The 5 best cities in America for first-time home buyers right now — and the five worst
Even with a housing market favorable to buyers, some cities still aren't great picks for people buying their first house
If you haven't heard, the housing market is in a weird place right now.
Post-pandemic, it seemed unstoppable with two years of price increases. Now, it's finally showing signs of fatigue.
Home prices are starting to fall, unsold inventory is piling up to levels not seen since the 2008 financial crisis, and buyers are walking away from deals or demanding steep discounts.
Still, not all markets are great for first-time home buyers, who comprised a historic low in 2024 of 24% of all market purchasers.
WalletHub looked at data to find the best and worst cities right now for first-time homebuyers. It looked at a series of metrics across three categories: affordability, the market, and quality of life. It considered obvious factors like average cost per square foot and price of home insurance, and more out-of-the-box ones like building-permit activity, mortgage lenders per capita, and the total home-energy cost.
“Buying a home for the first time is a very stressful and difficult process, especially when housing prices are through the roof and interest rates have risen sharply in the past few years," said WalletHub analyst Chip Lupo. "The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward, but they also have a lot of housing choices as well as low crime rates and good schools."
Continue reading to see which cities were ranked the best — and the worst.
—Jackie Snow contributed to this article.
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5th best: Huntsville, Alabama
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Huntsville had strong scores across the board for affordability, its real-estate market, and quality of life, landing it the fifth spot.
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4th best: Surprise, Arizona
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While Surprise had a high quality of life score, it ranked first for its real-estate market and 21st for affordability, securing fourth.
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3rd best: Tampa, Florida
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Tampa ranked 170th for affordability, in part because of the high cost of home insurance in coastal Flordia, but it stood out for a large number of listings and new building permits, and ranked high for quality of life. It came in third place.
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2nd best: Boise, Idaho
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Boise came in second, "boasting a high number of new building permits per capita and the seventh-lowest foreclosure rates in our study," WalletHub said. It added that "Boise is a good place to live because it has a relatively low crime rate," and it has the country's highest home price appreciation rate.
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Best: Palm Bay, Florida
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Palm Bay, on Florida's east coast, came in first. "It’s among the leading cities in the country when it comes to active home listings per capita and new building permits per capita, so there are plenty of older and brand-new homes to choose from," WalletHub said. "In addition, while it’s a stereotype that millennials struggle to buy homes, Palm Bay has the fifth-highest millennial home-ownership rate."
As an added plus, while home values are going down in some Florida cities, houses in Palm Bay were up 108% in value in 2023 from 2017.
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5th worst: Santa Barbara, California
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Santa Barbara ranked fifth worst thanks to sky-high home prices and competitive real estate market.
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4th worst: San Francisco, California
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San Francisco is known to be super expensive, so it's no surprise it found itself ranked as the fourth worst. It also got low scores for quality of life for first-time homebuyers.
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3rd worst: Oakland, California
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Just across the bay, Oakland also found itself in the bottom, ranked third-worst, with high costs that don't make up for quality of life.
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2nd worst: Santa Monica, California
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Another California city, Santa Monica, ranked second — coming in dead last for affordability.
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Worst: Berkeley, California
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Berkley came in last with low scores across all categories, thanks to expensive homes, a super competitive real estate market, and even a low quality of life score for first-time homebuyers.