Is homeownership out of reach for first-time buyers? Shoppers can be forgiven for thinking so as home prices continue to set records in the pandemic-fueled real estate boom.
One recourse for new homebuyers is moving to a cheaper housing market. Today, some metropolitan areas beckon with an enticing combination of affordable homes, a robust job market and superior public health, safety and cultural amenities.
“The housing boom of the past two years has widened the affordability gap between low-priced and high-priced metro areas,” says Bankrate.com analyst Jeff Ostrowski. “But with remote work becoming the norm for white-collar employees, it’s possible to keep the fatter paycheck while living in a cheaper area.”
Bankrate.com released a study on Monday that aimed to identify the best and worst metro areas for those making their initial foray into the housing market. Researchers ranked the 50 largest metro areas in the U.S. based on several factors first-time homebuyers should consider when buying a home, which they compiled using data from various sources, including the U.S. Census Bureau, the U.S. Labor Department and the FBI:
- Affordability (30% weighting): Typical income needed to qualify for a mortgage in each metro area, and homeownership rate for 25- to 44-year-olds in each metro area
- Employment (20%): Each metro’s March unemployment rate, and each metro’s average commute time
- Housing market tightness (20%): Realtor.com’s average days on market for homes for sale in March, and year-over-year inventory change through March 2022
- Safety (20%): FBI’s most recent data on rates of violent crime and property crime
- Wellness and culture (10%): Access to health care, food and community services; and number of arts and entertainment establishments and cultural institutions per capita
See the gallery for Bankrate.com’s 12 best metro areas for first-time homebuyers.