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February 28, 2023 at 12:06 PM
Related: 15 Safest Cities in America: 2023
Home prices in the U.S. have stayed near all-time highs even as the pandemic-fueled demand for real estate ebbs, Bankrate.com noted in a report released Monday. Homeowners have enjoyed the windfall, while prospective buyers entering the market for the first time struggle to achieve ownership.
“The pandemic-driven housing boom sent home values soaring, and it intensified the affordability gap between low-priced and high-priced metro areas,” Bankrate.com analyst Jeff Ostrowski said in a statement. “But now that virtual workplaces are standard for white-collar employees, it’s possible to take your big-city income to a less expensive part of the country.”
Indeed, moving to a more favorable market is one way frustrated first-time homebuyers can solve the affordability conundrum, according to Bankrate. But price is only one factor. Before they put down roots, homebuyers will also want to consider the local job market as well as wellness and cultural amenities.
To find the best cities for first-time homebuyers, Bankrate.com ranked the 50 largest metro areas in the U.S. across four main factors, drawing data from various sources.
Researchers gave a 40% rating to affordability, which includes income needed by 25- to 40-year-olds to qualify for a mortgage in each area and the Cost of Living Index in that area as of the 2022 second quarter.
They gave 30% weighting to each area’s job market ranking: the unemployment rate as of August reported by the U.S. Department of Labor and the year-over-year change in employed residents. This factor also includes each area’s commute time per 2021 Census data.
Housing market tightness, which accorded a 15% weighting, is based on Realtor.com’s median days on the market statistic for homes for sale in December and the year-over-year change in housing inventory through December.
Finally, researchers gave 15% weight to wellness and culture, which includes measures of each metro area’s access to health care, food and community services; racial diversity and representation; and a culture ranking based on the number of arts, entertainment and recreation establishments per capita.
See the gallery for the 12 best metro areas for buyers making their initial foray into the housing market, according to Bankrate.
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