Recent analysis indicates that first-time homebuyers may run into some affordability issues in 2017 if low supply continues to put upward pressure on prices, combined with rising mortgage rates.
Not all housing markets are unkind to those just now entering the market, however. For first-time buyers, access to cities from the suburbs has become the best bet, according to a new analysis by NerdWallet of markets most friendly to new buyers.
NerdWallet gauged affordability, livability, and price stability in 448 markets and came up with an entirely suburb-based top 10 list of best places for first-time homebuyers. Indiana topped the list. The towns of Carmel and Fishers, two suburbs of Indianapolis, were the top two markets in the analysis.
Carmel won out because of an especially strong job market. The unemployment rate is 2 percent and the city is home to more than 40 corporate headquarters. The median home price in 2015 was almost $320,000, but Carmel’s median income last year was nearly $109,000. Meanwhile, residents of Fishers devoted 17 percent of their earnings towards housing, the lowest rate in the country.
Texas placed three markets in the top 10, all in the northern suburbs of Dallas. Frisco, Allen, and McKinney, all enjoying rapid growth, strong economies, and up to $39,000 in mortgage assistance money, proved to be solid markets for first-time buyers, according to the report.
“States like Indiana and Texas dominate the list because they have affordable housing, good schools, and plenty of jobs,” the report stated. “Folks starting out can build a solid financial foundation in these states because they don’t have to devote an outsized portion of their paychecks to housing.”
No large cities made the top 10 list. The suburbs and small towns surrounding metro areas, however, “stand out because they’re close to the amenities and jobs of a big city, often with a more affordable and quieter lifestyle,” the report stated.
Johns Creek, Georgia; Newton, Massachusetts; Gilbert, Arizona; Centennial, Colorado; and Olathe, Kansas rounded out the 10 best markets for first-time buyers.