Housing News

The 10 Best Cities for First-Time Homebuyers This Spring

Many aspiring first-time homebuyers have struggled to get a foothold into the housing market for the past few years, squeezed by a limited number of homes for sale and affordability headwinds.

Luckily, that’s changing in some parts of the country. In more housing markets, like Jacksonville, Fla., homebuyers are finding increased options, less competition, and a clearer path to ownership than they have seen in years.

Jacksonville was named the best housing market for first-time buyers, according to a new Zillow analysis. The real estate listings portal looked at the 50 largest metropolitan areas and ranked them based on affordability, housing inventory, competition, and appeal of these locations.

“First-time buyers are finally seeing some light at the end of the tunnel,” Orphe Divounguy, senior economist at Zillow, said in a statement. “Affordability is still a challenge, but rising incomes, stabilizing prices, and improving inventory are creating real opportunities in parts of the country.”

In the top markets, first-time buyers will find more choices, less competition, and “a clearer path to homeownership than they’ve had in years,” added Divounguy.

Why these 10 housing markets are best for first-time homebuyers

The top-ranked housing markets tend to be more reasonably priced, with up to 68% of listings considered affordable for a typical household. A listing is considered affordable if the estimated monthly payment, including taxes, insurance, and maintenance, constitutes no more than 30% of a typical household’s income.

Housing stock has also recovered faster in many of these areas, particularly across the Sun Belt. This means less competition and pressure to make quick offers at or above asking price.

Another reason these markets have an advantage in homebuying is their lower “rent burden,” which measures how much of a household’s income goes toward rent. The lower the burden, the easier it is for renters to save for a down payment and become homeowners.

In the right areas, first-time buyers are finally discovering something that’s been missing for years: options.

Here are the 10 cities where buyers have the best shot right now

1. Jacksonville, Fla.

Rent burden: 23.1%
Affordable listings: 47.8%

Jacksonville ranks at the top of the list due to a strong balance of affordability and housing supply. Nearly half of the listings are affordable for a median-income household, and the number of listings provides buyers with more flexibility than in most major metros.

2. Birmingham, Ala.

Rent burden: 21.1%
Affordable listings: 55.6%

The Magic City stands out for its affordability. More than half of listings are considered affordable, and relatively low rent burdens make it easier for buyers to save for a down payment.

3. San Antonio, Texas

Rent burden: 20.2%
Affordable listings: 47.4%

San Antonio offers affordable home prices and an uptick in listings, giving buyers more choices and less pressure to act quickly.

4. Atlanta

Rent burden: 22.3%
Affordable listings: 45.2%

The Southern city has a large, active housing market with rising housing stock. This helps reduce competition for entry-level buyers.

5. Houston

Rent burden: 22.7%
Affordable listings: 40.2%

Houston’s size and consistent housing supply provide buyers with more negotiating leverage.

6. St. Louis

Rent burden: 19.5%
Affordable listings: 67.7%

St. Louis has one of the highest percentages of affordable listings, making it a potentially good place for first-time buyers to become homeowners.

7. Detroit

Rent burden: 21.8%
Affordable listings: 64.8%

The Motor City area offers affordability along with a fair number of homes for sale, resulting in a unique mix of low prices and available properties.

8. Raleigh, N.C.

Rent burden: 18.4%
Affordable listings: 48.0%

Raleigh’s lower rent burden helps buyers save money. Meanwhile, a growing supply of homes is easing competition in a historically tight market.

9. Baltimore

Rent burden: 21.5%
Affordable listings: 61.8%

The port city provides a good balance of affordability and homes, with most listings accessible to median-income buyers.

10. Louisville, Ky.

Rent burden: 20.9%
Affordable listings: 54.1%

Louisville completes the list with good affordability and manageable competition in the entry-level home market.

What else first-time homebuyers need to know

Even in the most favorable markets, a homebuying strategy still matters. Here are a few tips:

• Take advantage of negotiating room: More homes for sale and less competition can lead to price reductions, closing cost credits, and mortgage rate buydowns. Buydowns can temporarily lower your interest rate in the first years of homeownership.
• Focus your search on areas where affordability fits. Expanding into lower-priced markets can significantly increase your chances of finding a home.
• Stay flexible: Even in strong markets, well-priced homes can still sell quickly, so keep an eye on listings.