Small and Mid-Size Towns Prove to Be the Hottest Options for Buyers Starting Their Home Ownership Journey

SANTA CLARA, Calif., Jan. 11, 2024 /PRNewswire/ -- First-time homebuyers are optimistic when it comes to buying a home in 2024 with 61% indicating that now is a good time to buy, per a recent Realtor.com^® survey. And, when it comes to investing in their first home, they may find the best luck in some unexpected places. In its most recent report, Realtor.com^® unveiled the Best Markets for First-Time Homebuyers in 2024. This year's ranking includes Irondequoit, N.Y.; Benton, Ark.; Winterset, Iowa; Newington, Conn.; Council Bluffs, Iowa; Cheektowaga, N.Y.; Grand Rapids, Mich.; Moore, Okla.; Mattydale, N.Y. and Riviera Beach, Md.

"Buying a first home can be a daunting task. Couple high interest rates with historically low inventory of homes available for sale in 2023 and hopeful buyers have faced a particularly challenging market," said Danielle Hale, Chief Economist, Realtor.com^®. "While affordability will remain an issue in 2024, a recent Realtor.com^® survey showed that 95% of prospective first-time homebuyers overwhelmingly feel that they'll be able to afford a home within their lifetime, with 40% saying they'll be able to afford it within the next year."

The Realtor.com^® analysis of Best Markets for First-Time Homebuyers uncovers a collection of small to mid-size towns and cities that are hidden gems of opportunity where affordability meets healthy inventory, culture and liveliness, lower than average commute times, forecasted price growth, and good company of similar-aged peers.

Affordability - As one of the biggest purchases consumers will make in their lives, affordability is a major decision driver. In its analysis, Realtor.com^® looked at listing prices compared to gross household incomes of 25- to 34-year-olds in a city for the past 12 months to understand home affordability. A lower ratio indicates a more affordable place to live. The top markets in this year's list had an average 2023 listing price to income ratio of 3.1 compared to the national rate of 5.4. Additionally, homes in these towns/cities had an average median listing price that is 42% lower than the national median of $382,000. Within the top 10 list, Mattydale, N.Y., was the most affordable market relative to local incomes for 25-34-year-olds.

Investing in growth - Buying a home is not only a large investment up front, it's a commitment for the duration of ownership, which means investing in the ongoing upkeep and maintenance of the home. Naturally, first-time home buyers are looking for homes that fit everything they want, but also provide opportunities for their investment to grow. The top markets are located within metro areas that have an average forecasted 2024 home price growth rate of 6.1%, which is considerably higher than the national expected decline of -1.7%. Irondequoit, N.Y., is located in the metro area with the highest expected median sale price growth rate (10.4%).

Options to buy - At a time marked by chronically low inventory levels, the top markets had an average count of 40.2 active listings per 1,000 existing households in 2023, and one area in particular, Riviera Beach, Md., had the most active listings per household (59.3 per 1,000) across the list of top 10.

Things to do - It's not only about the house but what surrounds it, and first-time buyers are keen on finding areas that have plenty of things to do. The top places on this year's list have great options for restaurants, cafes, bars, shopping, and entertainment businesses such as theaters, comedy clubs, and arts classes per point of interest data provided by Yelp. As a group, the top cities and towns have 16.6 of these businesses per 1,000 households, slightly higher than the overall city/town average of 15.6. However, Cheektowaga, N.Y.; Grand Rapids, Mich.; and Newington, Conn. particularly shine, with a ratio higher than 19 per 1,000 households.

Shorter commutes - The time it takes getting to and from work is a major consideration for home buyers, especially as return to office becomes more prevalent. With an average expected 2024 commute time of 24 minutes for the top cities on this year's list, they clock in at less than the city/town average of 30 minutes and the national rate of 29 minutes - saving commuters about 50 hours per year for a 5-day commuter. Mattydale, N.Y., has the lowest average commute time to work, at 20 minutes.

Youthful towns - Along with having things to do, first-time buyers may want to be close to people in similar life stages and around the same ages. The share of homeowners between the ages of 25 and 34 in this year's top markets is 8.1%, well above the national average of 5.4%. Among the top 10 cities and towns, Riviera Beach, Md., is expected to have the largest share of young adult homeowners (10.9%), which may prove to be a hot spot for the next generation of first-time home buyers.

Complete details of the report can be found on Realtor.com^®, along with a First-Time Home Buyers Resource Center, multiple guides on mortgages and tools like a RealCost™ Buying Power Tool to help prospective buyers understand how much house they can afford.

Methodology
This year, the candidate list of places was filtered to only expose areas with an expected 2024 population of at least 5,000. The inventory of homes for sale and local median listing prices are from Realtor.com® December 2022 to November 2023 listing data and are reported at the city/place level. The cities and places are defined as postal codes mapped to Census Designated places and reflect approximate but not precise city or place boundaries. The population, household count, household income, and average commute time data were sourced from 2023 and 2024 Claritas estimates based on Census Bureau data. Population and household count numbers are at the city/place level but are also composed of mapped zip code data while household incomes and average commute times at the city/place level. The stated forecasted unemployment rates are Moody's Analytics projections of U.S. Bureau of Labor Statistics Local Area Unemployment Statistics for each city/place's surrounding metro area. Counts of culture and lifestyle businesses were aggregated from Yelp's November 2023 point of interest data and are aggregated at the city/place level. The 2024 sales and price forecasts are Realtor.com® projections for each city/place's surrounding metro area as detailed in our 2024 Housing Forecast and Top Housing Markets for 2024 reports. Additional data sourced from an October 2023 survey of 5,012 U.S. respondents aged 18+, conducted by Realtor.com^® and Censuswide, with data weighted to be nationally representative.

About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.

Media contact: press@realtor.com

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SOURCE Realtor.com