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 6 in 10 of them are Millennials.
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. It’s 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. Even with this change, there still are not enough homes for sale to meet buyer demand, and the market remains competitive.
“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’s 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.”
First-time buyers are naturally disadvantaged compared with 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.
Younger buyers are more likely to go over their budgets to nab their first home. But those buying in the top markets in Zillow’s First-Time Buyers Analysis should have a better chance of staying within budget to buy a home they love, as market trends show they are more likely to require smaller down payments and to have had prices cut.
Ten Best Markets for First-Time Homebuyers
1. Tampa, FL
2. Las Vegas, NV
3. Phoenix, AZ
4. Atlanta, GA
5. Orlando, FL
6. Miami, FL
7. Detroit, MI
8. Dallas, TX
9. Nashville, TN
10. Charlotte, NC
Ten Most Challenging Markets for First-Time Homebuyers
1. San Francisco, CA
2. Seattle, WA
3. Washington, D.C.
4. Los Angeles, CA
5. Sacramento, CA
6. Minneapolis, MN
7. Denver, CO
8. San Diego, CA
9. San Jose, CA
10. Boston, MA
Zillow’s list of the best markets for first-time buyers is based on four metrics
- Low median home value that requires a smaller down payment
- Strong forecasted home value appreciation, helping buyers’ overall wealth grow
- High inventory-to-household ratio, to indicate available supply
- High share of listings with a price cut
Source From: http://www.worldpropertyjournal.com