The 20 Best Cities for First-Time Homebuyers

Times are tough for first-time homebuyers. They’re facing skyrocketing prices and rising interest rates, and they don’t have equity to make competitive offers in a fast-and-furious buying market. The median price of a home in the U.S. jumped to$391,200 in April, according to the National Association of Realtors, which crunched the data and found that a first-time home purchase wasunaffordable for most in the first quarter of 2022, with starter homes at $313,000 and a typical mortgage payment of $1,363 a month — 30% higher than a year ago. Fortunately, some markets across the country have friendlier conditions for first-time buyers.

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Lending Tree ranked 50 of the country’s metro areas according to how friendly they are to first-time homebuyers, looking at factors such as the average down payment amount (the lower the amount, the easier it is to afford a residence), and average down payment percentage, which usually tops 20%. They also considered the share of buyers using a Federal Housing Administration loan, the percentage of buyers who have credit scores below 680, and the share of homeowners who spend 30% or more of their monthly income on housing costs — a bar financial experts don’t recommend exceeding.

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Average Down Payment Amount: $30,219

Average Down Payment Percentage: 10.1%

This city of 490,000 is fast shedding its grittier, agricultural past as it attracts new business and industries, including telecommunications, publishing, and car manufacturing. Kansas City also offers a variety ofgrants and incentives for first-time homebuyers.

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Average Down Payment Amount: $46,375

Average Down Payment Percentage: 10.7%

Gen Zers (people born between 1997 and 2012) are escaping coastal cities for land-locked ones, including Oklahoma City, where that age group now makes between15.3% and 16.6% of mortgage offers. Why not? It’s called “The Big Friendly” and has a low cost of living.

Average Down Payment Amount:$46,375

Average Down Payment Percentage: 13% 

Even if this city’s 618,000 locals balk at rising home values — averaging $228,177 in April, according to Zillow — prices here are growing less quickly than in other parts of the country. For job seekers, Louisville is home to iconic brands such as KFC, Maker’s Mark, and Louisville Slugger.

Average Down Payment Amount: $48,377

Average Down Payment Percentage: 13.3% 

The 300,000 residents of St. Louis take great pride in their city — and an affordable cost of living is just one item on their lists. The median home price is just $172,638, according to Zillow. It’s also known for free activities such as ample city parks; short commutes; and great sports teams, including the 11-time World Series-winning St. Louis Cardinals. Aviation, biotech, and financial services are among the metro's main industries.

Average Down Payment Amount: $43,365

Average Down Payment Percentage: 10.4%

Salt Lake City is an example of how homebuying can get complicated. Even with median home values climbing 25% in the past year to more than $625,000, Lending Tree says the city offers a relatively attractive atmosphere to first-timers with a low average down payment percentage. The city of 200,000 residents offers easy access to the outdoors, ample job opportunities, and a vibrant downtown.

Average Down Payment Amount:$49,933

Average Down Payment Percentage:14.4%

First-time homebuyers in Memphis may have attractive conditions, but they’re competing with real estate investors for affordable properties. The city of 650,000 on the Mississippi is known for its rich musical tradition. Legendary artists such as Elvis, B.B. King, and Otis Redding have played here, giving the city flavor alongside an economy based in shipping and transportation.

Average Down Payment Amount:$44,680

Average Down Payment Percentage: $13.1% 

There’s lots to love for first-time homebuyers in Cleveland, including a cost of living below the national average. The 383,000 residents may soon have an advantage in the housing market as a bill moves forward to place their offers ahead of out-of-state investors. Health care, banking, and insurance rank as the top industries here, and the area is known for its proud sports fans. It’s also the home to cultural institutions such as the Rock & Roll Hall of Fame.

Average Down Payment Amount:$45,685

Average Down Payment Percentage:15.2%

Home prices in Birmingham are trending up, though less steeply than elsewhere in the country. Health care, manufacturing, and tourism anchor industries in this city, where the 211,000 residents enjoy an affordable cost of living.

Average Down Payment Amount:$45,732

Average Down Payment Percentage:12.8%

Virginia is projected to see a slowdown in home construction, and first-time homebuyers face fierce competition from investors as well as rising interest rates. Yet this capital city on the James still earns a place on the Lending Tree list. It’s known for its finance and medical industries, and is enjoying a downtown revitalization.

Average Down Payment Amount: $51,784

Average Down Payment Percentage: 12.8%

This business headquarters of the Southeast is known for finance and health care. Millennials make up around a quarter of its half-million residents and are reshaping the city. When they aren’t at work, Atlanta dwellers love great food and getting outside on the 22-mile loop of multi-use trails, modern streetcar, and parks known as the BeltLine.

Average Down Payment Amount: $55,664

Average Down Payment Percentage: 12.6%

It’s all relative when it comes to housing prices. Although Baltimore’s are high, they’re lower than those in nearby Washington, D.C., where residents are trading their metro homes to turn this city into a suburb. That trend is placing pressures on middle-class homebuyers, but if they can get in the door, lower down payments will land them amid diverse neighborhoods and entertainment options.

Average Down Payment Amount:$52,216

Average Down Payment Percentage:13.1%

Las Vegas is among a handful of Western cities seeing slashed home prices, which opens the door to first-time homebuyers. Gambling is king in this city of 645,000.

Average Down Payment Amount:$43,491

Average Down Payment Percentage: 13.8%

Michigan’s soaring home prices are expected to begin falling next year and pave the way for more first-time homebuyers. The manufacturing, finance, and information technology hub is usually known for a relatively low cost of living.

Average Down Payment Amount: $44,878

Average Down Payment Percentage:15%

With booming arts and tech industries, the capital of Ohio is an attractive city for new homeowners. The city of nearly 890,000 people is home to the Ohio State University.

Average Down Payment Amount:$47,220

Average Down Payment Percentage: 12.6%

Part of the Research Triangle with Durham and Cary, Raleigh is known for information, education, and government services jobs. A new Apple campus is headed its way. Mortgage ratesmake homebuying in this area expensive, but first-timers will make good investments if they can land a home.  

Average Down Payment Amount:$53,864

Average Down Payment Percentage: 12.4%

New homeowners find themselves up against less competition in the Rose City, where industries such as health care keep the local economy strong. Access to the outdoors, such as in Washington Park and the Portland Japanese Garden, make this verdant coastal city a perennial favorite.

Average Down Payment Amount: $52,418

Average Down Payment Percentage:14.3%

Although Jacksonville’s housing market has been called overpriced, it has fared better than other Florida cities. The most populous city in Florida, with more than 900,000 residents, Jacksonville is known for its relatively affordable cost of living.

Average Down Payment Amount: $59,906

Average Down Payment Percentage: 12.3

Rhode Island’s capital city gives a helping hand to potential first-generation homeowners in the form of $25,000 grants. Although it has roots in shipbuilding, the coastal city has become a center for biomedicine, cyber and data analytics, and advanced business services.

Average Down Payment Amount: $56,377

Average Down Payment Percentage:15.5%

Indianapolis has become a starter-home hub. Drug giant Eli Lilly has headquarters in the city of 869,000, which has experienced a dramatic rebirth in recent years.

Average Down Payment Amount: $54,961

Average Down Payment Percentage: 14.8%

Homes in Virginia Beach go on the market at an average $349,000 — slightly below the national average. That makes an attractive environment for some first-time buyers. The beach-side city of 450,000 residents is known for its easy-going way of life along the boardwalk.

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