Zillow names the 10 best metros for first-time home buyers in 2023

Rhea-AI Summary

Zillow's new analysis identifies the best U.S. metros for first-time home buyers, with Wichita, Kansas ranked first due to its affordability. The report states that first-time buyers now make up 45% of all home buyers, a rise from 37% last year. Other top cities include Toledo, Syracuse, and several others in Ohio. Key factors include mortgage affordability, available homes, and a higher percentage of listings with price cuts, indicating favorable conditions for home buyers. The report emphasizes that affordability challenges remain significant.

Positive

• Wichita ranked as the top metro area for first-time home buyers due to affordability and a high share of price cuts.
• First-time home buyers currently represent 45% of total buyers, up from 37% last year, indicating increased market activity.
• The analysis highlights that some metros are becoming more hospitable for first-time buyers amidst affordability challenges.

Negative

• Overall housing affordability continues to be a significant challenge for first-time home buyers.

These places offer the best mix of affordability and selection, and are seeing a higher share of price cuts

• Wichita, Kansas, is the No. 1 metro in the country for first-time home buyers.
• Six metros in the Midwest, including in Kansas, Ohio, Michigan and Missouri, are among the top 10.
• First-time buyers now represent 45% of all buyers, up from 37% last year and in line with the pre-pandemic share.

SEATTLE, Dec. 7, 2022 /PRNewswire/ -- As the share of buyers purchasing a home for the first time rebounds to pre-pandemic levels amid a changing market, a new Zillow analysis rates Wichita, Kansas, as the top area in America for potential first-time home buyers.

Zillow ranked U.S. metros based on factors that included mortgage and rent affordability for first-time home buyers, available homes for sale and the share of listings with a price cut.

"Although housing affordability is extremely challenging these days, some markets will be more hospitable than others for first-time home buyers," said Zillow senior economist Orphe Divounguy. "These metros are potential hotbeds for those looking to buy their first home. Not only will shoppers find more affordable monthly mortgage costs and have an easier time qualifying for a smaller loan, but rent also is more affordable than elsewhere in the country, shortening the time it takes to save for a down payment."

Top 10 best metros for first-time home buyers

1. Wichita, KS
2. Toledo, OH
3. Syracuse, NY
4. Akron, OH
5. Cleveland, OH
6. Tulsa, OK
7. Detroit, MI
8. Pittsburgh, PA
9. St. Louis, MO
10. Little Rock, AR

Wichita, the largest metro in Kansas, landed the top spot largely because of its relative affordability — it's among the top metros where people spend the smallest share of their income on rent and mortgage costs. And it has a higher share of for-sale listings relative to active shoppers, which means more options and bargaining power for potential home buyers. Wichita home shoppers can also find a number of deals popping up, with 22% of listings seeing a price cut in October.

Three Ohio metros — Toledo, Akron and Cleveland — are also among the top 10. Detroit is the largest metro in the top 10, ranking as the nation's 12th largest. St. Louis (18th) and Pittsburgh (22nd) also are on the list and are among the nation's 30 largest metros.

Wichita rose to the top for similar reasons earlier this year when Zillow analyzed the best metros for single renters. Areas with more affordable housing, such as in the Midwest and Great Lakes regions, should see relatively healthier markets and stronger sales in 2023 when compared to other U.S. markets.

"Affordability remains the No. 1 challenge for first-time home buyers," said Amanda Pendleton, Zillow's home trends expert. "If they can overcome that significant hurdle, aspiring buyers have a better chance of landing a home than they've had in several years. They have more options, more time to decide and more negotiating power, meaning they may be able to land their dream home at a discount."

As the market continues to change amid a high-interest-rate environment, Zillow has gathered tools on one easy-to-navigate web page that can help aspiring first-time buyers make the leap to homeownership.

Zillow's top 10 best metros for first-time home buyers1
Metropolitan Area   (Ranked in order of best places for first- time home buyers)	Percentage of income spent on rent   (Based on the typical income in each metro)	Percentage of income spent on monthly mortgage   (Based on the typical income in each metro)	Typical Home Value	Share of listings with a price cut	Estimated inventory- to-buyer ratio
United States	44 %	47 %	$358,423	27 %	6-to-1
Wichita, KS	27 %	32 %	$199,461	22 %	22-to-1
Toledo, OH	29 %	26 %	$172,710	23 %	5-to-1
Syracuse, NY	36 %	30 %	$204,890	19 %	4-to-1
Akron, OH	25 %	28 %	$211,069	29 %	5-to-1
Cleveland, OH	31 %	30 %	$218,775	27 %	6-to-1
Tulsa, OK	31 %	31 %	$219,513	24 %	7-to-1
Detroit, MI	31 %	31 %	$239,846	28 %	6-to-1
Pittsburgh, PA	33 %	30 %	$209,041	28 %	6- to- 1
St Louis, MO	27 %	31 %	$246,369	25 %	4- to- 1
Little Rock, AR	30 %	32 %	$202,077	20 %	6-to-1

Methodology

The Zillow Best Markets for First-Time Home Buyers index captures the extent to which housing market conditions are supportive of home-buying activity, particularly for first-time home buyers. The index employs four variables: mortgage affordability; rent affordability; the inventory-to-buyer ratio, which indicates available supply; and the share of listings with a price cut. Since affordability is the biggest challenge facing the housing market today, the index weighs the affordability metrics more heavily than the other two components. Lower rent shortens the time it takes to save for a down payment. A larger share of listings with a price cut and a higher number of active for-sale listings relative to the number of active shoppers mean more options and greater bargaining power for potential home buyers in those markets.

About Zillow Group

Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting, or financing with transparency and ease.

Zillow Group's affiliates and subsidiaries include Zillow®; Zillow Premier Agent®; Zillow Home Loans™; Zillow Closing Services™; Trulia®; Out East®; StreetEasy®; HotPads®; and ShowingTime+™, which houses ShowingTime®, Bridge Interactive®, and dotloop®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

¹ Based on October 2022 data

View original content to download multimedia:https://www.prnewswire.com/news-releases/zillow-names-the-10-best-metros-for-first-time-home-buyers-in-2023-301696933.html

SOURCE Zillow

FAQ

Which metro is the best for first-time home buyers according to Zillow?

Wichita, Kansas is ranked as the best metro for first-time home buyers, offering affordability and high price cut listings.

What percentage of home buyers are first-time buyers now?

First-time buyers currently represent 45% of all home buyers, an increase from 37% last year.

What factors did Zillow consider in ranking the best metros for first-time home buyers?

Zillow's ranking considered mortgage affordability, rent affordability, the inventory-to-buyer ratio, and the share of listings with price cuts.

What are some other top metros for first-time home buyers besides Wichita?

Other top metros include Toledo, Syracuse, Akron, Cleveland, Tulsa, Detroit, Pittsburgh, St. Louis, and Little Rock.

What challenges do first-time home buyers face in the current market?

Affordability remains the primary challenge for first-time home buyers, impacting their ability to enter the market.