- calendar_month February 7, 2023
There are the Great Lakes and the Mississippi River for soaking up nature, standout museums to explore, some of the most highly rated sports teams in the U.S. and easy access to award-winning barbecue (if that’s your thing). But the biggest highlight of the best metros for first-time home buyers? They all share relative affordability.
We’re admiring these 10 metros because, according to a recent Zillow analysis, their residents typically spend a lower share of their income on rent (to make it easier to save up for a home purchase), as well as on their mortgage payments. Plus, shoppers may find themselves facing lower competition for homes thanks in part to favorable for-sale listings-to-shopper ratios — our list features metros that, in October 2022, had as many as five or six times the amount of listings as the number of home shoppers.
Our Zillow research team also factored in the share of price cuts on properties (based on October 2022 data) to determine which cities made the list. We know price cuts like these can be the difference between a dream home and a reality. “These metros are potential hotbeds for those looking to buy their first home,” Zillow senior economist Orphe Divounguy says.
Ready to explore? Here’s what to know about Zillow’s best metros for first-time home buyers.
10. Little Rock, Arkansas
Typical Home Value*: $202,077
As the capital of Arkansas and the biggest city in the state, Little Rock offers homeowners ample opportunities. According to our analysis, shoppers in Little Rock enjoy a 6-to-1 inventory-to-buyer ratio, which means your real estate agent in Little Rock may have a relatively longer list of options for you to browse. What’s more, fewer active buyers compared to active for-sale listings could mean you have less pressure and more time to make those often difficult home-buying decisions, like honing in on your favorite neighborhood, or determining your must-haves from your nice-to-haves.
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9. St. Louis, Missouri
Typical Home Value: $246,369
If you’re craving Midwestern nice and big city life, add St. Louis to your list. You could start as a renter and expect to pay about 27% of your monthly income on lease payments for the typical rental unit (based on the typical local wage), which could help you save up more quickly for a down payment on your first home. If you choose to stay in this Missouri metro, homeownership is relatively more affordable compared to other housing markets across the U.S., with mortgage payments comprising 31%** of homeowners’ incomes, on average. This hovers just above a good rule of thumb for determining what’s an affordable housing payment; you want to try to spend about 30% or less of your income on a mortgage in order to feel less house burdened and have enough funds left over each month for other expenses.
Bonus: If you’re looking for a specific type of architecture for your first home, St. Louis is known for its diversity in home styles and plentiful French Second Empire architecture.
8. Pittsburgh, Pennsylvania
Typical Home Value: $209,041
Pittsburgh made our list of best metros for first-time home buyers for multiple reasons: New homeowners in Pennsylvania’s beautiful Ohio River valley could expect to spend about 30% of their incomes on their monthly mortgage payments, which may leave more cash to take in Steelers games at Heinz Field and Pirates games at PNC Park. Pittsburgh was also home to a significant share of price reductions at the time of our analysis: 28% of listings experienced price cuts in October 2022.
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7. Detroit, Michigan
Typical Home Value: $239,846
Consider heading to Michigan’s largest city if you’re looking for potentially deep discounts on housing. Twenty-eight percent of listings in Detroit experienced price cuts in October 2022. Plus, renters and homeowners alike spend approximately a third of their income on their housing needs, making the metro relatively more affordable than the national average. Detroit is loved for its cultural diversity and proximity to the Great Lakes.
6. Tulsa, Oklahoma
Typical Home Value: $219,513
Looking to move south? Consider putting down roots in Tulsa. Based on the area’s typical wage, both renters and homeowners could expect to spend approximately 31% of their income on their monthly rent or house payments. This metro also had the second-best listings-to-buyer ratio on our list, at 7-to-1. This level of inventory may mean more options and bargaining power for potential home buyers. Tulsa is popular for its bustling downtown Blue Dome Entertainment District, filled with trendy cafes, pubs and boutiques, outdoor recreation along the Arkansas River and the birthplace of Route 66.
5. Cleveland, Ohio
Typical Home Value: $218,775
If you prefer big-city living at budget prices, consider saving Cleveland to your searches and adding email alerts to stay ahead of the competition. Twenty-seven percent of Cleveland listings had a price cut in October 2022. And if you’re buying a home here, expect to typically spend about 30% of your income on monthly mortgage payments, based on the average local income. This could help you free up more cash to spend on entertainment, schooling or savings. Cleveland locals love exploring the shoreline of Lake Erie, learning at the Great Lakes Science Center and reminiscing about their favorite tunes at the Rock & Roll Hall of Fame.
4. Akron, Ohio
Typical Home Value: $211,069
If you’re looking for relatively lower rent costs so you can afford a home sooner, check out Akron. People in this Ohio community typically spend 25% of their monthly income on rent, which is five percentage points lower than the 30% rule of thumb. And when it’s time to get the keys to a home, 28% of salaries go toward typically priced monthly mortgage payments. Akron is located just 40 miles from Cleveland for those who want access to bigger-city jobs and amenities.
3. Syracuse, New York
Typical Home Value: $204,890
Home shoppers who crave winter activities — like the New York State Winter Fair and ice skating at Clinton Square Ice Rink — will feel right at home in Syracuse. Love being indoors? Kids and adults will enjoy spending time at the Museum of Science and Technology and the Erie Canal Museum. Or maybe you’ll want to visit the array of restaurants and entertainment in New York City for the weekend. You can do so in about 5 ½ hours by train. Importantly, 19% of listings in Syracuse had a price cut in October 2022, and homeowners in this New York city typically pay less of their income (30%) on a mortgage than those with a rental (36%).
2. Toledo, Ohio
Typical Home Value: $172,710
If you want to stretch your income a bit further, consider looking at Toledo, which ranked among our most affordable housing markets for its mortgage-to-income ratio. Based on average local incomes, homeowners in this Ohio city typically spend 26% of their income on their monthly mortgage payments. As a bonus, Toledo borders the Western tip of scenic Lake Erie for those who love to fish and swim. Toledo also features a city zoo with a Hippoquarium where you can see the huge animals show off their swimming skills.
1. Wichita, Kansas
Typical Home Value: $199,461
Atop our list is the relatively affordable Midwest city of Wichita. In this large metro area known for its aircraft production industry as well as more than 30 annual festivals and events, the typical renter spends 27% of their income on rent, according to our analysis. This means they may have more wiggle room in their budgets to save for a future home purchase. Wichita’s active for-sale listings to active shoppers ratio was the most favorable on our list, at 22-to-1. This potentially gives buyers more choice, less competition and more time to find the perfect first home. What’s more, in October 2022, 22% of listings in Wichita saw a price cut.
Feeling inspired by our best metros for first-time home buyers? Browse “Cities That Pay You to Move There: A Guide to 11 Programs” for even more moving inspiration.
*Typical home value was calculated in October 2022 to build this analysis. Current typical home values may have changed.
**The typical mortgage payment is calculated based on October 2022 Census data and ZHVI, plus a 10% down payment and a 7.1% 30 yr fixed rate
Editor’s note: The Zillow Best Metros for First-Time Home Buyers data reflects mortgage affordability; rent affordability; the inventory-to-buyer ratio, which indicates available supply; and the share of listings with a price cut. Data was collected in October 2022. The index weighs the affordability metrics more heavily than the other two components. This is because affordability is the biggest challenge facing the housing market today.
The content on this site is not intended to provide legal, financial or real estate advice. It is for information purposes only, and any links provided are for the user’s convenience. Please seek the services of a legal, accounting or real estate professional prior to any real estate transaction. It is not Zillow’s intention to solicit or interfere with any established agency relationship you may have with a real estate professional.
Source: Zillow.
