The number of first-time homebuyers made up 32% of all buyers in 2023, according to a report released by the National Association of Realtors. Millennials comprised 75% of this demographic, with older millennials and Generation X (ages 44 to 58) accounting for 44% and 24% of first-time buyers. Against that backdrop, Zillow identified prime markets for first-time homebuyers, and half of them were nestled in the Midwest.
Zillow’s ranking criteria include rent affordability, the proportion of listings within reach of an average household, the anticipated level of competition for these listings, and how many similar-age households live in the area.
“Affording a home is a tough hill to climb, and it’s especially steep for those buying their first home. Headwinds like mortgage rates, low inventory and rising rents are still strong, but easing,” Zillow Senior Economist Orphe Divounguy, said in a statement.
“Attractive homes are moving fast, so those looking to buy this spring should get their finances in order now, including getting pre-approved for a home loan. The increase in new listings this spring, due both to new construction and to more homeowners choosing to sell, will give buyers more options and help to ease price growth. The housing train is slowing down just enough to give more first-time buyers an opportunity to hop on board,” Divounguy said.
The top 10 markets for first-time homebuyers are Saint Louis, Detroit, Minneapolis, Indianapolis, Austin, Pittsburgh, San Antonio, Birmingham, Kansas City, and Baltimore.