The 10 best markets for first-time homebuyers in 2022

January 31, 2022 5:00 AM

First-time homebuyers are entering the market at a difficult time. Mortgage rates are set to rise, limited inventory is contributing to rising average home sale prices and more affordably priced homes make up a scant 12.8% of the total U.S. real estate market's value, according to an analysis by Zillow.

Realtor.com ranked the 10 best suburbs ideal for first-time home buyers. The markets, all with populations under 100,000 people and within a 30-minutes’ drive to a larger metro, feature strong job markets, easy access to entertainment and affordability rivaling nearby cities and towns.

“The fact that remote work has given people more flexibility in where they live, we wanted to identify markets where first timers have a chance to become homeowners and find a great quality of life,” Realtor.com® Chief Economist Danielle Hale said in the report.

Realtor.com’s report analyzed 1,112 cities and looked at their share of 25-34 year-old resident; the number of active listings per 1,000 existing households; job opportunities based on the local unemployment rate; the number of amenities based on food and drink establishments per 1,000 households; and forecasted metro home sales and home price growth in 2022. Mortgage and real estate experts from markets across the country told National Mortgage News what makes these suburbs the ideal spot for first-time homebuyers.

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Maitland, Florida

Median Home Listing Price: $427.5K as of December 2021 according to Realtor.com data
Population: 19,543 according to April 2020 U.S. Census Bureau data
Nearest Metro: 8 miles north of Orlando
Local Professional: Andy Lochary, mortgage loan officer at Florida Funding. Lochary has served the Central Florida area for seven years and was a former Maitland resident.

What makes Maitland, Fla. an attractive city for first-time homebuyers?
“In terms of what is there to do, you have all of Orlando. Winter Park and Maitland have amazing restaurants. It’s kind of an upscale area, although Maitland’s a little less expensive. There’s a lot of new construction as well as existing homes. You’re right on (Interstate) 4 so you can jump on 4 or you can go down (State Road) 414 and be at the parks in 25 minutes.”

“There’s plenty to do within a few minutes’ drive. If you drive through Maitland you’re going to see many businesses. Places like Schwab, major corporations, Electronic Arts are there. There’s a lot of major corporations that either have facilities there, or headquarters there. The working environment is very stable, there’s a lot of high-tech industry in Maitland. There are many lakes that are private, many of them are boating lakes. There’s also a variety of condos and townhouses, less expensive than buying a house.”

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Ferndale, Michigan

Median Home Listing Price: $228.5K in December 2021
Population:

19,190

Nearest Metro: 12 miles north of Detroit
Local Professional: Ryan McAllister, founder and president of F5 Mortgage. McAllister has served the Detroit region for eight years and was a former Ferndale resident.

What makes Ferndale, Mich., an attractive city for first-time homebuyers?
“I think it’s a perfect blend of the neighborly, small-town feel, but it also has the big city, big town amenities and conveniences. If you go a 10-minute drive south, you’re in downtown Detroit. It’s one of those areas where, if you go a mile or two in a different direction, you can see drastically different prices, but that’s a benefit. You can have really affordable houses on one street, and the next luxurious. For first-time homebuyers I think it’s a really great hybrid, the best of both worlds.”

“Our block organized a socially-distanced hangout and we hung out with neighbors, we had that small-town neighborly feel. Ferndale itself is awesome for restaurants and little mom-and-pop businesses. If you’re looking for the big franchises or corporate chains, you won’t find that in Ferndale. It’s very LGBTQ+ friendly. They have a pride parade, all the restaurants fly the flag. It’s a huge part of the diversity.”

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Kuna, Idaho

Median Home Listing Price: $490K in December 2021
Population:

24,011

Nearest Metro: 19 miles southwest of Boise
Local Professional: Melissa Nelson, mortgage loan advisor with Capital Mortgage Boise. Nelson has served the Boise region for three years and was born and raised in the area.

What makes Kuna, Idaho an attractive city for first-time homebuyers?
“Kuna and Nampa are growing pretty fast. Kuna’s definitely a one-street, Main Street kind of setup. There’s a ton of homes going in there because they have so much land. Within an hour, maybe 45 minutes, there’s a bunch of wineries, east, west and south of us.”

“It’s a great place to live. I love it here because on the opposite side of the state we get a lot of snow. We still get snow here but it’s gone the next day, it’s a little bit warmer here. I go snowboarding at least once or twice a week, the mountains are only an hour away. Camping, boating, we have a lot of great places here.”

Grimes, Iowa

Median Home Listing Price: $371.8K in December 2021
Population:

15,392

Nearest Metro: 16 miles northwest of Des Moines
Local Professional: Dave Vawter, branch manager at Open Mortgage. Vawter has worked with Open Mortgage for 18 years and has lived in the region for 21 years.

What makes Grimes, Iowa an attractive city for first-time homebuyers?
“Economic development in the area has been almost unprecedented. We’ve got all four seasons here, if you like snowboarding or fat tire biking in the snow. We’ve still got good-quality education here. You can get a nice home, brand new, for well below the national average. The demographics skew young and the existing housing base in the area is affordable.”

“It’s got a very large industrial complex for the job base. It’s got a little bit of old-town, you go downtown and there’s one bar across the street from another. It’s quant, it’s got a lot of room to grow and expand, the north side of Grimes is growing. The quality of life can be as fast-paced or slow-paced as you want.”

Cottage Grove, Wisconsin

Median Home Listing Price: $279.9K in December 2021
Population:

7,303

Nearest Metro: 14 miles east of Madison
Local Professional: Jenna Paez, a real estate agent with The Huemmer Home Team. Paez has worked out of Cottage Grove for the past year.

What makes Cottage Grove, Wisconsin an attractive city for first-time homebuyers?
“Of the suburbs surrounding Madison I’d say it’s definitely one of the more affordable ones. Compared to Madison, I think there’s better-quality homes. A lot of new developments have come up on the east side. It’s very cute. There’s really nice little bake shops, they have multiple parks, there’s some really great schools. There’s a secluded golf course, there’s multiple walking trails.”

“It’s for those that are looking for a nicer subdivision but still want to be close to the east side of Madison. A lot of people commute but there’s lots of local small businesses too. A lot of people like the smaller community, they don’t feel they have to commute to the city.”

Portsmouth, Virginia

Median Home Listing Price: $220K in December 2021
Population:

97,915

Nearest Metro: 3 miles southeast of Norfolk, across the Elizabeth River
Local Professional: Chris Tillet, real estate agent with Crescas Real Estate. Tillett has worked with Cresca for a year-and-a-half after working in the local government for eight years and lives on the Chesapeake-Suffolk-Portsmouth line.

What makes Portsmouth, Virginia an attractive city for first-time homebuyers?
“Portsmouth has a big brand new casino they’re building, they’re doing a lot of infrastructure improvements downtown. Their economic development department is doing a lot to drive business into town, I’d say in another 5-to-10 years they’ll be on par with everybody else. Old Towne Portsmouth is really cool. Most of these cities are 300, 400 years old, we have some really cool history and really cool architecture.”

“Downtown’s really cool to walk by, they do have the waterfront. There’s the children’s museum and a whole bunch of different bars and restaurants. We have the largest navy base in the world, we have a lot of Air Force, Coast Guard and Army folks. Our housing stock is mostly existing homes, early 1900s, you do have a handful of pre-1900s as well. Generally anything that’s being newly built is rehab.”

Beech Grove, Indiana

Median Home Price: $165K in December 2021
Population:

14,717

Nearest Metro: 6 miles southeast of Indianapolis
Local Professional: Chris Hartwell, real estate broker at White Stag Realty. Hartwell has worked in the region for nearly three years, is a former Beech Grove resident and still lives nearby.

What makes Beechgrove, Indiana an attractive city for first-time homebuyers?
“It’s a great area for a first-time homebuyer, just because the price points aren’t inflated. It’s, for being as close to a downtown area, safe, community and family oriented. It’s more of an established, traditional, market as far as the houses go. There’s bungalows, there’s Victorian houses, there’s some vinyl siding houses, you get a little bit of everything.”

“There’s a hospital, you got your medical community. There’s the Amtrak Maintenance Facility right there in Beech Grove that has a lot of jobs as well. You’re 10 minutes into downtown Indianapolis, 5-to-10 minutes away from Fountain Square with new restaurants and bars. There’s several little mom-and-pop restaurants and bars in the Beech Grove area as well. Beech Grove is close to Garfield Park, which is a pretty massive park. They have a lot of concerts and festivals. You can take your dog and walk for hours.”

Mauldin, South Carolina

Median Home Price: $284K in December 2021
Population:

24,724

Nearest Metro: 8 miles southeast of Greenville, N.C.
Local Professional: Shawn Ezell, owner and loan officer at Palmetto State Home Mortgage since 2017.

What makes Mauldin, S.C., an attractive city for first-time homebuyers?
“It’s cheaper, you can get beautiful homes, you can get a little bit of land, you’re not right up on your neighbor. The taxes are extremely low, people are friendly. They’ve got great restaurants, it’s a little quieter. They’ve got great schools. We’ve got the biggest BMW plant in the world in Greer, which is right by Mauldin. We have a big Amazon plant here and Mitsubishi, a lot of the places from up north moved down here.”

“You can go skiing. We’ve got one of the biggest lakes in the South, Lake Hartwell, it’s really close to Mauldin as well. You can get the city life and in Mauldin you can get places where you got the country life. It’s got that small-town quaint feeling, but you don’t have to leave Mauldin.”

Chalco, Nebraska

Median Home Price: $225K in December 2021
Population:

11,064

Nearest Metro: 18 miles southwest of Omaha
Local Professional: Brett Rasmussen, owner, president and mortgage loan originator at Mortgage Specialists for 17 years. Rasmussen was born and raised in the Omaha area.

What makes Chalco, Nebraska an attractive city for first-time homebuyers?
“The average price is right in most peoples’ price range. You’re just outside of town, downtown Omaha is 20 minutes away, it gives everybody equal access to anything. It’s not a new area, it’s that well-aged property that’s built well, from the 70s, 80s, 90s. I’d say most of the homes in that area are 40 years old, they’ve turned over a couple of times, it makes it more affordable.”

“There’s not really any major downtown area, it has a dammed waterfront and because of that dam, there’s a lot of outdoor activities. It’s right off the interstate, so it makes it very convenient to get where you want to go in town. Omaha doesn’t get hit by recessions, we don’t rely on retail or tourism. We have an amazing diversification of many different companies which makes it solid all the way around.”

Magna, Utah

Median Home Price: $375K in December 2021
Population:

29,251

Nearest Metro: 14 miles west of Salt Lake City, Utah
Local Professional: Eric Brown, real estate professional at Real Brokerage. Brown has worked in real estate in the region for five years and was born in Utah.

What makes Magna, Utah an attractive city for first-time homebuyers?
“Magna is the closest point to the west mountains that you can get. It’s been a location that hasn’t had a lot of demand. The growth potential is huge for Magna. “They’re building shipment centers in that area. It’s affordable for people that need to move to that area in order to work.”

“On the back side of the mountains is Tooele, which has great outdoor stuff. There’s a local lake and you’ve got Deseret Peak. You’ve got the West Valley, which is the next valley over, that’s a pretty popular nightlife spot. People will travel from Salt Lake to go to the Westerner, it’s a country music bar. That’s minutes from Magna. The home values are going to increase. As demand comes along in Magna, with more businesses to come, the highest and best use will change what it is.”