Americans are finally moving out on their own again, and for the first time since the Great Recession, new owners are outpacing new renters in the housing market.

As millennials age into their mid-30s, they're leading what is expected to be a huge surge in first-time homebuyers, but location has never been more important.

Today's young buyers are more cash-strapped than previous generations, thanks to high levels of student debt and slow income growth over the last decade. Home prices, however, are rising fast, but faster in some places than others. New buyers today are more mobile, thanks to technology in the workforce, so choosing an entry market is key.

"As millennials reach the typical homebuying age, they are coming into a tough housing market with low inventory and lots of competition," said Zillow Chief Economist Svenja Gudell. "More challenging metros aren't out of reach for new buyers, but they should be prepared to face a more competitive buying environment."

Zillow looked at five metrics to determine which local housing markets would serve first-time buyers best: Median home values, value forecasts for equity growth, inventory, the number of listings with price cuts, and the breakeven financial time horizon for buying over renting.