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The Choosi Blog

The Best and Worst Cities for First-Time Homebuyers in 2023

As a first-time homebuyer, finding the right city to buy a home in can be a daunting task. Home prices are soaring, and finding an affordable home in a city with a strong job market and high marks for wellness and cultural amenities can be challenging.

That's where Bankrate's Best Metros for First-Time Homebuyers study comes in. The study ranked 50 metropolitan areas across four categories: housing prices in relation to local wages, the tightness of the local housing market, the employment picture, and wellness and culture. Here are the highlights:

Best Metros for First-Time Homebuyers

  1. Austin: This Texas metro area ranks as the most attractive place for first-time buyers, thanks to its booming job market and high marks for wellness and culture. However, with a median home price of $565,000 as of September 2022, Austin can be a challenging market for young buyers looking for a starter home.

  2. Kansas City: The Kansas City metro area ranked No. 3 in affordability and No. 11 in market tightness. However, its ranking was pulled down by middle-of-the-pack showings in job market and wellness and culture.

  3. Raleigh: Raleigh ranks No. 1 in market tightness, or lack thereof. In this category, Bankrate graded metro areas by how many homes were for sale compared to a year ago, and how quickly those homes sell. In the other three categories, the Research Triangle region (which includes nearby Durham and Chapel Hill) ranked outside the top 10, but still above average.

  4. Minneapolis: The Twin Cities region placed fifth in the labor market category, thanks to a low unemployment rate, strong job growth and short commutes. While it didn’t dominate in any other category, the metro area performed well overall, posting top 20 finishes in wellness and affordability.

  5. Jacksonville: This northern Florida metro area placed in the top 10 in the job market category and housing market tightness.

Worst Metros for First-Time Homebuyers

  1. Riverside: This California metro area offers more affordable homes inland than in beachside cities like San Diego. However, long commute times and lower incomes compared to coastal Southern California make affordability a challenge.

  2. San Diego: While San Diego ranks No. 4 in wellness and culture, it ranks 49th out of 50 in affordability, making it a challenging market for first-time buyers.

  3. New York City: The largest metro area in the U.S. had back-of-the-pack showings in Bankrate’s job market and affordability categories. The lone bright spot was a No. 3 showing in wellness and culture. (NY is not affordable...we're shocked!)

  4. Boston: Boston ranks 46th in affordability, and its rankings in the other three categories were in the middle of the pack.

  5. Washington, D.C.: The nation’s capital ranks 44th in job market, a result of weak job growth and long commutes. In another poor showing, D.C. ranks 39th in market tightness. Its only top 10 finish came in wellness and culture.

When considering a potential city, it's important to weigh the cost of living, job market, and availability of cultural and wellness amenities. Other factors to consider include the local housing market, such as median home prices and inventory levels, as well as the availability of financing options like FHA and VA loans.

Ultimately, the best city for first-time homebuyers will depend on their circumstances and preferences. However, using studies like Bankrate's can help narrow down the search and provide a starting point for further research and consideration. Whether you're looking to buy your first home or your fifth, taking the time to research and carefully consider your options can help ensure a successful move.

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