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Zillow has released its list of the best markets for first-time buyers, based on four criteria: rent affordability, the ratio of adorable for-sale inventory to renter households, the percentage of households age 29–43, and the share of available inventory on Zillow that the median household can comfortably afford. By “comfortably afford,” it means spending no more than 30% of income on the estimated monthly mortgage cost.
Here’s their list of the best markets for first-time buyers:
- St. Louis, MO
- Detroit, MI
- Minneapolis, MN
- Indianapolis, IN
- Austin, TX
- Pittsburgh, PA
- San Antonio, TX
- Birmingham, AL
- Kansas City, MO
- Baltimore, MD
Our take
With all the concern about housing affordability, it may surprise you that first-time homebuyers are a growing share of the market. Zillow found that first-time buyers accounted for half the buyers last year, while other, more conservative estimates have them making up nearly a third. We know that a lot of this comes down to location, and that’s why this list is so helpful. Though it’s not necessary, real estate investing can be more effective if you invest out of state. Often, the math works out best when you purchase homes in other markets. Use this list to help make your selection.