Heavy competition in today’s expensive housing market has put some buyers off, especially in large metropolitan areas. According to the National Association of Realtors, these buyers usually make up about 40% of the market, but it is now less than a third. The majority are 25-34 year olds.
However, there is still hope for home ownership. Although the pandemic has fueled a strong demand for housing, it has also enabled more flexibility to accommodate people, benefiting the same first-time buyers.
Where is the best bet for them then in 2021? Not surprisingly, the Middle East.
Four of the top 10 best markets for first-time buyers, as determined by Realtor.com, are in the Middle East. Bloomington, Illinois, leads the list. Iowa City, Iowa, ranks second, followed by Kalamazoo, Michigan; Great Falls, Montana; Eau Claire, Wisconsin; Savannah, Georgia; Schenectady, New York; Taylorville, Utah; Harrisonburg, Virginia; and Rapid City, South Dakota.
All of the top markets have average house prices below the current national median of $ 370,000. Kalamazoo, Michigan, has the lowest average house price at $ 155,000, while Taylorsville, Utah, has the highest at $ 350,000.
But it’s not just about price and affordability. To determine the best cities, Realtor.com looked at house prices relative to local income, the share of 25- to 34-year-olds living in the market, the availability of homes to buy, jobs, distance to work, and amenities such as bars in restaurants. It also limited the rankings to one city per state.
“With 50% fewer homes this year than last year, the U.S. housing market is competitive for all buyers,” says Danielle Hale, chief economist at Realtor.com. “First-time buyers have a greater disadvantage, as they do not have the funds from a previous home sale to help with their repayment or to pray with the wars.”
In another survey by potential first-time buyers through Realtor.com, it was found that 44% of millennials said they did not have enough for a deposit. Part of that, however, may be that they are not aware of programs designed to help them.
“There are some great loan programs available just for first-time home buyers who repay less than 5% without mortgage insurance,” says Jennifer Myers, a real estate agent at Dwell, who often works with millennials and is one himself. “There are programs like this across the country and many first-time buyers qualify, but just do not know about these amazing ways to make their first home cheaper.”
However, if buying is out of the question, the best cities to find affordable, luxury rental apartments are mostly in the South, according to another study by RENTCafe, an apartment listing website. Georgia, specifically the Atlanta area, topped the top spots. Cities in Alabama and South Carolina follow on the list.