For the past two years, first-time homebuyers have trailed behind in a competitive for-sale market characterized by fast-rising prices and surging mortgage rates, but a few affordable metros could still offer purchasing opportunities. The best markets for first-time buyers in winter/spring 2023 will be determined by mortgage and rent affordability, available supply, and the share of listings with a price cut, Zillow reports.
Already, some metros are showing promising signs of cost relief in a cooling housing market. Wichita, KS tops Zillow’s list of the best markets for first-timers with a 22 to 1 inventory to buyer ratio and price reductions in 22% of regional listings. Following closely behind is Toledo, OH, where the typical rent payment accounts for an average 29% of tenants’ income and 23% of listings are currently seeing price cuts.
Markets with relatively more affordable rent, less competition and higher inventory in the for-sale market in 2023 will provide the best opportunity for home buyers – especially those looking to acquire their first home.
Lower rent shortens the time it takes to save for a down payment. A higher number of active for-sale listings relative to the number of active shoppers means more options and higher bargaining power for potential home buyers in those markets.
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