St. Louis is cited as a leading destination for Americans looking for their first home.
Missouri City is the best market for first-time buyers this year.Heirs will have more money to spend and affordable housing will be more widely available.
Of the top 10 markets named in New analytics from home sales sites Half of Zillow is located in the Midwest, including Detroit, Minneapolis, Indianapolis and Kansas City.
First-time homebuyers accounted for half of all homebuyers last year, the highest share since at least 2017, according to Zillow.
Last year’s high mortgage rates meant that many homeowners were motivated to stay put due to current low mortgage rates, and some considering repeat purchases. People were on the sidelines.
St. Louis is cited as a leading destination for Americans looking for their first home
Along with Midwestern cities, Austin, Pittsburgh, San Antonio, Birmingham, and Baltimore also made the list of best markets for those looking to get on the real estate ladder.
Zillow determines the best market for first-time buyers based on factors such as the affordability of rent, the share of homes for sale that average families can reasonably afford, the expected intensity of competition for affordable properties, and the number of households of the same age group. Ranked based on. area.
The study looked at rental affordability as a way to determine how easy it is for prospective buyers to save for a down payment.
Unlike other similar studies, Zillow did not look at average salaries in a given market as a basis for affordability in that area.
The top two markets in Zillow’s rankings, St. Louis and Detroit, scored highly on affordability, both in terms of rent and number of affordable homes.
Austin, on the other hand, is not the most affordable market on the list, but it ranks No. 1 for the number of same-age households living there, allowing buyers to build a community.
Home prices in Austin soared during the pandemic as the city’s sunny climate, expansive state parks and relatively affordable prices attracted buyers.
The Texas city has long been considered the epitome of the Sunbelt’s hot housing market, but home prices are currently on the decline.
Detroit ranks No. 2 on Zillow’s list, performing well in terms of affordable rental housing and the range of affordable homes available for sale.
Minneapolis ranked No. 3 in Zillow’s analysis of the best markets for first-time buyers this year.
“Buying a home is a difficult mountain to climb, especially for first-time homebuyers,” said Orpheus Divongay, senior economist at Zillow.
“Headwinds such as mortgage rates, inventory shortages, and rising rents remain strong but are easing.
“Buying a home is a difficult mountain to climb, especially for first-time homebuyers,” said Orpheus Divongay, senior economist at Zillow.
“An increase in new construction this spring and more homeowners choosing to sell will give buyers more options and help ease price increases.”
“Residential trains are slowing down enough to give more first-time buyers a chance to ride,” he added.
First-time buyers need to be aware of financial hurdles, such as how their credit score affects loan options and costs and how much they need to save for a down payment.
Typical down payments tend to be 20%, but Zillow points out that people who don’t have enough savings shouldn’t think this will ruin their first home purchase.
Separate analysis from the real estate market shows that almost half of buyers last year paid less than 20% of their purchase price.
Home sales and inventory increased in February, but high mortgage rates and real estate prices mean many Americans still face affordability challenges, according to the National Association of Realtors. .
The average interest rate on a 30-year fixed mortgage is hovering around 6.82%, according to the latest data from government-backed lender Freddie Mac.
Last year, the housing market gained a whopping $2 trillion in value amid a historic shortage of homes for sale.
And according to Redfin, the housing market has increased by $5.6 trillion over the past two years, forcing many Americans to exit the market.
