SEATTLE, March 7, 2018 /PRNewswire/ -- First-time buyers
looking for an affordable home without much competition will have
the best luck in Tampa, Florida,
according to Zillow®'s 2018 Best Markets for First-Time Buyers
Analysis.
Zillow ranked the 35 largest U.S. housing markets based on where
first-time buyers have the best chance to find an affordable home
with little buyer competition and strong forecasted home value
appreciation. First-time buyers make up 42 percent of all buyers,
according to the 2017 Zillow Group Report on Consumer Housing
Trendsi.
The U.S. housing market is competitive for all buyers, as there
are not enough homes for sale to meet today's strong buyer demand.
In January, inventory of the least expensive homes was down 17.1
percent annually, compared to a 9.7 percent decrease for all homes.
In 2017, nearly a quarter of home sales were above the listed
priceii. This puts first-time buyers at a disadvantage
this home shopping season because they won't have the capital from
a previous home sale to help fund a down payment or keep up with
bidding wars. Saving up for a down payment is the most commonly
cited barrier to homeownershipiii.
New buyers will have it easiest in the Southeast, especially
Texas and Florida. Five of the top 10 markets for
first-time buyers are in those two states. Homes in those markets
require a smaller down payment, and buyers are more likely to
encounter price cuts.
First-time buyers are likely to face the most difficulty in
pricy West Coast markets, especially California metros. Not only are homes
expensive, but inventory is especially limited, and it takes longer
to break even on a home purchase.
Ten Best Markets for First-Time Homebuyers
- Tampa, FL
- Indianapolis, IN
- Houston, TX
- Orlando, FL
- San Antonio, TX
- Saint Louis, MO
- Philadelphia, PA
- Atlanta, GA
- Las Vegas, NV
- Dallas, TX
"More and more millennials are reaching the point in their lives
where they are ready to buy a home, but they are entering a highly
competitive housing market that has been plagued by low inventory,
especially among entry-level homes," said Zillow Senior Economist
Aaron Terrazas. "Southeastern
markets will be easiest for new buyers, where homes are more
affordable and there's less competition. People planning to buy for
the first time in some of the tougher markets should be prepared to
face a more competitive environment, but that doesn't mean they
should count out buying entirely."
Zillow's list of the best markets for first-time buyers is based
on five metrics:
- Low median home value that requires a smaller down payment
- Strong forecasted home value appreciation
- High inventory-to-household ratio, to indicate available
supply
- Short Breakeven Horizon, which is the time it takes for buying
to be financially advantageous compared to renting
- High share of listings with a price cut
To help first-time buyers better understand all the costs
associated with homeownership, RealEstate.com, a Zillow Group
brand, calculates an "All-In Monthly Price" for every home and
breaks out estimated expenses that might roll up into a monthly
payment, including principal and interest, property taxes,
homeowner's insurance, HOA fees and utilities, and closing
costs.
Zillow
Zillow is the leading real estate and rental
marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Launched in 2006, Zillow is owned and operated by Zillow
Group, Inc. (NASDAQ:Z and ZG), and headquartered in Seattle.
Zillow is a registered trademark of Zillow, Inc.
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i
https://www.zillow.com/report/2017/buyers/typical-american-buyer/
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ii https://www.zillow.com/research/home-sales-above-list-price-17875/
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iii https://www.zillow.com/research/down-payment-hurdle-zhar-14790/
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SOURCE Zillow