The Best—And Worst—U.S. Cities for First-Time Home Buyers, Ranked

It can be daunting to save up enough money for a down payment on your first home, especially if you live in a city with high housing costs. You have to factor in how much you want to spend, how much you're willing to fix up, how far you want to commute to work, and many other factors.

But there are cities where it's easier for first-time buyers to get the house they want based on market factors like affordability, cost of living, and tax rates. There are also cities where it's a real struggle for a first-time buyer to break into the market. Adding to the difficulty is that only 21% of the market is first-time buyers, compared to a historical average of 40%. It's just more proof that market pressures and other issues are keeping first-time buyers away.

So which markets should first-time buyers check out, and which one do they need to worry about? Check out real estate market data from WalletHub to prepare for your new home purchase.

Warm Cities Are Good Spots for First-Time Buyers

First-time buyers may be thankful that some of the best cities to find a house are in warm locations.

Palm Bay, Florida, leads the list among places for first-time buyers to try. The city's active home listings per capita and new building permits per capita make it a good spot for shoppers looking for a place to live. The city is also home to a growing millennial population and the fourth-highest home appreciation rate in the country.

Second place may not be a surprise for residents of Surprise, Arizona, which benefits from a high number of home building permits per capita to keep up with housing demand. It can also be a good place to invest in real estate with home prices appreciating 93% from 2018 to 2024.

Gilbert, which is also in Arizona, came in third place. It also benefited from an increase in new building permits as well as low tax rates.

Of the top 10 best places for first-time buyers to get a home, only two cities weren’t in Florida or Arizona. The top 10 included:

1. Palm Bay, Florida
2. Surprise, Arizona
3. Gilbert, Arizona
4. Tampa, Florida
5. Yuma, Arizona
6. Peoria, Arizona
7. Boise, Idaho
8. Chandler, Arizona
9. Orlando, Florida
10. Murfreesboro, Tennessee

West Coast Homes Aren’t Affordable

First-time homebuyers are going to find it tough to buy an affordable house on the West Coast, especially if they're looking in California. All but one city in the top 10 least affordable cities for first-time buyers is in the Golden State.

Berkeley, California, tops the list while nearby cities Oakland, San Francisco, and San Mateo also made the top 10 least-affordable cities.

Second-place Santa Monica ranked 300 out of 300 cities for affordability in WalletHub's survey. The city was joined by nearby Los Angeles, Costa Mesa, and Glendale for hard-to-afford cities for first-time buyers.

Red flag topics for first-time buyers in these areas include a lack of affordable housing and energy costs. Anchorage, Alaska, was the only non-California city to make WalletHub's list of worst cities for first-time buyers, dragged down by the city's quality of life. Alaska’s northernmost major city ranked the lowest for quality of life among all cities surveyed.

The top 10 least affordable cities for first-time buyers include:

1. Berkeley, California
2. Santa Monica, California
3. Santa Barbara, California
4. Oakland, California
5. Anchorage, Alaska
6. San Francisco, California
7. Costa Mesa, California
8. Los Angeles, California
9. San Mateo, California
10. Glendale, California

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