12 Best Cities for First-Time Homebuyers: 2024

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First-time homebuyers represented 32% of the market in 2023, compared with the historical average of 40%, according to the National Association of Realtors. NAR noted that high home prices, elevated mortgage rates and low inventory are impeding aspiring homeowners looking to make their first purchase.

New homebuyers’ profile has also changed. They are older, in their mid-30s, while first-time buyers in the 1980s were in their late 20s.

And in the last year alone, they needed some $25,000 more in household income to afford higher home prices. Between March 2020 and January 2024, existing-home prices surged by nearly 36%, while household incomes rose by only 23% during that period, NAR reported.

Today, people who are willing and able to invest in a house have to balance what they want and need with what they can afford, according to a new report from WalletHub, a personal finance website. Often, they start searching for their dream home without a realistic idea of market prices, interest rates or even their eligibility for a mortgage.

Prospective buyers may also overlook where a house is located. The joy of finding the ideal home can quickly sour if the neighborhood in which it is located turns out to be undesirable.

“Buying a home for the first time is a very stressful and difficult process, especially when housing prices are through the roof and interest rates have risen sharply in the past few years,” WalletHub analyst Cassandra Happe said in a statement.

“The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward, but they also have a lot of housing choices as well as low crime rates and good schools.”

To determine the most favorable housing markets for first-time homebuyers, WalletHub compared 300 U.S. cities — ranging in size from fewer than 150,000 people to more than 300,000 — across these key dimensions:

Affordability, including housing affordability, cost of living and real estate tax rate
Real estate market, including rent-to-price ratio, median home price appreciation and homeownership rate for millennials
Quality of life, including quality of school system, weather, driver friendliness, and property and violent crime rates

Researchers evaluated these dimensions using 22 relevant metrics, and graded each one on a 100-point scale, with a score of 100 representing the most favorable conditions for first-time home buyers. They then determined each city’s weighted average across all metrics to calculate its overall score.

See the gallery for the 12 best places for people in the market to buy their first home, and how they rank in the three dimensions.

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