The 10 best cities for first-time homebuyers in 2023

December 26, 2022 5:00 AM

First-time homebuyers seeking relief from lofty home prices and high interest rates can find properties within reach in the nation's less-heralded markets.

The Midwest is home to many of the 10 best cities for first-time homebuyers entering the new year, according to a recent Zillow analysis. Metropolitan areas as far south as Little Rock, Arkansas to as far northeast as Syracuse, New York offer prospective borrowers lower home prices, sizable price cuts and both urban and outdoor lifestyles that are not so different from pricier coastal destinations.

"Not only will shoppers find more affordable monthly mortgage costs and have an easier time qualifying for a smaller loan, but rent also is more affordable than elsewhere in the country, shortening the time it takes to save for a down payment," said Orphe Divounguy, Zillow senior economist in a press release.

Zillow analyzed and ranked metros on mortgage affordability, rent affordability, inventory-to-buyer ratio to indicate supply and the share of listings with a price cut, weighing affordability metrics higher than the other components. National Mortgage News spoke with mortgage and real estate professionals in each market to learn why their cities are attractive options for new homeowners. Their answers have been edited for clarity and length.

Little Rock, Arkansas on the Arkansas River.

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Little Rock, Arkansas

Percentage of income spent on monthly mortgage: 32%
Typical home value: $202,077
Share of listings with a price cut: 20%
Estimated inventory-to-buyer ratio: 6-to-1

Expert: Nicole Nark, owner of HomeWay Realty. Nark has been in the business for five years.

Why is Little Rock attractive for first-time homebuyers?
"You really can't get more bang for your buck than in Little Rock. I would say that [typical home value of $202,077] is probably typical for a 3-bedroom 2-bathroom starter home. A lot of my clients are first-time homebuyers. Being the capital city, we do attract a lot of the millennial homebuyers especially because we have top hospitals here."

"Soma specifically is a very hot neighborhood because it is right off of Main Street, so you can quickly get to downtown where there's farmers markets. You also have tons of walkability. You've got lots of restaurants, coffee shops, little boutiques. Overall, especially for the millennial first-time homebuyers who are looking for a walkable lifestyle, Soma seems to check all of the boxes."

Aerial view of Saint Louis Missouri, USA showing the arch and downtown

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St. Louis, Missouri

Percentage of income spent on monthly mortgage: 31%
Typical home value: $246,369
Share of listings with a price cut: 25%
Estimated inventory-to-buyer ratio: 4-to-1

Expert: Emily Booker, a Realtor with Garcia Properties. Garcia has been working in the St. Louis area for 10 years.

Why is St. Louis attractive for first-time homebuyers?
"In St. Louis, compared to other major cities, you can still buy a house on your first income. I bought my first house at age 25 here. You don't have to wait until you're 30 or 40 to buy a house. There's plenty of inventory between that $200,000 to $400,000 price range. It's a perfect range for a first-time homebuyer."

"I think the surprising thing about St. Louis is it has everything a big city has to offer. The restaurants here I'd say rival anywhere. We have a lot of old historical things that have been running for 150 years. It's a great place to raise kids. There's so much for families to do. Missouri has the most canoeable rivers in the country. There's no kid that doesn't grow up canoeing a river here, which is pretty unique to St. Louis."

Panorama of downtown Pittsburgh skyline at twilight

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Pittsburgh, Pennsylvania

Percentage of income spent on monthly mortgage: 30%
Typical home value: $209,041
Share of listings with a price cut: 28%
Estimated inventory-to-buyer ratio: 6-to-1

Expert: Lynne Bingham, a Realtor with The Bingham Real Estate Team with Howard Hanna Real Estate Services. Bingham has been in the industry for 19 years.

Why is Pittsburgh attractive for first-time homebuyers?
"I've noticed that most of the first-time homebuyers are getting prequalified in the $300,000s, like $300,000-to-$350,000 range. That affords them some of these newer townhome communities. Some of the more hip areas, for example here in Pittsburgh, Lawrenceville has been a very trendy area for first-time homebuyers that are coming in the tech world. Those homes there are really between $300,000 to $500,000."

"As far as the east goes, that's where all of the first-time homebuyers come in that are associated at all with Carnegie Mellon or the University of Pittsburgh, or the whole medical world, because a lot of these people are coming in for the University of Pittsburgh Medical Center."

Detroit, Michigan

Percentage of income spent on monthly mortgage: 31%
Typical home value: $239,846
Share of listings with a price cut: 28%
Estimated inventory-to-buyer ratio: 6-to-1

Expert: Mark Kossel, owner of Midtown Home Mortgage which opened in 2019.

Why is Detroit attractive for first-time homebuyers?
"I would say Detroit is a very inconsistent market. Personally, I just purchased a home and we're also trying to sell a condo. The condo market in Detroit, the price points' above $350,000. It is very tough in that condo market at that price point."

"There's growing neighborhoods, I would say that [typical price of] $200,000, $250,000 price point, I would agree with. First-time homebuyers are really taking advantage of those homes. There is still a lot of new development. Corktown is really popular right now. There's a rebuilt train station. They have construction mapped out for Michigan Avenue. There is just a lot of development in the Corktown area."

Tulsa, Oklahoma

Percentage of income spent on monthly mortgage: 31%
Typical home value: $219,513
Share of listings with a price cut: 24%
Estimated inventory-to-buyer ratio: 7-to-1

Expert: Paul Wheeler, owner/broker and listing specialist at Accent Realtors. Wheeler founded the company in 1992.

Why is Tulsa attractive for first-time homebuyers?
"Affordability is amazing here. You can live like kings and queens compared to other areas. We have people come in from around the world. They're shocked at the house sizes and prices. For $250,000, you can get a couple thousand square foot house that's move-in ready."

"Tulsa's still relatively small. We topped one million residents in our five-county area, but we're bringing in good businesses. We've got great employment opportunities, wages are increasing. We have universities, an educated workforce, and a very diverse community. I'm not from here. It seems like most people aren't. They come from all over the world. It's one of the friendliest places in the U.S."

Cleveland, Ohio

Percentage of income spent on monthly mortgage: 30%
Typical home value: $218,775
Share of listings with a price cut: 27%
Estimated inventory-to-buyer ratio: 6-to-1

Expert: Zach Buescher, a mortgage broker at AMKO Lending. Buescher has worked in the market for approximately three years.

Why is Cleveland attractive for first-time homebuyers?
"I've worked with a ton of clients. They come from New York City, Chicago. If you're working remotely, Cleveland is a great place to get a lot of space. Realistically, that [Zillow price of $4218,775] can get you a four-to-five bedroom house, depending on the area, a 2-bedroom, 3-bathroom, 3,500-to-4,000 square foot home."

"We have one of the best hospital systems in the world. That's why a lot of people who are in that first-time homebuyer range end up in this area: nurses, doctors, people still practicing. There's a lot of fun things to do. We have access to one of the five Great Lakes, which is very underrated and very fun for a lot of different reasons. We're very passionate about all three sports teams. And then there's The Flats, it's right on the water with good restaurants, good bars."

Akron, Ohio

Percentage of income spent on monthly mortgage: 28%
Typical home value: $211,069
Share of listings with a price cut: 29%
Estimated inventory-to-buyer ratio: 5-to-1

Expert: Kevin Wasie, broker/owner at Exactly Real Estate since 2018.

Why is Akron attractive for first-time homebuyers?
"Someone can get a great home for even less than that [Zillow typical home value price of $211,069]. Somewhere in a good school district and somewhere located with access to amenities like great shopping, restaurants and parks for quite frankly even below that, $175,000 to $200,000. A $200,000 house here would be similar to a $270,000 home in a bigger market."

"We have access to the Cuyahoga Valley National Park. A lot of people who live out here are into the outdoors. Akron proper has just done a huge investment into their downtown outdoor space including their civic theater. They redid their performance stage, their outdoor music venue stage, and they got some historic grants to redo a lot of the frontage. They have moved some restaurants closer to downtown, they've also got the Minor League Baseball team and it's home to Akron University. There's a lot going on downtown."

Syracuse, New York

Percentage of income spent on monthly mortgage: 30%
Typical home value: $172,710
Share of listings with a price cut: 23%
Estimated inventory-to-buyer ratio: 4-to-1

Expert: Pete Caspari, a senior mortgage loan officer with Movement Mortgage. Caspari has worked in the business in the region just shy of 15 years.

Why is Syracuse, New York attractive for first-time homebuyers?
"We're definitely seeing more home sales and growth outside the city of Syracuse. Most of our houses, our average right now is something like 14 days on market or less. So it's still a very active market, but instead of 8-to-15 offers, you might only be battling with four offers right now. I've seen people expand their search because they found a better home or better value outside of where they were looking, and decided they would spend the extra 20 minutes commuting."

"You can do most anything you'd like in Syracuse. There's baseball in summer, hockey in fall, and after any of these events, you can end up downtown pubbing or grabbing a bite to eat at the local establishments, a short Uber ride from any of those venues. And at the same time, probably within a half hour to an hour radius, be outdoors with a lot of space."

Toledo, Ohio

Percentage of income spent on monthly mortgage: 32%
Typical home value: $199,461
Share of listings with a price cut: 22%
Estimated inventory-to-buyer ratio: 5-to-1

Expert: Patricia Cary, a production manager at Prime Lending in Toledo. Cary was born and raised in the region, has worked in the business for 25 years, with 10 years at Prime Lending.

Why is Toledo, Ohio attractive for first-time homebuyers?
"Toledo has multiple suburban areas. You can pretty much find a home in whatever price range you want because of that. [The typical home value of $199,461], that's gonna get you a 3-bedroom, bath-and-a-half, detached garage home. We have a lot in that price range, $200,000 and below, and those are first-time homebuyers, turnover-type houses. 3-to-5 year homes."

"There's a lot to do here. We have Triple-A baseball, the Mud Hens. We have the Toledo Walleye hockey team, which brings a huge group of people to the downtown area. Downtown's been revitalized, there's a lot of old warehousing that's been converted to condos down there. Downtown Toledo is definitely booming. We have access to Lake Erie which gives you access to Put-in Bay. It's a huge summer entertainment area."

Wichita, Kansas

Percentage of income spent on monthly mortgage: 47%
Typical home value: $358,423
Share of listings with a price cut: 27%
Estimated inventory-to-buyer ratio: 6-to-1

Expert:: Michael Gonzales, branch manager at Open Mortgage. Gonzales was born and raised in Wichita and has worked in the industry since 2003.

Why is Wichita, Kansas attractive for first-time homebuyers?
"Wichita has a small-town feel, but it's a bigger city compared to other areas. It's pretty amazing the size of home you can get for the purchase price that you're paying. For a first-time homebuyer, you can get some really nice homes for over $200,000. Above $200,000 there's maybe even 3-to-4 bedroom homes you can look at getting. With rates being higher, it may not be 10-to-20 people making offers, but usually I'm making offers with 2-to-3 different people."

"Kansas, you have a lot of land out there so backyards are fairly big. Because we do have tornadoes, most of our homes are built with basements, which essentially doubles the size of your home. Wichita, in terms of outdoors, there isn't a ton of stuff to do. We don't have mountains. If you're a hunter, hunting's a big thing in this area. There's a lot of dining. There's a lot of nightlife."