Home prices remain high and low inventories of houses for sale have many metro real estate markets stuck in low gear. What are first-time home buyers — who are making 45% of today’s purchases — to do?
Zillow’s winter 2022/spring 2023 ranking of best cities for first-time homebuyers has a suggestion: Consider cities — most of them small- to midsized — where:
- Home listings are available.
- Competition is less ferocious.
- Lower-priced homes can be found.
- Sellers are more open to dropping their prices.
Zillow’s senior economist, Orphe Divounguy says of the report:
“These metros are potential hotbeds for those looking to buy their first home. 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.”
Read on for Zillow’s top-ranked metro markets for first-time homebuyers.
10. Little Rock, Arkansas
- Inventory to buyer ratio: 6 to 1
- Listings with price reductions: 20%
Little Rock, a city of about 200,000 residents, has more than 63 parks plus other recreational facilities, a plus for workers and families moving to town.
Where to shop for a home? Movoto.com likes Midtown, a neighborhood with its own dining and retail community, just 10 minutes from central downtown. If you prefer suburbs, Movoto has other recommendations including Maumelle and Cabot.
9. St. Louis, Missouri
- Inventory to buyer ratio: 4 to 1
- Listings with price reductions: 25%
St. Louis, home to approximately 300,000, was known as the “Gateway” to the American West during the nation’s westward expansion in the 1800s.
It has been the hometown of many famous Americans, including entertainer Josephine Baker, poet T.S. Eliot and baseball great Stan Musial, who moved to the city in 1941 to join the St. Louis Cardinals and stayed. Chuck Berry, Nelly, Jackie Joyner-Kersee, Jon Hamm and Tina Turner are a few other famous people from St. Louis.
8. Pittsburgh, Pennsylvania
- Inventory to buyer ratio: 6 to 1
- Listings with price reductions: 28%
Pittsburgh, whose population just grazes 300,000, is ranked by U.S. News & World Report as the 26th best place to live in a review of 150 metros.
U.S. News also named Steel City (Pittsburgh once was a steel manufacturing center) as the sixth most affordable metro in the U.S. for 2022-2023.
Why the buzz? Pittsburgh’s got history, thousands of acres of city parks, a tech hub, several universities (including the University of Pittsburgh and Carnegie Mellon and Duquesne universities) and a famously strong community.
7. Detroit, Michigan
- Inventory to buyer ratio: 6 to 1
- Listings with price reductions: 28%
Detroit, population 632,000, is the largest city on Zillow’s list.
The city is gaining a reputation for its urban agriculture, even though gardens and farms still occupy just 1% of the city’s land, says this recent University of Michigan study. Here are six of Detroit’s urban farms that are open to the public.
6. Tulsa, Oklahoma
- Inventory to buyer ratio: 7 to 1
- Listings with price reductions: 24%
“T-Town,” population 400,000-plus, “has developed into a vibrant (albeit small), modern metro area,” says U.S. News.
The magazine ranks Tulsa No. 82 of 150 cities on its list of the best places to live in the U.S. and 18th among the cheapest places to live. Unfortunately, Tulsa also holds the No. 8 spot on U.S. News’ list of most dangerous places.
5. Cleveland, Ohio
- Inventory to buyer ratio: 6 to 1
- Listings with price reductions: 27%
Cleveland Daily, a local news and sports blog, lists pros and cons of living in Cleveland, population 368,000. Among 20 pros: great restaurants and bars, loyal sports fans, good health care and Cleveland’s Rock and Roll Hall of Fame.
Drawbacks to moving to this city on the shore of Lake Erie include somewhat higher unemployment (4.8% in October versus 3.7% nationally in November).
A more substantial drawback is the city’s very high level of poverty. Some 35% of Cleveland residents — and 49% of children — were living in poverty in 2019, according to Northeast Ohio Coalition for the Homeless, citing U.S. Census data.
4. Akron, Ohio
- Inventory to buyer ratio: 5 to 1
- Listings with price reductions: 29%
Akron, with a population of just under 200,000, is located between Cleveland to the north and Pittsburgh to the southeast.
U.S. News doesn’t include Akron in its rankings, but Realtor Alex Kolesar, who sells homes in Cleveland and Akron, blogged about pros and cons of living in Akron.
On the plus side, housing is affordable, there’s lots to do — including concerts, a zoo and museums — and the city is rebuilding its downtown after the former manufacturing town lived through a long slump familiar to “rustbelt” cities.
Cons include traffic, parking and construction logjams downtown, and, as with Tulsa, crime is a serious deterrent in some (not all) neighborhoods, Kolesar writes. You’ll find passionate Akronites discussing its pros and cons at Niche.com.
3. Syracuse, New York
- Inventory to buyer ratio: 4 to 1
- Listings with price reductions: 19%
Syracuse.com trumpets its inclusion in Zillow’s list, noting that its affordability is unusual for a New York metro area. Syracuse, a town of 146,000, in fact, is hundreds of miles north of the nation’s biggest city, located near Lake Ontario in the state’s northwest.
A big attraction here is Syracuse University, a private university founded in 1870.
2. Toledo, Ohio
- Inventory to buyer ratio: 5 to 1
- Listings with price reductions: 23%
Are you noticing a trend? Toledo is yet another Ohio city to make Zillow’s list. It has nearly 269,000 residents and is located south of Detroit.
Destination Toledo, published by the city’s Convention and Visitors Bureau, offers a look at the city and neighborhoods. Look for “Explore the region” in the webpage menu.
1. Wichita, Kansas
- Inventory to buyer ratio: 22 to 1
- Listings with price reductions: 22%
Wichita, like many cities, offers a down payment assistance program for first-time homebuyers with low- to moderate incomes as defined by the program.
Almost 400,000 people live in Wichita, according to the U.S. Census Bureau. The city is known as the “Air Capital of the World” for its aircraft manufacturing industry, the birthplace of Cessna, Learjet and other aviation companies. It was also home of the Pizza Hut and White Castle fast food chains.