Adam McCann, Financial Writer

Jul 6, 2020

Buying a home for the first time is an exciting and important milestone for many Americans. Their purchases make up a sizable chunk of the market, too. In the fourth quarter of 2019, 39% of all U.S. single-family home purchases were made by first-time buyers. This year, though, Americans may be conflicted on whether it’s a good time to purchase a first home. While many people have been financially hurt by the COVID-19 pandemic, mortgage interest rates have also hit record lows.

For people willing to take the risk to invest in a house this year, the search for a first home requires careful consideration of a number of factors. Buyers must balance what they want and need with what they can afford. Often, people begin searching for their dream homes without a realistic idea of market prices, interest rates or even their eligibility to get a mortgage.

Where a home is located is just as important as what features it has. If the neighborhood is unpleasant, it can sour the experience of a great home. Potential buyers may want to narrow their search down to an area with a good reputation before getting into housing details.

To simplify the process, WalletHub compared 300 cities of varying sizes across 26 key indicators of market attractiveness, affordability and quality of life. Our data set ranges from cost of living to real-estate taxes to property-crime rate. Read on for our findings, insight from a panel of experts and a full description of our methodology.

Main Findings

Best Places for First-Time Home Buyers





Ranking by City Size

Rank (1= Best) Large Cities (Score) Rank (1= Best) Midsize Cities (Score) Rank (1= Best) Small Cities (Score) 1 Tampa, FL

(62.65) 1 Henderson, NV

(64.60) 1 Thornton, CO

(62.98) 2 Las Vegas, NV

(62.20) 2 Boise, ID

(62.99) 2 Hampton, VA

(60.57) 3 Lexington, KY

(59.68) 3 Chesapeake, VA

(62.89) 3 Arvada, CO

(60.48) 4 Colorado Springs, CO

(58.99) 4 Gilbert, AZ

(62.87) 4 Cedar Rapids, IA

(60.47) 5 Aurora, CO

(58.51) 5 North Las Vegas, NV

(62.02) 5 Centennial, CO

(60.37) 6 Atlanta, GA

(58.30) 6 Peoria, AZ

(61.27) 6 Greeley, CO

(60.35) 7 Virginia Beach, VA

(58.12) 7 Lincoln, NE

(60.91) 7 Longmont, CO

(60.16) 8 Jacksonville, FL

(57.85) 8 Chandler, AZ

(60.90) 8 Westminster, CO

(59.94) 9 Columbus, OH

(57.72) 9 Reno, NV

(60.24) 9 Charleston, SC

(59.88) 10 St. Paul, MN

(57.37) 10 Cape Coral, FL

(60.24) 10 Sterling Heights, MI

(59.78) 11 Louisville, KY

(57.31) 11 Overland Park, KS

(60.24) 11 Murfreesboro, TN

(59.62) 12 Phoenix, AZ

(57.19) 12 Frisco, TX

(59.71) 12 Pueblo, CO

(59.43) 13 Minneapolis, MN

(56.78) 13 Scottsdale, AZ

(59.67) 13 Broken Arrow, OK

(59.29) 14 Mesa, AZ

(56.40) 14 Orlando, FL

(59.67) 14 Kenosha, WI

(59.26) 15 Nashville, TN

(56.26) 15 Cary, NC

(59.05) 15 Naperville, IL

(59.23) 16 Fort Worth, TX

(56.20) 16 McKinney, TX

(58.99) 16 Livonia, MI

(59.20) 17 Raleigh, NC

(55.99) 17 St. Petersburg, FL

(58.80) 17 Surprise, AZ

(59.17) 18 Charlotte, NC

(55.92) 18 Fort Wayne, IN

(58.67) 18 Peoria, IL

(59.01) 19 Denver, CO

(55.73) 19 Grand Rapids, MI

(58.36) 19 Joliet, IL

(58.62) 20 Sacramento, CA

(55.08) 20 Aurora, IL

(58.24) 20 Roseville, CA

(58.43) 21 Oklahoma City, OK

(55.03) 21 Des Moines, IA

(58.12) 21 Palm Bay, FL

(58.39) 22 Omaha, NE

(54.92) 22 Vancouver, WA

(57.63) 22 Elgin, IL

(58.38) 23 Kansas City, MO

(54.87) 23 Elk Grove, CA

(57.56) 23 Allen, TX

(58.27) 24 Cincinnati, OH

(54.79) 24 Tacoma, WA

(57.41) 24 Spokane Valley, WA

(58.07) 25 Pittsburgh, PA

(54.66) 25 Norfolk, VA

(57.01) 25 Portsmouth, VA

(57.93) 26 Indianapolis, IN

(53.99) 26 Port St. Lucie, FL

(56.94) 26 Boca Raton, FL

(57.90) 27 Wichita, KS

(53.20) 27 Glendale, AZ

(56.90) 27 Warren, MI

(57.85) 28 Tulsa, OK

(52.77) 28 Plano, TX

(56.80) 28 Visalia, CA

(57.69) 29 Philadelphia, PA

(52.70) 29 Fort Collins, CO

(56.79) 29 Lakeland, FL

(57.66) 30 Cleveland, OH

(52.61) 30 Tempe, AZ

(56.32) 30 Sunrise, FL

(57.33) 31 Bakersfield, CA

(52.50) 31 Salt Lake City, UT

(56.31) 31 Manchester, NH

(57.27) 32 Arlington, TX

(52.48) 32 Lakewood, CO

(56.25) 32 Hillsboro, OR

(57.07) 33 Tucson, AZ

(52.40) 33 Newport News, VA

(56.24) 33 Roanoke, VA

(56.98) 34 El Paso, TX

(51.78) 34 Richmond, VA

(56.07) 34 Clearwater, FL

(56.98) 35 Milwaukee, WI

(51.74) 35 Durham, NC

(55.94) 35 Dearborn, MI

(56.96) 36 Austin, TX

(51.57) 36 Huntsville, AL

(55.92) 36 Green Bay, WI

(56.56) 37 Fresno, CA

(51.53) 37 Grand Prairie, TX

(55.77) 37 Roswell, GA

(56.52) 38 Baltimore, MD

(51.23) 38 Spokane, WA

(55.24) 38 Yakima, WA

(56.51) 39 Albuquerque, NM

(51.22) 39 Springfield, MA

(55.23) 39 Victorville, CA

(56.19) 40 Riverside, CA

(50.82) 40 Toledo, OH

(55.18) 40 Norman, OK

(56.18) 41 Memphis, TN

(50.81) 41 Pembroke Pines, FL

(55.17) 41 Waukegan, IL

(56.10) 42 San Antonio, TX

(50.35) 42 Madison, WI

(54.50) 42 North Charleston, SC

(55.97) 43 Seattle, WA

(49.45) 43 Akron, OH

(54.44) 43 Rockford, IL

(55.81) 44 Stockton, CA

(49.45) 44 Rochester, NY

(54.31) 44 Clovis, CA

(55.68) 45 St. Louis, MO

(49.42) 45 Garland, TX

(54.12) 45 Davenport, IA

(55.61) 46 Portland, OR

(48.82) 46 Winston-Salem, NC

(53.74) 46 Denton, TX

(55.41) 47 Houston, TX

(48.03) 47 Columbus, GA

(53.41) 47 Federal Way, WA

(55.27) 48 Chicago, IL

(47.60) 48 Irving, TX

(53.27) 48 Temecula, CA

(55.23) 49 San Diego, CA

(46.62) 49 Modesto, CA

(53.25) 49 Wilmington, NC

(55.21) 50 Dallas, TX

(45.86) 50 Greensboro, NC

(52.99) 50 Springfield, IL

(54.92) 51 Anaheim, CA

(45.17) 51 Knoxville, TN

(52.82) 51 Miramar, FL

(54.87) 52 Santa Ana, CA

(44.88) 52 Corona, CA

(52.81) 52 Renton, WA

(54.84) 53 San Jose, CA

(44.59) 53 Lancaster, CA

(52.75) 53 Tuscaloosa, AL

(54.64) 54 Boston, MA

(43.98) 54 Palmdale, CA

(52.73) 54 Allentown, PA

(54.56) 55 New Orleans, LA

(43.17) 55 Salem, OR

(52.72) 55 Everett, WA

(54.37) 56 Washington, DC

(42.59) 56 Worcester, MA

(52.57) 56 Carrollton, TX

(54.32) 57 Honolulu, HI

(42.51) 57 Amarillo, TX

(52.52) 57 Kent, WA

(54.30) 58 Corpus Christi, TX

(42.19) 58 Rancho Cucamonga, CA

(52.27) 58 Vacaville, CA

(54.24) 59 Long Beach, CA

(41.26) 59 Moreno Valley, CA

(51.69) 59 Lowell, MA

(54.20) 60 Miami, FL

(40.44) 60 Fontana, CA

(51.41) 60 Richardson, TX

(54.11) 61 Los Angeles, CA

(36.78) 61 Mobile, AL

(51.24) 61 Murrieta, CA

(54.09) 62 Oakland, CA

(36.76) 62 Ontario, CA

(51.23) 62 Plantation, FL

(54.02) 63 New York, NY

(35.81) 63 Hollywood, FL

(51.05) 63 Davie, FL

(53.89) 64 Detroit, MI

(35.22) 64 Alexandria, VA

(50.93) 64 Brockton, MA

(53.87) 65 San Francisco, CA

(32.74) 65 Montgomery, AL

(50.66) 65 Mesquite, TX

(53.85)

66 Springfield, MO

(50.55) 66 Fort Smith, AR

(53.36)

67 Little Rock, AR

(50.00) 67 High Point, NC

(53.05)

68 Tallahassee, FL

(49.73) 68 Yuma, AZ

(53.02)

69 Irvine, CA

(49.68) 69 Coral Springs, FL

(53.01)

70 Chula Vista, CA

(49.66) 70 Bellevue, WA

(52.68)

71 Providence, RI

(49.66) 71 Savannah, GA

(52.57)

72 Fayetteville, NC

(49.62) 72 Athens-Clarke, GA

(52.52)

73 Santa Clarita, CA

(49.61) 73 Beaverton, OR

(52.46)

74 Baton Rouge, LA

(49.21) 74 Pompano Beach, FL

(52.30)

75 Jersey City, NJ

(49.10) 75 Sandy Springs, GA

(52.21)

76 Eugene, OR

(49.05) 76 West Palm Beach, FL

(52.06)

77 Fort Lauderdale, FL

(48.42) 77 New Bedford, MA

(52.02)

78 San Bernardino, CA

(48.01) 78 Fall River, MA

(51.70)

79 Laredo, TX

(47.54) 79 Miami Gardens, FL

(51.55)

80 Augusta, GA

(47.52) 80 Erie, PA

(51.44)

81 Buffalo, NY

(47.44) 81 Rialto, CA

(51.15)

82 Hayward, CA

(47.09) 82 Quincy, MA

(51.07)

83 Hialeah, FL

(47.00) 83 Ann Arbor, MI

(50.92)

84 Santa Rosa, CA

(46.63) 84 Fairfield, CA

(50.92)

85 Oxnard, CA

(46.47) 85 Gainesville, FL

(50.82)

86 Oceanside, CA

(46.36) 86 Lynn, MA

(50.82)

87 Pomona, CA

(46.33) 87 Lansing, MI

(50.69)

88 Fremont, CA

(46.14) 88 Vallejo, CA

(50.48)

89 Anchorage, AK

(46.06) 89 Antioch, CA

(50.47)

90 Escondido, CA

(45.79) 90 Mission Viejo, CA

(50.41)

91 Shreveport, LA

(45.29) 91 Gresham, OR

(50.34)

92 Huntington Beach, CA

(44.70) 92 Stamford, CT

(50.25)

93 Garden Grove, CA

(44.58) 93 Hartford, CT

(49.80)

94 Birmingham, AL

(44.23) 94 Simi Valley, CA

(49.50)

95 Salinas, CA

(42.79) 95 New Haven, CT

(49.17)

96 Jackson, MS

(41.37) 96 Waterbury, CT

(49.16)

97 Yonkers, NY

(41.28) 97 Santa Maria, CA

(49.14)

98 Sunnyvale, CA

(40.77) 98 Chico, CA

(48.19)

99 Newark, NJ

(40.74) 99 Orange, CA

(47.93)

100 Glendale, CA

(39.25) 100 Concord, CA

(47.82)



101 Norwalk, CA

(47.67)



102 West Covina, CA

(47.29)



103 Carlsbad, CA

(47.27)



104 Albany, NY

(46.98)



105 Thousand Oaks, CA

(46.94)



106 Carson, CA

(46.86)



107 Bridgeport, CT

(46.85)



108 Vista, CA

(46.66)



109 Paterson, NJ

(45.86)



110 Ventura, CA

(45.59)



111 Dayton, OH

(44.77)



112 Downey, CA

(44.37)



113 Fullerton, CA

(43.95)



114 El Cajon, CA

(43.83)



115 Richmond, CA

(43.46)



116 Cambridge, MA

(43.13)



117 Elizabeth, NJ

(43.12)



118 Compton, CA

(42.90)



119 Torrance, CA

(42.75)



120 South Gate, CA

(42.52)



121 Boulder, CO

(42.41)



122 Costa Mesa, CA

(42.25)



123 Flint, MI

(41.74)



124 El Monte, CA

(41.23)



125 Pasadena, CA

(40.99)



126 Santa Monica, CA

(40.70)



127 Inglewood, CA

(40.65)



128 Westminster, CA

(40.64)



129 Burbank, CA

(40.44)



130 Santa Clara, CA

(40.02)



131 San Mateo, CA

(38.20)



132 Miami Beach, FL

(38.12)



133 Daly City, CA

(37.10)



134 Santa Barbara, CA

(35.17)



135 Berkeley, CA

(30.16)

Ask the Experts

Purchasing real estate for the first time can be a scary experience for many consumers. But it doesn’t have to be. For advice and insight, we asked a panel of experts to share their thoughts on the following key questions:

What should first-time home buyers consider when choosing a neighborhood? How do you know that you are financially ready to buy your first home? What do you recommend as the minimum down payment for a first-time home buyer? In what ways has the COVID-19 pandemic changed the home-buying process? Will there be any long lasting effects of the current economic downturn that first-time buyers should consider? How can federal, state and local policymakers responsibly and effectively increase home affordability, particularly for first-time home buyers?

Methodology

To determine the most favorable housing markets for first-time home buyers, WalletHub compared a sample of 300 U.S. cities (varying in size) across three key dimensions: 1) Affordability, 2) Real-Estate Market and 3) Quality of Life.

We evaluated those dimensions using 26 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the most favorable conditions for first-time home buyers. Data for metrics marked with an asterisk (*) were available at the state level only.

Finally, we determined each city’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample. Our sample considers only the city proper in each case and excludes cities in the surrounding metro area. Each city was categorized according to the following population-size guidelines:

Large cities: More than 300,000 people

Midsize cities: 150,000 to 300,000 people

Small cities: Fewer than 150,000 people

Affordability – Total Points: 33.33

Housing Affordability: Triple Weight (~14.28 Points)

Note: This metric was calculated as follows: Median House Price / Median Annual Household Income.

Average Cost of Homeowner’s Insurance*: Full Weight (~4.76 Points)

Cost of Living: Full Weight (~4.76 Points)

Cost per Square Foot: Full Weight (~4.76 Points)

Note: This metric measures specifically the median list price per average home square footage.

Real-Estate Tax Rate: Full Weight (~4.76 Points)

Real-Estate Market – Total Points: 33.33

Rent-to-Price-Ratio: Double Weight (~4.44 Points)

Housing-Market Health Index: Full Weight (~2.22 Points)

Share of Homes Sold in One Year: Full Weight (~2.22 Points)

Median Home-Price Appreciation: Double Weight (~4.44 Points)

Foreclosure Rate: Full Weight (~2.22 Points)

Share of Mortgage Holders with Negative Equity: Full Weight (~2.22 Points)

Note: This metric measures the proportion of mortgage holders whose balance on mortgage is higher than the value of homes.

Buy vs. Rent Breakeven Horizon: Full Weight (~2.22 Points)

Note: The “breakeven horizon” is defined by Zillow as the point, in years, at which buying a home becomes less expensive than renting the same home.

Share of Listings with Price Cuts: Full Weight (~2.22 Points)

Share of Housing Units Built between 2010 and 2018: Full Weight (~2.22 Points)

Building-Permit Activity: Full Weight (~2.22 Points)

Note: This metric measures the number of unit permits pulled per 1,000 residents.

Mortgage Lenders per Capita: Full Weight (~2.22 Points)

Real Estate Agents per Capita: Full Weight (~2.22 Points)

Homeownership Rate for Millennials: Full Weight (~2.22 Points)

Quality of Life – Total Points: 33.33

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Council for Community and Economic Research, U.S. Department of Housing and Urban Development, Zillow, Federal Bureau of Investigation, Insurance Information Institute, AreaVibes, Renwood RealtyTrac and WalletHub research.



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