Top 5 Markets for First-Time Homebuyers

Home prices are rising, and rents are rising even higher in some areas, limiting the markets available to first-time homebuyers. New analysis shows five cities that are first-time buyer-friendly with low competition, expectations of strong growth, and affordable home prices.

Of the five top markets, two are in Texas (Houston and San Antonio), two are in Florida (Tampa and Orlando), and the remaining city is Indianapolis. Tampa and Orlando's home values are between $195,200 and $216,100, and Zillow's home value forecasts over three percent growth for both cities from January 2018 to January 2019. Houston and San Antonio's home value forecast is a bit lower, between 2.3 and 2.7 percent, but the home values are more affordable, between $169,300 and $186,800. Indianapolis' home value forecast is strongest at four percent, and the median home value is currently $143,200.

To find the best markets for first-time buyers, we weighed five metrics: median home values, the Zillow Home Value Forecast, the inventory-to-household ratio, share of listings with price cuts, and the local buy-rent Breakeven Horizon: Markets with a shorter Breakeven Horizon demonstrate a stronger financial incentive for local residents to buy instead of rent.

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