First-time buyers on the hunt for a good deal should head Southeast or to the Midwest, according to a new analysis released by Zillow on Friday, Orlando came in as the No. 1 best market for first-time homebuyers. Another Florida city—Tampa—took the No. 2 spot.
According to Zillow’s analysis, Orlando was the most affordable city for first-time homebuyers to purchase in, taking into account median home values, forecasted home values, inventory levels, advantages of buying over renting, and volume of listing price cuts in the area. In March, Orlando’s median home value was $202,900, it had more than 10,000 listings available—17 percent of which had already seen a price cut, and values were forecasted to appreciate 3.8 percent over the year.
Following Tampa, the remaining top 10 best markets for first-time buyers included Indianapolis; Las Vegas; San Antonio; Pittsburgh; Atlanta; Detroit; Dallas; and Cleveland.
“Also making the list are San Antonio, Atlanta, and Dallas,” Zillow reported. “These markets are less competitive, and buyers will see strong growth over the next year as they begin to accumulate equity.”
According to Zillow’s Report on Consumer Housing Trends, first-time homebuyers are having trouble saving for a down payment—and that’s holding them back from purchasing. For buyers in many of Zillow’s top 10 most affordable markets, this may not be as much of a worry.
“In all but three of the 10 best markets for first-time buyers, the median home value is lower than the national median home value, which means they require less money up front as a down payment,” Zillow reported.
The same can’t be said for markets in the Bay Area and Pacific Northwest, though. Thanks to higher home prices and strapped inventory, Zillow says “ buyers in these areas will have to come up with more than $70,000 as a down payment.”
In fact, “a 5 percent down payment in the Bay Area is larger than a 20 percent down payment in most of the best markets for first-time buyers. For buyers who can come up with a down payment, low inventory and few price cuts make these markets especially competitive.”