The U.S. housing market presents a formidable challenge for first-time and middle-income buyers, with the median home price soaring to $402,502, according to Realtor.com's latest data. However, hope persists in mid-sized cities and suburbs, where affordable housing options remain. A recent study by Realtor.com has identified the top ten markets for buying a first home based on affordability, supply, projected price growth, and job availability.
In big cities like Los Angeles and New York City, the ratio of home prices to income remains prohibitively high, deterring younger buyers from entering the market. In contrast, smaller cities such as Harrisburg, Pennsylvania, offer more affordable alternatives. Harrisburg leads the list as the most affordable city for first-time homebuyers, boasting a median home price of $140,000 and a home price-to-income ratio of 2.6.
Realtor.com's analysis considered various factors, including commute times, access to amenities, and quality of life. Population statistics, income data, and commute times were sourced from Claritas estimates, while Moody's Analytics provided unemployment projections. The study focused on cities with at least 5,000 residents and 500 homes for sale, using data spanning December 2023 to November 2024.
Rochester, New York, joins Harrisburg with one of the lowest median home prices in the country at $129,900. Lansing, Michigan, a state capital with affordable homes and ample job opportunities, also ranks among the best markets for first-time buyers. Notably, Florida emerges as a hotspot with three cities making the list: Villas, Lauderdale Lakes, and Altamonte Springs.
The affordability of these markets stems from their ability to offer smaller homes at prices below $250,000. In addition to moderate home prices, these cities provide a favorable balance between income levels and housing costs. This balance is crucial for younger buyers seeking to establish themselves in the housing market without compromising their financial well-being.