Buzz
Breaking into the housing market has felt nearly impossible in recent years for many first-time buyers, especially without home equity, substantial savings, or an inheritance to rely on. The challenge is even greater with low supply, high demand, soaring prices, and fierce competition.
Despite these obstacles, first-time homebuyers are finding their way in—comprising nearly half of all buyers last year, a significant rise from 37% in 2021. A recent report from Zillow highlights the 10 best cities for new buyers to consider as starter homes.
Zillow considered four key factors to determine which markets made it onto this sought-after list:
Rent affordability: the percentage of median household income spent on rent.
The portion of available Zillow listings where a median household can afford the monthly mortgage costs without exceeding 30% of their income.
Proportion of affordable homes for sale compared to renter households.
Percentage of households within the 29–43 age range.
The idea here is that when rent is affordable, it takes less time to save for a downpayment on a more affordable home, and with more available inventory, there are better options instead of settling for whatever is available.
The cities on the list are all significant metropolitan areas. St. Louis leads with 67% of homes for sale being affordable, and the median household spends only 20% of their income on rent. All cities on this list have rent costs ranging from 20% to 23%.
Austin, Texas, is an unexpected inclusion at number five. While only 23% of listings in Austin are affordable (much lower than other cities), rent costs take up only 20%, and 34% of households fall within the age group typically ready to buy a home.
The top 10 locations to purchase your first home.
St. Louis
Detroit
Minneapolis
Indianapolis
Austin, Texas
Pittsburgh
San Antonio
Birmingham, Alabama
Kansas City, Missouri
Baltimore
