idaho has the 24th-lowest foreclosure rate (about 0.31 per 10,000 homes).

5. Fort Wayne, IN

Fort Wayne, Indiana is a very affordable city for individuals or families looking to purchase a home for the first time. Median annual housing costs in the area make up only about 18% of the median household income. Additionally, the 2018 down payment-to-income ratio is 0.

48, the 11th-best in our study. What’s more, many other young individuals have been able to move from renting to homeownership. The under-45 homeownership rate in Fort Wayne is 47.

41%, almost two percentage points higher than the national average and the 21st-highest of all 185 cities in our study.

6. St. Petersburg, FL

St. Petersburg, Florida ranks as the No. 6 city for first-time homebuyers in our study. While the city falls a bit behind on the livability factors we considered, it ranks within the top 20 of the study for the other three categories of market favorability, affordability and employment. The home market in St.

Petersburg is particularly favorable for individuals looking to buy. In 2018, the price-to-rent ratio was 16.25, the 61st-best in our study, and from 2013 to 2018, the median home value rose by more than 70%, the 16th-highest increase overall. Homeowners here also generally contend with lower monthly housing costs.

Median annual housing costs for owners make up less than 22% of the city’s median household income.

7. Omaha, NE

Omaha, Nebraska ranks 31st for the category of livability and 11th for the category of employment. Regarding job opportunities, incomes are rising in the area and unemployment has remained relatively low during COVID-19.

Between 2013 and 2018, the median household income in Omaha rose by almost 25%. As of July 2020, the area’s unemployment rate was less than 7%. It also has the 12th-lowest average commute time in the study (roughly 19 minutes).

8. Garland, TX

Garland, Texas ranks 13th for the category home market favorability and third in the category of employment. Census data from 2018 shows that the ratio between the median valued home and median annual rent in Garland was 12.62, the 27th-best in our study.

Additionally, between 2013 and 2018, the median home value increased by about 56%, the fourth-highest increase of any city in our top 10 and 44th-highest overall. Regarding job opportunities, the July 2020 unemployment rate (8.1%) is the 35th-lowest and the five-year change in median household (almost 32%) is the 26th-highest.

With incomes rising, individuals may be able to put more money toward their savings and potential down payment.

9. Gilbert, AZ

Gilbert, Arizona is the top-ranking city in the study for the affordability category. It has the highest under-45 homeownership rate (69.76%), the 63rd-lowest down payment-to-income ratio (0.70), the sixth-lowest housing costs as a percentage of income (19.

25%) and 22nd-lowest effective property tax rate (0.60%) overall. Gilbert also ranks well in the category of home market favorability.

Across all three metrics in that category – price-to-rent ratio, five-year home value appreciation and foreclosure rate – Gilbert ranks in the top half of cities.

10. Sioux Falls, SD

Sioux Falls, South Dakota ranks in the top third of the study for three of the four categories we considered. Specifically, it places 10th for livability, 45th for affordability and 58th for home market favorability.

Across specific metrics, Sioux Falls has the second-lowest average commute time (less than 17 minutes) and the 13th-highest under-45 homeownership rate (about 53%) overall.

The state of South Dakota has the fifth-lowest foreclosure rate overall, at 0.16 per 10,000 homes.

Sioux Falls ranks 80th in the category of employment. Though unemployment in Sioux Falls is currently low relative to other large U.S. cities and the national average, incomes have remained stagnant in the city over the past several years. Between 2013 and 2018, the median household income in Sioux Falls rose by less than 11%, unadjusted for inflation.

Data and Methodology

To find the best cities for first-time homebuyers, we looked at data on the 200 largest U.S. cities. Complete data was available for 185 of those cities. We compared the 185 cities across four categories:

  • Home market favorability. For our home market favorability category, we considered the price-to-rent ratio, five-year home value appreciation and foreclosure rate. Data comes from the Census Bureau’s 2018 and 2013 1-Year American Community Surveys and It is important to note that foreclosure rate is reported at the state level.
  • Affordability. Our affordability category includes the under-45 homeownership rate, down payment-to-income ratio, housing costs as a percentage of income and effective property tax rate. Data for all four metrics comes from the Census Bureau’s 1-Year American Community Survey.
  • Livability. For our livability category, we considered the concentration of dining and entertainment establishments, average commute time and violent crime rate. Data on establishments and commuting comes from the Census Bureau’s 2018 County Business Patterns Survey and 2018 1-Year American Community Survey. Crime data comes from the I and is for 2018. The concentration of dining and entertainment establishments is reported at the county level.
  • Employment. This includes the July 2020 unemployment rate and the five-year change in median household income. Data comes from the Bureau of Labor Statistics and the Census Bureau’s 2018 and 2013 1-Year American Community Surveys. Unemployment data is reported at the county level.

We ranked each city in every metric and found an average ranking and score for each category. We then calculated a final score by averaging the four category scores. The city with the highest cumulative score ranked at the top of our list, and vice versa.

Home Buying Tips for First-Timers

  • Mortgage management. It is important to know when purchasing a home what you’ll be paying each month and for how long. To get a sense of what that might look , check out SmartAsset’s free mortgage calculator.
  • Buy or rent? Even if you have the savings to buy a first home, be sure the switch makes sense. If you are coming to a city and plan to stay for the long haul, buying may be the better option for you.

    On the other hand, if your stop in a new city will be a short one, you’ll ly want to rent. SmartAsset’s rent vs. buy calculator can help you see the cost differential between purchasing a home or apartment and renting.

  • Seek out trusted advice.

     No matter where you live, a financial advisor can help you get your financial life in order. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes.

    If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Questions about our study? Contact us at

Photo credit: ©


Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: