Thanks to favorable median home prices, affordability, inventory, and cash buyer competition, cities like Indianapolis and Birmingham may be just what first-time buyers are looking for
First-time homebuyers are probably getting pretty tired of hearing about how hard it is for people in their situation right now. As they toss and turn at night with phrases like ‘stagnant wages,’ ‘low inventory,’ and ‘rapidly rising prices’ running through their heads, the last thing they need is to hear more about these things during the day.
This is especially true for anyone in cities such as Salt Lake City, Washington, D.C., and New York (the three toughest places for first-time homebuyers). However, there are some cities that provide a respite from the difficulties of buying a first home.
Zillow has created a list of the top ten cities in the country that are easiest for first-time buyers by taking into consideration median home values, affordability, inventory, and cash buyer competition. Indianapolis, Ind. took the number one spot with a median home value of $130,200, a high level of inventory (as compared to other major metropolitan areas) and an average of 11 percent of income spent on mortgage payments.
Pittsburgh took the second spot with a median home value of $126,700, a high level of inventory and 10.6 percent of monthly income spent on mortgage payments. Additionally, Pittsburgh had an average cash buyer competition level. Fewer all-cash offers means less competition, as most first-time homebuyers are not going to be able to make an all-cash offer.
Other cities on the list include Memphis (3), Chicago (5), Houston (8), and Tampa (9). One thing all cities on the list have in common is an inventory that ranks as average to high. In fact, seven out of the 10 cities have an inventory that is considered high, something that has become very rare around the country. Another interesting note is that all of the cities on the list are extra appealing to homebuyers due to the difference in monthly income spent on mortgage payments as opposed to rent. The average share of monthly income spent on a mortgage for the 10 cities on the list is just under 12 percent. The average share of monthly income spent on rent is just over 27 percent.