10 Best Markets for First-Time Homebuyers: 2024
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In 2023, both homebuyers and home sellers largely sat on the sidelines against a backdrop of high interest rates, historically low inventory and listing prices that continued to grow, albeit slowly.
Realtor.com forecasts that this year will continue to be challenging, although it sees a reprieve in price growth and mortgage rates, which should lead to some improved affordability.
Heading into 2024, first-time homebuyers are feeling optimistic. In a survey conducted by Realtor.com and Censuswide in October, 61% of hopeful buyers said 2024 would be a good time to buy.
Danielle Hale, Realtor.com’s chief economist, noted that although affordability will continue to be an issue in 2024, the survey showed that nearly all prospective first-time homebuyers feel they will be able to afford a home within their lifetime, and 40% said they would be able to afford one within the next year.
A new study by Realtor.com indicates that first-time buyers may have their best luck in some unexpected places: a collection of small to midsize towns and cities where affordability meets healthy inventory, culture and liveliness, lower-than-average commute times, forecasted price growth, and good company of similar-aged peers.
Realtor.com’s list of the best markets for first-time homebuyers factored in growth expectations for each market’s surrounding metro area. The study comprised 2,738 cities and places with a population of more than 5,000 that are located within the 100 largest metro areas.
Researchers based their rankings on these criteria:
Share of 25- to 34-year-old homeowner households among all households — U.S. average 5.4%
Availability of homes for sale, measured by active listings per 1,000 existing households in the past 12 months through November — U.S. average 38.6
Affordability, estimated by the ratio of listing prices to gross household incomes of 25- to 34-year-olds in that city for the past 12 months through November — U.S. average $382,230
Average commute time to work — U.S. average 29 minutes
Forecasted metro home sales and home price growth in 2024, as new buyers may want to ensure they locate to a healthy market — U.S. averages -1.7% and 0.1%
An area’s culture and liveliness, estimated by the count of eating, drinking and shopping establishments, and other lifestyle businesses as listed on Yelp in November
Job opportunities, estimated by the forecasted unemployment rate of the city’s surrounding metro area
Although the top 10 cities ranked highly overall, many still have strengths and weaknesses that require prospective buyers to consider trade-offs, according to Realtor.com. Only one town ranked as good as or better than the average city or town for each of the eight metrics that make up the index.
Otherwise, buyers may face trade-offs between inventory availability, real estate market growth, commutes to work or lifestyle.
See the accompanying gallery for the 10 best places for first-time homebuyers in 2024, according to Realtor.com.
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