Buying a home for the first time is an important milestone for many Americans, but achieving it is getting more difficult as prices and interest rates continue to rise. Last year, first-time buyers made up 21 percent of the market, compared to the historical average of 40 percent.
People who are able to invest in a house this year need to balance what they want and need with what they can afford.
To provide first-time home buyers with information, WalletHub, a personal finance website, compared 300 cities of different sizes with 22 indicators of market attractiveness, affordability, and quality of life. The data set ranges from the cost of living to real-estate taxes to the crime rate.
| Best Cities for First-Time Home Buyers | Worst Cities for First-Time Home Buyers | |
| 1. Palm Bay, Fla. 2. Surprise, Ariz. 3. Gilbert, Ariz. 4. Tampa, Fla. 5. Yuma, Ariz. 6. Peoria, Ariz. 7. Boise, Idaho 8. Chandler, Ariz. 9. Orlando, Fla. 10. Murfreesboro, Tenn. | 291. Glendale, Calif. 292. San Mateo, Calif. 293. Los Angeles, Calif. 294. Costa Mesa, Calif. 295. San Francisco, Calif. 296. Anchorage, Ak. 297. Oakland, Calif. Calif. 298. Santa Barbara, Calif. 299. Santa Monica, Calif. 300. Berkeley, Calif. |
“Buying a home for the first time is a very stressful and difficult process, especially when housing prices are through the roof and interest rates have risen sharply in the past few years,” Chip Lupo, WalletHub analyst, said in the report. “The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward, but they also have a lot of housing choices as well as low crime rates and good schools.”
Palm Bay, Fla., is the best city for first-time home buyers in WalletHub’s analysis. It’s among the leading cities in the country when it comes to active home listings per capita and new building permits per capita.
Palm Bay has the fourth-highest millennial home-ownership rate and the fourth-highest home appreciation rate in the country. Palm Bay also has low property-crime rate.
Two Arizona cities, Surprise and Gilbert, rank second and third respectively, in the WalletHub analysis. Surprise has high number of new building permits per capita and Gilbert has a strong job market
“The house is only one part of the decision,” said Michelle Terry, M.D., clinical professor and assistant dean for the underrepresented in medicine and science faculty at the University of Washington School of Medicine. “Families also buy a school district, a commute, a street, a park system, and a daily routine.”
Terry said a cheaper home farther away may cost less each month but take hours from family life.
“A smaller home closer to work may be financially painful but preserve time with children,” she said. A house in a strong school district may stretch the budget but support long-term value. A home near sidewalks, libraries, parks, and community centers may improve daily life more than a remodeled kitchen.”
Terry said for a first-time buyer, the best house isn’t the perfect house, it’s the house that works.
