Many first-time homebuyers are finding it increasingly difficult to purchase a home of their own amidst the current high housing prices and consistently high mortgage rates. However, new data reveals that there are still some cities in the United States that provide more favorable opportunities for first-time homebuyers.
According to personal finance website “WalletHub,” on Tuesday, they released the latest data analyzing 22 key indicators in 300 cities across the United States, including housing affordability, cost of living, property taxes, and crime rates, to compile a list of the best cities for first-time homebuyers.
Among them, Palm Bay in Florida was rated as the top city in the United States for first-time homebuyers to settle in; followed closely by Surprise and Gilbert in Arizona.
In contrast, many cities in California with long-term high housing prices ranked poorly; but that doesn’t mean homebuyers are completely out of luck, as regions like the Central Valley and the Inland Empire have kept a glimmer of hope for first-time buyers.
In the comprehensive rankings, the top ten cities are mainly concentrated in Florida and Arizona.
Palm Bay in Florida topped the list, citing reasons including ample housing supply, lower property crime rates, high home appreciation rates (up to 107% from 2018 to 2024), and the city having the fourth-highest millennial homeownership rate in the nation.
Following closely behind are the cities of Surprise and Gilbert in Arizona, which scored high in new housing supply, safety, housing affordability, and job market performance, with significant home price appreciation.
The top ten cities also include:
4) Tampa, Florida
5) Yuma, Arizona
6) Peoria, Arizona
7) Boise, Idaho
8) Chandler, Arizona
9) Orlando, Florida
10) Murfreesboro, Tennessee
According to the latest “WalletHub” rankings, California performed poorly in the ranking of cities for first-time buyers, with no California cities appearing in the top 50 list; conversely, California cities accounted for over 20% of the 50 least suitable cities for first-time buyers.
Furthermore, in some category rankings, the California housing market seems unfriendly to first-time buyers. For example,
1) The five most “unaffordable” cities in the U.S. are all in California, including Berkeley, Costa Mesa in Orange County, Glendale, Santa Monica, and Santa Barbara.
2) Eighty percent of the top five cities with the highest standard of living are in California, including Thousand Oaks, Santa Barbara, Santa Clara, and Sunnyvale in the Bay Area.
3) The five cities with the lowest Price-to-Rent Ratio in the U.S. are all located in California, including San Francisco, Sunnyvale, Santa Barbara, Berkeley, and Santa Monica. A low Price-to-Rent Ratio means that buying a home is far more costly than renting, resulting in lower returns on homeownership investments.
4) California claimed four out of the five most expensive cities in terms of overall household energy costs, including Sacramento, Elk Grove, Roseville in the suburbs of the capital, and Bakersfield in the Central Valley.
Data from the California Association of Realtors (C.A.R.) shows that the median home price in California reached $930,000 in May, hitting a historic high and nearly 50% higher than the national average.
When broken down by regions, the disparities are even more significant: the median home price in San Francisco reached $2.2 million in May, with San Mateo averaging $2.4 million; Orange County in Southern California near $1.5 million, and San Diego around $1.06 million.
Despite the high housing prices in California, the state remains popular and sought after. Furthermore, there is still some hope for first-time homebuyers, as “WalletHub” listed five cities relatively suitable for first-time homebuyers to settle, primarily located in inland regions, the Central Valley, and outer suburbs of Los Angeles.
According to the rankings, Roseville, located in the suburbs of California’s capital, ranked 53rd, with an average median home price of $685,000.
Clovis, ranked 73, is part of Fresno County, with an overall median home price of $435,000. Clovis also made the “Top 100 Most Livable Cities in America” list in 2024.
Lancaster, ranked 80th, is situated in the Antelope Valley, part of Los Angeles County. While the county’s overall median home price exceeds approximately $838,000, housing prices in Lancaster remain relatively affordable and stable compared to rent.
Moreover, in remote regions like Central Valley, extreme northern California, and even San Bernardino County, the housing prices are said to be the most affordable in the state, with many counties having median home prices below $500,000.
However, “WalletHub” analyst Chip Lupo emphasizes that for first-time homebuyers, the most ideal city should not only consider the cost of homeownership and ongoing expenses but also factor in adequate housing choices, low crime rates, and access to quality educational resources.
(This article is provided for general reference information only and does not constitute investment, tax, legal, real estate, or financial planning advice.)