Historically, first-time homebuyers have made up about 40% of all homebuyers in the U.S. However, over the past decade, the share of first-time homebuyers has fallen below that norm, hovering around in the mid-thirties according to data from the National Association of Realtors. In fact, it dipped still further over the past year – falling two percentage points from 33% in 2019 to 31% in 2020 – with many researchers attributing the drop to tightening inventory and rising prices.
Given the increasing number of obstacles first-time homebuyers face, SmartAsset took a closer look at the best cities for them to purchase their first home. We compared 163 of the largest U.S. cities across four categories (a total of 12 metrics). They include home market favorability (price-to-rent ratio, five-year home value appreciation and foreclosure rate), affordability (under-45 homeownership rate, down payment-to-income ratio, housing costs as a percentage of income and effective property tax rate), livability (concentration of dining and entertainment establishments, average commute time and violent crime rate) and employment (unemployment rate and five-year change in median household income). For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section here.
Presented by Smart Asset.