Florida, Las Vegas Best Markets for First-Time Home Buyers
Last week, we shared a report from Bankrate.com, showing, showing six of the 10 worst metros for first-time home buyers are in California, with San Francisco topping–or rather, bottoming–the list.
Now, Zillow Inc., Seattle, has weighed in with its own list, showing what it believes are the best markets for first-time home buyers. It found three of the best six markets are in Florida, with Tampa topping the list for the second consecutive year.
The company’s 2019 Best Markets for First-Time Buyers Analysis said Tampa was followed by Las Vegas, Phoenix, Atlanta, Orlando and Miami.
Zillow ranked the 35 largest U.S. housing markets based on where first-time buyers should have the most success moving into a home they love with a strong forecasted appreciation. First-time buyers make up 46 percent of all buyers, and more than six in 10 of them are Millennials.
“The shortage of starter homes across the country is finally starting to ease, and that’s good news for would-be first-time buyers who have been saving up to make the leap into homeownership,” said Skylar Olsen, Zillow director of economic research. “Unfortunately, prices of homes in the lower third of the market have risen so much in recent years that for many households’ budgets they no longer qualify as affordable. But markets like Tampa and Las Vegas still provide plenty of bargains.”
Rounding out the top 10 most affordable markets were Detroit, Dallas, Nashville and Charlotte, N.C.
Zillow and Bankrate.com agreed on one thing–six of the nine most challenging markets for new homebuyers are on the West Coast, where prices are high and inventory is tight, led by San Francisco, followed by Seattle, Washington, D.C., Los Angeles, Sacramento, Minneapolis, Denver, San Diego, San Jose and Boston.
The report noted the U.S. housing market has cooled recently and inventory is up 1 percent year-over-year, after being down 8.7 percent last year, the first time inventory has been up heading into home-shopping season in at least five years.
“In even more welcome news for first-time buyers, inventory of less-expensive starter homes has turned around far more, up 4.1 percent after being down 12.9 percent last year,” Olsen said. “Even with this change, there still are not enough homes for sale to meet buyer demand, and the market remains competitive.”
The report noted first-time buyers are naturally disadvantaged compared to other buyers, because they don’t have capital from a previous home sale to help fund a down payment or keep up with bidding wars. And younger first-time buyers have had less time to save for a down payment than most repeat buyers.
“Millennials go into the process knowing that, and help mitigate those difficulties by working harder than previous generations of home buyers–they take more home tours, attend more open houses, do more research about which homes to look at and contact more agents,” Olsen said.
Bankrate ranked Pittsburgh as the best market for first-time home buyers based on affordability and safety. Raleigh, N.C., Oklahoma City, Okla., Hartford, Conn., and St. Louis round out the top five metros for first-time buyers.
