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Affordable monthly mortgage payments, positive home values, and competition are attracting first-time homebuyers to these 10 markets.
Zillow identified the top 10 best markets for first-time buyers based on places where it's more affordable to make a monthly mortgage payment than a monthly rental payment, median home values and competition, including how many homes the first-time buyer has to choose from and whether they are likely to be up against all-cash offers.
At the top of the list for new entrants into the market is Indianapolis, Pittsburgh, and Memphis. Indianapolis has a Zillow Home Value Index of $130,000 and buyers would pay only 11 percent of their monthly income on the mortgage payment compared to 26.1 percent of income for a monthly rent payment.
Buying your first home is a big decision that takes a lot of planning," said Zillow Chief Economist Dr. Svenja Gudell. "First-time buyers across the U.S. are up against high prices and low inventory, but these are the places where the availability of affordable, entry-level homes and the presence of cash-buyers are less of an issue."
Zillow's Top 10 Best Markets for First-Time Home Buyers:
- Indianapolis, Indiana
- Pittsburgh, Pennsylvania
- Memphis, Tennessee
- Cleveland, Ohio
- Chicago, Illinios
- Oklahoma City, Oklahoma
- St. Louis, Missouri
- Houston, Texas
- Tampa, Florida
- Birmingham, Alabama
"First-time buyers in these markets won't have to deal with as many bidding wars or run-away prices; they'll be able to find a first home that fits their needs with less stress," Gudell stated. "With record low mortgage rates, it's a good time to buy a home and certainly worth considering."
Zillow reported that the worst markets for first-time buyers include: Salt Lake City, Utah; Washington, D.C.; New York/Northern New Jersey; Austin, Texas; San Jose, California; Los Angeles-Long Beach-Anaheim, California; Sacramento, California; San Francisco, California; San Diego, California; and Seattle, Washington.
