As 2022 is predicted to be another challenging year for homebuyers, Realtor.com ran the numbers to find the best markets for people looking to buy their first. The first annual Best Markets for First-Time Homebuyers Report examines the cities and towns with the best combination of quality of life and affordability that young homebuyers are looking for, with some of these factors being considered including space (square footage), location, and overall home price.
What makes these markets great for first-time homebuyers is their strong job markets, short commute times, various forms of entertainment such as places to eat and drink, a younger population, affordability, and large pool of homes to choose from.
"Buying a first-home is always a challenging undertaking, and it's been an especially tough couple years for first-time buyers, many of whom are struggling to find a home that's within their budget or win in a competitive bidding situation," said Realtor.com Chief Economist Danielle Hale.
The top markets, ranked in order for first-time homebuyers, include:
- Magna, Utah
- Chalco, Nebraska
- Mauldin, South Carolina
- Beech Grove, Indiana
- Portsmouth, Virginia
- Cottage Grove, Wisconsin
- Grimes, Iowa
- Kuna, Idaho
- Ferndale, Michigan
- Maitland, Florida
Some of the reasons these markets are attractive to first-time homebuyers are more homes to choose from–as these markets boast nearly twice the number of homes for sale than the national average, despite the continued nationwide struggle over housing inventory. In 2021, these markets had 72.9 active listings per 1,000 households, compared to the national rate of 44.9 active listings per 1,000 households.
Data shows millennials have taken over, as the 10 best markets for first-time homebuyers all have a younger population than the country overall. Specifically, these areas have an average of 15.2% of residents who are between the ages of 25-34 years old compared to 13.5% of the country overall.
Lifestyle is important to a lot of first-time homebuyers, and the best markets also include plenty of options for a nightlife and entertainment. Our top places for first time homebuyers are located in metros that have an average of 5.3 food and drink establishments per 1,000 households in the broader metro area, higher than other affordable places on our list, which average 5.0.
Sticking to a budget is pertinent for many first-time homebuyers, but the best markets have options for those who were cost-conscious. By comparing the typical home list price to the average income for young adults, Realtor.com® determined that the home-price-to-income ratio in the best markets (3.9) was much lower than the national rate (5.0).
A healthy job market is important when finding a place to settle down, and the best markets for such are located in metro areas that have vast job opportunities. These metro areas included have a forecasted unemployment rate of just 2.7%, well below the national average of 3.6%.
The best markets also offer commutes that are close to home. The average commute time in these markets is 26 minutes, which is 4 minutes faster than the national average. Homebuyers were found to prioritize shorter commute times over nearby entertainment options. Although more Americans are finding themselves working remotely through the pandemic, commute times are still an important factor when choosing a home.
"With this in mind, and the fact that remote work has given people more flexibility in where they live, we identified markets where first timers have a chance to become homeowners and find a great quality of life,” said Hale.
All of the cities on the list are located within metro areas that are forecasted to have strong home sales and price growth. Sales in these surrounding metro areas are projected to grow at 10.2% in 2022, much faster than the national average of 6.6%. Prices are expected to rise by 5.4%, which is significantly higher than the national average rate of 2.9%.
Click here to view more on Realtor.com's Best Markets for First-Time Homebuyers in 2022.