Nine California cities have been identified as some of the worst cities for first-time home buyers
Whether a newlywed couple or a couple who finally has the financial means, buying a home for the first time is an exciting and important milestone for many Americans.
Their purchases make up a sizable chunk of the market, too. In 2020, 40% of all U.S. single-family home purchases were made by first-time buyers, and 14% more people became first-time buyers than the previous year. This growth is due in part to the fact that interest rates dropped dramatically during the COVID-19 pandemic.
For people willing and able to invest in a house this year, the search for a first home requires careful consideration of a number of factors. Buyers must balance what they want and need with what they can afford. Often, people begin searching for their dream homes without a realistic idea of market prices, interest rates or even their eligibility to get a mortgage.
Where a home is located is just as important as what features it has. If the neighborhood is unpleasant, it can sour the experience of a great home. Potential buyers may want to narrow their search down to an area with a good reputation before getting into housing details.
To simplify the process, WalletHub compared 300 cities of varying sizes across 22 key indicators of market attractiveness, affordability and quality of life. Our data set ranges from cost of living to real-estate taxes to property-crime rate.
To determine the most favorable housing markets for first-time buyers, WalletHub took the pulse of real estate in 300 cities of varying sizes using 22 key metrics. The data set ranges from housing affordability to real-estate tax rate to property-crime rate.
Best Cities for First-Time Home Buyers
1. Chesapeake, VA
2. Gilbert, AZ
3. Lincoln, NE
4. Cape Coral, FL
5. Boise, ID
6. Hampton, VA
7. Peoria, AZ
8. Virginia Beach, VA
9. Norfolk, VA
10. Surprise, AZ
Worst Cities for First-Time Home Buyers
291. Boston, MA
292. Burbank, CA
293. Glendale, CA
294. Santa Barbara, CA
295. San Mateo, CA
296. Los Angeles, CA
297. Santa Monica, CA
298. San Francisco, CA
299. Oakland, CA
300. Berkeley, CA
Best vs. Worst
- Toledo, Ohio, has the most affordable housing (median house price divided by median annual household income), with a ratio of 1.06, which is 19.1 times cheaper than in Santa Barbara, California, the city with the least affordable housing, with a ratio of 20.29.
- Honolulu has the lowest real-estate tax rate, 0.29 percent, which is 12.9 times lower than in Waterbury, Connecticut, the city with the highest at 3.74 percent.
- Rochester, New York, has the highest rent-to-price ratio, 15.88 percent, which is 4.7 times higher than in Sunnyvale, California, the city with the lowest at 3.38 percent.
- New Orleans has the lowest total home-energy cost per month, $97.27, which is 4.8 times lower than in Honolulu, the city with the highest at $470.38.
To view the full report and your city’s rank, click here.
- Our new home: Shutterstock