Nearly 68% of listings in the top housing markets are affordable to median-income buyers right now. A stat that would’ve sounded impossible just a couple years ago.
A new Zillow analysis shows that conditions in certain markets are becoming more favorable for first-time buyers. Affordability is improving as inventory climbs and competition eases.
Jacksonville, Florida ranks as the top market for first-time buyers in 2026. Birmingham, San Antonio, Atlanta, and Houston follow close behind. These markets offer lower rent burdens and more affordable listings, as well as less competition.
That said, the market isn’t fully back to the “normal” many buyers are waiting for. Inventory is still below pre-pandemic levels in many markets. Mortgage rates, which recently climbed back to around 6.5%, are still limiting affordability.
Overall, compared to last year, conditions are improving, especially in areas where supply is working in buyers’ favor.
The Market Shift: Conditions Are Improving, But Not Easy
For first-time buyers, things are starting to loosen up a bit.
Inventory is still 20% below pre-pandemic norms, but there are more homes on the market now than there were a year or two ago, giving buyers more room to browse and decide.
Affordability has improved compared to last year, though not by a huge margin. Mortgage rates are still sitting around the mid-6% range, which is dragging down the median price many buyers can afford even as incomes rise and price growth cools.
Here’s how Zillow economist Orphe Divounguy explained it:
“First-time buyers are finally seeing some light at the end of the tunnel. Affordability is still a challenge, but rising incomes, stabilizing prices and improving inventory are creating real opportunities in parts of the country.
“In the strongest markets for first-time buyers, they’ll find more choices, less competition and a clearer path to homeownership than they’ve had in years.”
In select markets, more available inventory and reduced competition are giving buyers a clearer path forward than they’ve had in years.
Where Opportunity Exists: Top Markets and What They Share
Some markets are just working better for first-time buyers right now, and Zillow’s rankings show exactly where that’s happening.
Here are the top 10 markets for 2026:
- Jacksonville, FL
- Birmingham, AL
- San Antonio, TX
- Atlanta, GA
- Houston, TX
- St. Louis, MO
- Detroit, MI
- Raleigh, NC
- Baltimore, MD
- Louisville, KY
In these markets, you start to notice the same trends pretty quickly.
Rent takes up a smaller share of income in these areas, giving buyers a better chance to save for a down payment. More listings are priced within reach of median-income households. And in some of these markets, close to half of all homes for sale meet that threshold.
There’s also less pressure when it comes time to make an offer. Buyers aren’t running into the same level of competition seen in higher-cost markets. There are more affordable homes available relative to the number of renters trying to buy.
A lot of this comes down to supply.
Many of these markets have seen inventory come back faster than the rest of the country. That’s especially true in the Sun Belt.
In many Midwestern markets, too, home prices are low enough relative to income that first-time buyers have a much easier time qualifying and competing.
Put together, buyers in these markets have more options and a more realistic path to getting a deal done.
