Strong competition in today’s expensive housing market has eliminated some first-time buyers, especially in large metropolitan areas.
These buyers usually account for about 40% of the market, but are now less than a third, according to the National Association of Realtors. Most are millennials between the ages of 25 and 34.
However, there is still hope for home ownership. Although the pandemic has stimulated strong demand for housing, it has also allowed for greater flexibility in where people can live, benefiting the same first-time buyers.
So where are the best bets for them in 2021? Not surprisingly, Midwest.
Four of the top 10 best markets for first-time buyers, as determined by realtor.com, are in the Midwest. Bloomington, Illinois, leads list. Iowa City, Iowa, 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. Some sources consider South Dakota to be a Midwestern state.
All top markets have average housing prices below the current national average of $ 370,000. Kalamazoo has the lowest average house price, at $ 155,000, while Taylorsville has the highest price, at $ 350,000.
But it’s not just about price and affordability. To determine the best cities, realtor.com analyzed home prices relative to local incomes, the share of young people aged 25 to 34 living on the market, the availability of houses for sale, employment opportunities, working distance and facilities such as bars. and restaurants. It also limited rankings to one city per state.
“With 50 percent fewer homes this year than last year, the U.S. real estate market is competitive for all buyers,” said Danielle Hale, chief economist at realtor.com. “First-time buyers are at a greater disadvantage because they do not have the funds from a previous sale of houses to help pay for them or to compete with the bidding wars.”
Another survey conducted by realtor.com on potential buyers for the first time found that 44% of millennials said they did not have enough for an advance. Part of this, 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 that allow you to get up to 5% off without mortgage insurance,” said Jennifer Myers, a real estate agent at Dwell who often works with Millennials and is herself. “There are programs like this across the country and many first-time buyers are qualifying, but they just don’t know about these wonderful ways to make their first home more affordable.”
However, if buying is excluded, the best cities where you can find affordable apartments are mostly in the south, according to another study by RENTCafe, an apartment listing site. Georgia, especially the Atlanta area, took first place. The cities of Alabama and South Carolina followed on the list.