Realtor.com, a proper source of information on current and future housing trends, has predicted the 10 hottest markets for first-time homebuyers, as affordability continues to be a chief concern among them.
The new study, weighed a number of metrics including availability, unemployment, commute time, and forecasted sales growth.
This year, the top markets for first-time homebuyers are:
- Portsmouth, Virginia
- DeForest, Wisconsin
- Windsor Locks, Connecticut
- Gloucester City, New Jersey
- Moore, Oklahoma
- Magna, Utah
- Eggertsville, New York
- Watervliet, New York
- Mattydale, New York
- Somersworth, New Hampshire
So, in general, what makes these towns great? Strong job markets, short commute times, number of restaurants, a younger population, and affordability all rank highly among each other.
"The housing market will continue to be challenging for first-time buyers in the coming year, but for those with a bit of flexibility in where they live, there are markets where young buyers can find not just a relatively affordable home, but a neighborhood that offers a mix of economic opportunity and lifestyle amenities," said Realtor.com Chief Economist Danielle Hale. "Affordability is always a consideration for first-time buyers, but it's also important to make sure that you're settling down in a location that has all the qualities that make it an enjoyable place to live – after all, you're not just buying a house, you're investing in a community."
Other key information that topped this year's most desired amenities as highlighted by Realtor.com includes:
- More homes to choose from: With inventory still near historic lows, having more homes to choose from can make a world of difference. Realtor.com's best markets for first-time homebuyers have an average of 47.8 listings per 1,000 households, higher than the national rate of 45.2. Magna, Utah has the widest selection of listings per household on this year's list.
- Short commutes: Typically, the farther from city centers, the cheaper the homes, but no one wants to spend all day commuting. This year's top towns have an average expected commute time of just 24 minutes. This is significantly faster than the national average of 30 minutes–it would save 50 hours per year for a 5-day commuter. Those looking for an especially short commute should check out Eggertsville, New York, which has an average travel time of just 20 minutes.
- Options for food and drinks: Buying a house doesn't need to mean giving up on a latte or an occasional meal out. The top towns have an average of 5.6 food and drink establishments per 1,000 households in their metro area, higher than the national rate of 5.3. Somersworth, New Hampshire topped the list for proximity to restaurants.
- Younger residents: When it comes to picking a new community, younger buyers are often drawn to younger towns. This year's list has an average of 14.8% of residents in the 25-34 year age category, compared to the national average of 13.4%. Magna, Utah (which also made the 2022 list) tied Moore, Okla. as the youngest markets on the list.
- Affordability: With high home prices and interest rates, affordability is a key factor for first-time homebuyers. The best markets offer an average 2022 listing price to income ratio of 3.5 for 25- 34 year-olds, much lower than the national rate of 5.1. Mattydale, New York and Gloucester City, New Jersey tied for the most affordable locations on the list.
- Strong housing markets: A home is an investment, and this is especially true for first-time buyers who are likely investing a large portion of their savings into a home. To help best protect that investment, it's important to buy in a location that has a strong local housing market and is likely to hold its value, if not appreciate. This year's markets are located within metro areas that have an average forecasted 2023 home sales growth rate of 1.2%, higher than the national rate which is expected to decline -14.1%. In terms of price growth, Somersworth, New Hampshire is located within the Boston metro area which is expected to have the highest growth in 2023 among the 10 places on our list (+9.5%), followed closely by the Madison metro area containing DeForest, Wisconsin (+9.0%).
Click here for the complete list of cities best for first-time buyers.