Buyers Looking Forward to Homeownership in 2024

Realtor.com unveiled the Best Markets for First-Time Homebuyers in 2024, showing that first-time homebuyers remain optimistic when it comes to buying a home this year, with 61% indicating that now is a good time to buy, per a recent Realtor.com survey.

But in such a volatile market, first-time homebuyers may find the best luck in some unexpected places, according to the report.

Realtor.com's 2024 Housing Forecast ranked 2,738 cities and places with a population of more than 5,000 that are located within the 100 largest metro areas.

The rankings were based on:

• The share of 25 to 34 year old homeowner households among all households.
• The availability of homes for sale, measured by active listings per 1000 existing households in the past 12 months, to ensure that homebuyers have a good amount of choice in their search.
• A measure of affordability, estimated by the ratio of listing prices to gross household incomes of 25 to 34 year olds in that city for the past 12 months.
• A measure of job opportunities, estimated by the forecasted unemployment rate of the city’s surrounding metro area.
• The average commute time to work.
• A measure of the culture and liveliness of an area, estimated by the count of restaurants, cafes, bars, shopping establishments, and other lifestyle businesses such as theaters, comedy clubs, and arts classes as listed on Yelp in November 2023.
• Forecasted metro home sales and home price growth in 2024, as new buyers may want to ensure they locate to a healthy market which will support equity growth and an easy transition when they have outgrown their home.

"Buying a first home can be a daunting task. Couple high interest rates with historically low inventory of homes available for sale in 2023, and hopeful buyers have faced a particularly challenging market," said Danielle Hale, Chief Economist at Realtor.com. "While affordability will remain an issue in 2024, a recent Realtor.com survey showed that 95% of prospective first-time homebuyers overwhelmingly feel that they'll be able to afford a home within their lifetime, with 40% saying they'll be able to afford it within the next year."

Top 10 Markets for First-Time Homebuyers this year:

1. Irondequoit, NY
2. Benton, AR
3. Winterset, IA
4. Newington, CT
5. Council Bluffs, IA
6. Cheektowaga, NY
7. Grand Rapids, MI
8. Moore, OK
9. Mattydale, NY
10. Riviera Beach, MD

The Realtor.com analysis of Best Markets for First-Time Homebuyers revealed a collection of small to mid-size towns and cities that are hidden gems of opportunity where affordability meets healthy inventory, culture and liveliness, lower than average commute times, forecasted price growth, and good company of similar-aged peers.

• Affordability: As one of the biggest purchases consumers will make in their lives, affordability is a major decision-driver. In its analysis, Realtor.com looked at listing prices compared to the gross household incomes of 25- to 34-year-olds in a city for the past 12 months to understand home affordability. A lower ratio indicates a more affordable place to live. The top markets on this year's list had an average 2023 listing price-to-income ratio of 3.1, compared to the national rate of 5.4. Additionally, homes in these towns and cities had an average median listing price that was 42% lower than the national median of $382,000. Within the top 10 list, Mattydale, NY, was the most affordable market relative to local incomes for 25–34-year-olds.
• Investing in growth: Buying a home is not only a large investment up front; it's a commitment for the duration of ownership, which means investing in the ongoing upkeep and maintenance of the home. Naturally, first-time home buyers are looking for homes that fit everything they want but also provide opportunities for their investment to grow. The top markets are located within metro areas that have an average forecasted 2024 home price growth rate of 6.1%, which is considerably higher than the national expected decline of -1.7%. Irondequoit, NY, is located in the metro area with the highest expected median sale price growth rate (10.4%).
• Options to buy: At a time marked by chronically low inventory levels, the top markets had an average count of 40.2 active listings per 1,000 existing households in 2023, and one area in particular, Riviera Beach, MD, had the most active listings per household (59.3 per 1,000) across the list of the top 10.
• Things to do: It's not only about the house but also what surrounds it, and first-time buyers are keen on finding areas that have plenty of things to do. The top places on this year's list have great options for restaurants, cafes, bars, shopping, and entertainment businesses such as theaters, comedy clubs, and arts classes, per point of interest data provided by Yelp. As a group, the top cities and towns have 16.6 of these businesses per 1,000 households, slightly higher than the overall city/town average of 15.6. However, Cheektowaga, NY; Grand Rapids, MI; and Newington, CT. particularly shine, with a ratio higher than 19 per 1,000 households.
• Shorter commutes: The time it takes to get to and from work is a major consideration for home buyers, especially as return trips to the office become more prevalent. With an average expected 2024 commute time of 24 minutes for the top cities on this year's list, they clock in at less than the city/town average of 30 minutes and the national rate of 29 minutes, saving commuters about 50 hours per year for a 5-day commuter. Mattydale, NY, has the lowest average commute time to work, at 20 minutes.
• Youthful towns: Along with having things to do, first-time buyers may want to be close to people in similar life stages and around the same ages. The share of homeowners between the ages of 25 and 34 in this year's top markets is 8.1%, well above the national average of 5.4%. Among the top 10 cities and towns, Riviera Beach, MD, is expected to have the largest share of young adult homeowners (10.9%), which may prove to be a hot spot for the next generation of first-time homebuyers.

To read the full report, including more data, charts, and methodology, click here.