BAM’s Key Details:

  • A new Zillow analysis ranks the top 10 metros for first-time home buyers
  • Most metros on the list are in the Midwest due to more affordable housing options

It hasn’t been easy for first-time home buyers the past couple of years.

The buying frenzy that began during the pandemic created stiff competition for all, making it challenging to snatch up a house for anyone who didn’t have an all-cash, over-ask offer.

Now that competition has eased in most markets, buyers are faced with affordability issues due to increased home prices and mortgage rates. 

But, as you know, there are always opportunities in real estate.

A new Zillow analysis ranks the top 10 metros for first-time home buyers, with affordability as the top index measured.

Zillow’s Analysis

The Zillow Research team analyzed four indexes of U.S. metros to determine the rankings. The indexes are mortgage affordability, rent affordability, the inventory-to-buyer ratio, and the share of listings with a price cut.

Although housing affordability is extremely challenging these days, some markets will be more hospitable than others for first-time home buyers. These metros are potential hotbeds for those looking to buy their first home. Not only will shoppers find more affordable monthly mortgage costs and have an easier time qualifying for a smaller loan, but rent also is more affordable than elsewhere in the country, shortening the time it takes to save for a down payment.

Orphe Divounguy

senior economist, Zillow

10 Best Metros for First-Time Home Buyers in 2023

top 10 metros for first-time home buyers

Source: Zillow

Based on Zillow’s analysis, here are the top 10 metros for first-time home buyers, along with the typical mortgage and rent affordability as a percentage of income. 

  1. Wichita, KS
    • Mortgage affordability: 32% (typical payment as a percentage of income)
    • Rent affordability: 27% 
  2. Toledo, OH
    • Mortgage affordability: 26%
    • Rent affordability: 29%
  3. Syracuse, NY 
    • Mortgage affordability: 30%
    • Rent affordability: 36%
  4. Akron, OH
    • Mortgage affordability: 28%
    • Rent affordability: 25%
  5. Cleveland, OH
    • Mortgage affordability: 30%
    • Rent affordability: 31%
  6. Tulsa, OK
    • Mortgage affordability: 31%
    • Rent affordability: 31%
  7. Detroit, MI
    • Mortgage affordability: 31%
    • Rent affordability: 31%
  8. Pittsburgh, PA
    • Mortgage affordability: 30%
    • Rent affordability: 33%
  9. St Louis, MO
    • Mortgage affordability: 31%
    • Rent affordability: 27%
  10. Little Rock, AR
    • Mortgage affordability: 32%
    • Rent affordability: 30%

Affordability will likely remain an issue in most metros over the next year. No matter what market you are in, work with buyers in your area to find properties and mortgage options that fit their budget and lifestyle.