It’s hard out there for first-time homebuyers.
Home prices are high, as are mortgage rates, insurance premiums, and monthly utility bills — not to mention the costs of everyday living. Meanwhile, a lack of housing supply means that when homes enter the market, there’s competition.
Far too often, first-time homebuyers are at a disadvantage compared to other buyers. Older Americans who are downsizing may be paying with cash, for example.
What Makes These Markets Stand Out
In April, Zillow released a list of metro areas where first-time house hunters may have a better shot at making a purchase. These “top-ranked markets combine lower rent burdens, more affordable listings and less competition, creating a clearer path to homeownership,” the company said in its report.
Jacksonville, Florida, takes the No. 1 spot, with several other metros scattered across the Sun Belt, which remains relatively affordable even after several years of heated price growth.
How Zillow Ranked the Markets
Zillow’s methodology is based on a few factors, including rent affordability, which it defines as the share of median household income typically spent on rent. It also looks at the share of for-sale listings affordable to a median-income household.
In some of the top metro cities, a whopping two-thirds of the listings fit that criteria. The analysis also looks at the number of affordable listings relative to the number of renter households, which could give a sense of how competitive the market is.
Finally, it considers the share of households headed by people aged 29 to 43 — measuring the appeal to younger buyers who may be more likely to purchase a home for the first time than older Americans.
The Top 10 Markets for First-Time Buyers
With all those criteria in mind, Zillow identified Jacksonville as the top spot for first-time buyers. As of February, only 23.1% of household income was spent on the typical rent there, and 47.8% of all listings could be considered affordable. Meanwhile, 36.3% of the population falls in the 29 to 43 age group.
The rest of the top 10 are listed below:
- Birmingham, Alabama
- San Antonio
- Atlanta
- Houston
- St. Louis
- Detroit
- Raleigh, North Carolina
- Baltimore
- Louisville
Reporting by Andrea Riquier, USA TODAY / USA TODAY Network via Reuters Connect
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