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Best Places to Buy a Home for First-Time Homebuyers

Barri Segal
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Best and Worst Cities for First-Time Homebuyers

Buying your first home shows you’ve achieved a level of financial success and maturity to take on the responsibilities of homeownership. But taking that step is easier in some cities than it is in others.

GOBankingRates looked at a variety of economic data to determine which cities are the best and worst for first-time homebuyers. The rankings include factors like foreclosure rates, share of homebuyers with non-prime credit and the percentage of FHA-insured loans — which over one-third of first-time buyers choose because of low down payment requirements. Keep reading to see the best and worst places for buying a home.

This article originally appeared on GOBankingRates.com: Best Places to Buy a Home for First-Time Homebuyers

If you’re getting ready to be a first-time homebuyer, you might be overwhelmed with all the options that come with your big purchase. At the very least, you have some core decisions to make — and lots of steps to take after that.

After you get your funding together, the next thing you need to research are the best cities to buy a house so you can get the most bang for your buck. To make your job easier, GOBankingRates has put together a list of the 30 best places to buy a home. Cities were ranked on a number of factors, including foreclosure rates and median household listing price. Use this guide to find the best places to buy your first home.

30. Dallas

  • Median list price: $319,900
  • Down payment required: $63,980
  • Salary needed to afford a home: $76,120
  • Foreclosure rate: 0.0359%
  • Housing opportunity index: 46.0

Chicken-fried steak, barbecue, chili, Tex Mex … these are all things you can hold near and dear if you buy your first home in Dallas. You can also look forward to visiting downtown’s Sixth Floor Museum at Dealey Plaza, which commemorates the site of former President John F. Kennedy’s assassination in 1963.

Know: 10 Ways to Get the Best Deal on a New Home

 

29. Salt Lake City

  • Median list price: $369,900
  • Down payment required: $73,980
  • Salary needed to afford a home: $85,920
  • Foreclosure rate: 0.0308%
  • Housing opportunity index: 49.2

If you love the outdoors, consider Salt Lake City as your entry into the housing market. Named by U.S. News & World Report as one of the best places to live, it features five national parks and a number of world-class ski resorts.

28. Cleveland

  • Median list price: $165,450
  • Down payment required: $33,093
  • Salary needed to afford a home: $35,520
  • Foreclosure rate: 0.1202%
  • Housing opportunity index: 81.2

If you don’t mind the roller-coaster ride that is the sports teams here, Cleveland might be one of the best places to buy a home as a first-timer. For the low, low annual price of $10,656 in mortgage costs you can live here and still have a salary under $36,000. It’s one of the few places with houses still near the $100,000 mark.

 

27. Las Vegas

  • Median list price: $300,000
  • Down payment required: $60,000
  • Salary needed to afford a home: $72,320
  • Foreclosure rate: 0.0509%
  • Housing opportunity index: 46.4

Sin City is more than just casinos and nightlife — it’s a great place for first-time homebuyers to invest. For $21,696 in mortgage costs per year you can live in a median list price home and enjoy mild winters, top entertainment and celebrity sightings.

26. Tampa, Florida

  • Median list price: $255,000
  • Down payment required: $51,000
  • Salary needed to afford a home: $63,560
  • Foreclosure rate: 0.0831%
  • Housing opportunity index: 62.5

If you love warm weather all year long, Tampa is a great place for a first-time homebuyer. Your annual mortgage cost would be $19,068 for a median list price home and you’d be close to historic old quarters, such as Ybor City and Old Hyde Park.

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25. Chicago

  • Median list price: $284,000
  • Down payment required: $56,800
  • Salary needed to afford a home: $69,200
  • Foreclosure rate: 0.0690%
  • Housing opportunity index: 65.0

Yes, Chicago is freezing for many months out of the year. But it has deep-dish pizza, so who wouldn’t want to move there? The yearly cost of your mortgage on a median list price home would be only $20,760, which is certainly reasonable when you get to live in a thriving metropolitan area.

24. Detroit

  • Median list price: $189,900
  • Down payment required: $37,980
  • Salary needed to afford a home: $40,280
  • Foreclosure rate: 0.0737%
  • Housing opportunity index: 72.9

The Motor City is attracting first-time homebuyers thanks to its homes’ low median list prices and a cost of living that makes a salary of only $40,280 livable. For only $12,084 per year in mortgage costs, you can get in the market now.

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23. Hartford, Connecticut

  • Median list price: $247,500
  • Down payment required: $49,500
  • Salary needed to afford a home: $62,080
  • Foreclosure rate: 0.0628%
  • Housing opportunity index: 80.9

The capital of Connecticut has a good median list home price, making it one of the best cities to buy a house if you’re starting out in the market. With its museums, live music, theater, sports scene and other attractions, you’ll almost forget about those long winters.

 

 

22. Houston

  • Median list price: $289,500
  • Down payment required: $57,900
  • Salary needed to afford a home: $70,280
  • Foreclosure rate: 0.0387%
  • Housing opportunity index: 57.5

Known as the world capital of space exploration, Houston has a thriving theater scene and an affordable entry price for first-time homebuyers. Move here and you’ll spend around $21,084 per year on your mortgage if you buy a median list price home.

21. Phoenix

  • Median list price: $297,990
  • Down payment required: $59,598
  • Salary needed to afford a home: $71,920
  • Foreclosure rate: 0.0312%
  • Housing opportunity index: 56.1

If you like the desert, Phoenix is a good place to consider buying your first home. You don’t need a huge salary to afford the annual mortgage payments of $21,576 for a median list price home and you’ll be privy to plenty of arts and cultural attractions in addition to historic neighborhoods.

See: This Is the Salary You Need to Afford the Average Home in Your State

 

20. Washington, D.C.

  • Median list price: $420,000
  • Down payment required: $84,000
  • Salary needed to afford a home: $95,640
  • Foreclosure rate: 0.0387%
  • Housing opportunity index: 66.3

Steeped in history, Washington, D.C. is an exciting place to live. And it can be surprisingly affordable, with an annual mortgage cost of just $28,692 for a median list price house. Buy your first home here on the Potomac River and you’ll likely never run out of things to do and see.

19. Milwaukee

  • Median list price: $249,000
  • Down payment required: $49,800
  • Salary needed to afford a home: $62,360
  • Foreclosure rate: 0.0473%
  • Housing opportunity index: 71.3

Like beer? Move here: Milwaukee is famous for its breweries. It’s also famous for being one of the best places to buy a home if you’re just entering the market. You’ll pay just $18,708 per year in mortgage costs to live here.

18. Richmond, Virginia

  • Median list price: $299,900
  • Down payment required: $59,310
  • Salary needed to afford a home: $72,320
  • Foreclosure rate: 0.0376%
  • Housing opportunity index: 74.3

Richmond is about a 2 1/2-hour drive from Washington, D.C., and it is known for its tidy brick row houses. And for $21,696 in mortgage payments per year, you just might be able to snag one of those pretty houses as a first-time homebuyer.

Be Aware: Mortgage Rates Falls Dramatically — What This Means for Homebuyers

17. Charlotte, North Carolina

  • Median list price: $296,548
  • Down payment required: $59,310
  • Salary needed to afford a home: $71,640
  • Foreclosure rate: 0.0497%
  • Housing opportunity index: 66.1

This historic city is a perfect sport for first-time homebuyers. U.S. News and World Report called this Southern jewel, nicknamed the Queen City, one of the 20 best places to live in the U.S. for weather, which goes a long way toward making it one of the best cities to live in.

16. Birmingham, Alabama

  • Median list price: $229,900
  • Down payment required: $45,980
  • Salary needed to afford a home: $48,040
  • Foreclosure rate: 0.0592%
  • Housing opportunity index: 79.6

If you like the heat of the South, then Birmingham could be the right move for you as a homebuyer. With an annual mortgage expense of $14,412, you can live like a king here on just $48,000 per year.

15. Raleigh, North Carolina

  • Median list price: $318,995
  • Down payment required: $63,799
  • Salary needed to afford a home: $76,000
  • Foreclosure rate: 0.0271%
  • Housing opportunity index: 55.2

Known as the City of Oaks, Raleigh is the capital of North Carolina — and an affordable place to buy a first home. Mild winters and a low cost of living make it one very livable city.

Related: The Best Place to Buy a Home in Every State

14. Atlanta

  • Median list price: $279,900
  • Down payment required: $55,980
  • Salary needed to afford a home: $68,400
  • Foreclosure rate: 0.0391%
  • Housing opportunity index: 64.9

The capital of Georgia, “Hotlanta,” is known for its diverse musical heritage, its sports teams and its Southern hospitality. With a yearly mortgage amount of $20,520 for a median list price home, it’s one of the best cities to buy a house if you’re a first-time homebuyer.

13. Columbus, Ohio

  • Median list price: $249,000
  • Down payment required: $49,800
  • Salary needed to afford a home: $62,360
  • Foreclosure rate: 0.0547%
  • Housing opportunity index: 70.4

The capital of Ohio, Columbus is an affordable city with a low foreclosure rate and reasonable median list price for homes. You can live here on a salary of less than $63,000 and still have money to live on after you pay your annual mortgage of $18,708.

12. Minneapolis

  • Median list price: $337,500
  • Down payment required: $67,500
  • Salary needed to afford a home: $79,600
  • Foreclosure rate: 0.0274%
  • Housing opportunity index: 72.6

The North Star State offers plenty of opportunity for first-time homebuyers — and Minneapolis is among the best cities to invest in real estate. You’ll pay just $23,880 a year in mortgage costs if you buy a median list price home, and you’ll establish yourself in the “New England of the West.”

11. Austin, Texas

  • Median list price: $325,105
  • Down payment required: $65,021
  • Salary needed to afford a home: $77,200
  • Foreclosure rate: 0.0146%
  • Housing opportunity index: 54.3

Austin has gained much popularity as of late, so prices have gone up. Still, it’s an affordable city to live in for first-time buyers. You’ll need to make a pretty hefty salary of $77,200 to be comfortable in Austin, but your total mortgage payments for the year will be only $23,160.

10. Cincinnati

  • Median list price: $221,493
  • Down payment required: $44,299
  • Salary needed to afford a home: $46,400
  • Foreclosure rate: 0.0474%
  • Housing opportunity index: 81.1

If you love 19th-century architecture, chances are you’ll love this city in Ohio. You’ll pay only $13,920 per year to live in a median list price house and you’ll need a salary of just $46,400 to get things rolling.

9. Louisville, Kentucky

  • Median list price: $220,000
  • Down payment required: $44,000
  • Salary needed to afford a home: $46,120
  • Foreclosure rate: 0.0611%
  • Housing opportunity index: 75.4

Buy your first home in Louisville, Kentucky, and you can visit the legendary Kentucky Derby. You’ll also be able to afford an annual mortgage bill of $13,836 with room to spare on a salary of only $46,120.

8. Kansas City, Missouri

  • Median list price: $259,000
  • Down payment required: $51,800
  • Salary needed to afford a home: $64,360
  • Foreclosure rate: 0.0365%
  • Housing opportunity index: 74.1

Barbecue and jazz go with Kansas City, Missouri, like millennials go with smartphones. And speaking of millennials, this might be a great place for you for a starter home. Not only can you actually afford to live here, one Kansas City neighborhood, Overland Park, happens to be the top millennial migration city.

Check Out: The Best States for Millennials to Buy a Home

7. Memphis, Tennessee

  • Median list price: $188,900
  • Down payment required: $37,780
  • Salary needed to afford a home: $40,280
  • Foreclosure rate: 0.0450%
  • Housing opportunity index: 70.4

If you love the blues, move to Memphis, Tennessee, one of the best states to invest in real estate. Think about strolling down Beale Street and enjoying spending all that money you have left over from your yearly mortgage payment of just $12,084.

A Broader Look: Best and Worst States for First-Time Homebuyers

 

6. Oklahoma City

  • Median list price: $217,560
  • Down payment required: $43,512
  • Salary needed to afford a home: $45,640
  • Foreclosure rate: 0.0647%
  • Housing opportunity index: 80.4

Think about buying your first home in the Sooner (rather than later) State and you can enjoy your new digs on a salary of only $43,512. Your annual mortgage payment on a median list price home would be only $13,692.

5. Buffalo, New York

  • Median list price: $161,450
  • Down payment required: $32,290
  • Salary needed to afford a home: $34,760
  • Foreclosure rate: 0.0499%
  • Housing opportunity index: 81.7

If you don’t mind some cold weather, Buffalo, New York, is one of the best places to buy a home when you’re starting out. Get into a good first-time homebuyer program and your salary of just $32,390 will easily pay your annual mortgage bill of $10,428.

4. St. Louis

  • Median list price: $189,900
  • Down payment required: $37,980
  • Salary needed to afford a home: $40,380
  • Foreclosure rate: 0.0408%
  • Housing opportunity index: 79.7

The Show Me State has plenty to offer first-time homebuyers — all you need to do is look. If you make just under $41,000, you can afford a home here. Millennials, take note: If you’re just entering the work world, you can still buy a house on what might be a likely starting salary.

3. Virginia Beach, Virginia

  • Median list price: $272,985
  • Down payment required: $54,597
  • Salary needed to afford a home: $67,080
  • Foreclosure rate: 0.0354%
  • Housing opportunity index: 73.8

If you’re a beach lover, consider Virginia Beach, Virginia, for your first house. With an annual mortgage price of $20,124, you’ll have plenty left over from your salary of $67,080, to enjoy life at the sea.

2. Pittsburgh

  • Median list price: $169,900
  • Down payment required: $33,980
  • Salary needed to afford a home: $36,400
  • Foreclosure rate: 0.0497%
  • Housing opportunity index: 81.1

Pittsburgh is a popular place for first-time homebuyers to nab a house. Buy a median list price home and your mortgage payment would be only $10,920 per year. That’s a very affordable way to balance your spending on a salary of only $36,400.

 

1. Indianapolis

  • Median list price: $221,990
  • Down payment required: $44,398
  • Salary needed to afford a home: $46,520
  • Foreclosure rate: 0.293%
  • Housing opportunity index: 86.1

With a very reasonable median home list price and low foreclosure rate (one in every 3.417 homes), Indianapolis is the No. 1 best place to spend your money if you’re a first-time homebuyer. Your annual mortgage payment on a median list price home would be only $13,956, which would leave plenty to live on if you made just under $47,000. That means you could live here and still be able to pay off your student loans.

Related: Move Here If You’re Still Dealing With Student Loans

Choose Wisely

Now that you have a list to get you started shopping in the best cities for first-time homebuyers, it’s important that you know what else to do when you’re in the real estate market for the first time.

First, start saving for a down payment today. That way, when you find the home that’s right for you, you can actually get started buying it. Make sure you accurately calculate what you can afford and compare mortgage lenders to ensure you get the best deal available to you.

Read more about the tax breaks you’ll receive as a homeowner.

More on Real Estate

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Methodology: Cities were ranked according to seven factors, including 1) foreclosure rates, which are based on the number of foreclosure actions to housing units as of February 2019, sourced from RealtyTrac; 2) Median Household Listing Price; sourced from Zillow and using February 2019 data, 3) the down payment it would cost to purchase that home, using a simple 20% of total median home list price equation; 4) the salary needed to afford the Median Home, which was calculated using Zillow’s mortgage calculator with the 30-year fixed-rate set at 4.31%, the rate sourced from the St. Louis Fed on March 20, 2019; 5) the Median Household Income for each city, sourced from the 2017 American Community Survey done by the Census Bureau; 6) the difference between the Median Household Income and salary needed to afford the Median Home for each city; and 7) the Housing Opportunity Index sourced from the National Association of Homebuilders which measures the share of homes sold that are affordable to median income families in a given area. These seven factors were scored and then combined to determine each state’s ranking.