Strong competition in today’s expensive housing market has put a margin on some of the first buyers, especially in major metropolitan areas.
These buyers typically make up about 40% of the market, but are now less than a third, according to the National Real Estate Association. Most are millennials between the ages of 25 and 34.
Still, there is still hope for home ownership. Although the pandemic spurred strong demand for housing, it 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, it is the Midwest.
Four of the top 10 markets for first-time buyers, as determined by realtor.com, are located in the Midwest. Bloomington, Illinois, leads the list. Iowa City, Iowa, took second place, 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 leading markets have average house prices below current national media of $ 370,000. Kalamazoo has the lowest average house price of $ 155,000, while Taylorsville has the highest of $ 350,000.
But it’s not just about price and affordability. To determine the best cities, realtor.com studied house prices relative to local income, the share of children aged 25 to 34 living in the market, the availability of homes for sale, employment opportunities, distance to work and benefits such as bars and restaurants . He also limited the ranking to one city per country.
“With 50% fewer homes on the market this year than last year, the U.S. housing market is competitive for all buyers,” said Danielle Hale, chief economist at realtor.com. “For the first time, buyers are at a greater disadvantage because they do not have the funds from the previous sale of houses to help them with an advance or to compete in wars of competition.”
Another survey of potential buyers for the first time conducted by realtor.com showed that 44% of millennials said that it was not enough for them to deposit. However, part of that may be that they are not aware of programs designed to help them.
“There are several excellent loan programs available only to home buyers for the first time that allow for a drop of just 5% without mortgage insurance,” said Jennifer Myers, a real estate agent in Dwell who often works with millennials and is herself. “Programs like this exist all over the country and many first-time buyers qualify, but they just don’t know about these great ways to make their first home more affordable.”
However, if shopping is out of the question, the best cities where affordable, luxury rental apartments can be found are mostly in the south, according to another study by RENTCafe, a website listing apartments. Georgia, a special area of Atlanta, took first place. Cities in Alabama and South Carolina followed the list.