5 Cities Where First-Time Buyers Have an Edge Over Investors

First-time homebuyers are struggling to achieve homeownership, especially as they compete with investors and repeat buyers. Still, first-timers make up a major portion of the starter-home market, according to a recent report from financial services company Neighbors Bank.

The report shows that, on average across the largest 30 U.S. metros, 69% of starter-home purchases are made by first-time buyers. Meanwhile, investors account 31% of starter-home sales.

Of the metros analyzed, the report found that the markets where buyers had the best advantage over investors were Denver, Seattle, Los Angeles, Indianapolis, and Dayton, Ohio.

First-time homebuyers accounted for an impressive 84.31% of starter-home purchases in the Denver, CO metro area, leaving investors with just 15.69%, a significant gap compared to the national average.

This advantage stems partly from Denver’s strict short-term rental (STR) regulations, which prohibit non-owner-occupied properties as STRs, meaning only owner-occupied residents can list their homes. These rules limit investor profitability in popular neighborhoods, subtly favoring long-term residents and owner-occupants over speculative buyers.