Key Details:
- In its 2024 National Housing Forecast, Realtor.com predicts improved housing affordability for buyers—including a reprieve in home price growth and declining mortgage rates—in spite of remaining challenges.
- A recent report highlights ten markets identified as the best options for first-time homebuyers in 2024, based on specific criteria.
Realtor.com has released its list of the 10 best markets for first-time homebuyers in 2024.
As housing affordability has improved from an all-time low point last year, first-time buyers are feeling more optimistic about their odds of becoming homeowners in 2024, according to a recent Realtor.com survey.
Slower home price growth, coupled with a decline in mortgage rates and an uptick in inventory, should make it easier for determined first-time buyers to find and purchase a home this year.
That said, it can be challenging for these buyers to decide, not only if and when they should buy, but also where they should look for their first home.
So, in their 2024 update to the best markets for first-time homebuyers, Realtor.com explored some of the factors that make this year’s top 10 a good fit for first-timers.
And, while relative affordability is still a huge factor, it’s not the only draw.
Buying a first home can be a daunting task. Couple high interest rates with historically low inventory of homes available for sale in 2023 and hopeful buyers have faced a particularly challenging market. While affordability will remain an issue in 2024, a recent Realtor.com® survey showed that 95% of prospective first-time homebuyers overwhelmingly feel that they’ll be able to afford a home within their lifetime, with 40% saying they’ll be able to afford it within the next year.
Behind the ranking: What makes these markets stand out?
For their list of the best markets for first-time homebuyers, Realtor.com looked at the nation’s 100 largest metros (by population), analyzing growth potential for each and ranking them according to key criteria that first-time buyers tend to look for:
They ranked 2,738 cities and places with populations of at least 5,000 located within those top 100 metro areas.
Rankings were based on these criteria:
- Percentage of 25–34 year old homeowner households: The average share of 25–34 year old homeowner households (among all households) in the top 10 markets is 8.1%, compared to 5.4% for the overall list of cities/towns and the national average of 5.4%.
- Availability of for-sale homes—estimated as the number of active listings per 1,000 existing households in the past 12 months: The top 10 markets have an average count of 40.2 active listings per 1,000 existing households, slightly under the list average of 40.5 but well over the national average of 38.6.
- Housing affordability—estimated as the ratio of local listing prices to gross household incomes of 25–34 year olds in a particular city for the past 12 months: The top 10 markets have an average 2023 list price to 25–34 year old income ratio of 3.1, compared to the city/town average of 5.8 and the national average of 5.4.
- Job opportunities—estimated by the forecasted unemployment rate for the city’s surrounding metro area: The top 10 markets are located within metros with an average forecasted 2024 unemployment rate of 3.6%, below the town/city average of 4.2% and the forecasted national rate of 4.2%
- Shorter average work commute—The top 10 markets have an average expected work commute time of 24 minutes—compared to the city/town average of 30 minutes and the national average of 29 minutes—saving 5-day commuters 50 hours per year (not to mention fuel/charges).
- Culture and liveliness—estimated by the number of restaurants, cafes, bars, shopping establishments, and other lifestyle businesses (e.g., theaters, comedy clubs, arts classes) as listed on Yelp in November 2023. “
- Forecasted home sales and home price growth for the surrounding metro area in 2024: The top 10 markets are located in metro areas with an average forecasted 2024 home sales growth rate of 2.2%, compared to the national forecasted rate of only 0.1%.
Based on the above—and a cap of one city/town per major metro area—Realtor.com identified these as their top 10 markets for first-time homebuyers in 2024:
- Irondequoit, NY
- Benton, AR
- Winterset, IA
- Newington, CT
- Council Bluffs, IA
- Cheektowaga, NY
- Grand Rapids, MI
- Moore, OK
- Mattydale, NY
- Riviera Beach, MD
Read the full report for more information, including report methodology.
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