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Best and Worst Cities For First Time Homebuyers

By Michael Stradford
Updated November 22, 2019
6 min read

According to the National Association of REALTORS, first-time buyer made up 33 % of all home buyers, a decrease from last year at 34 %. Purchasing a home is a big financial decision for homebuyers, especially those who might be going through the homebuying process for the first time. Often times first-time buyers are looking for that extra reassurance that they are making the right decision. Some first-time buyers use the FHA loan to purchase their first home because of their low credit and low down payment requirements. A recent Mortgage Research Center study identified the best and worst cities for first-time homebuyers.

In order to identify the best cities, Mortgage Research Center collected data from the 100 most populated cities in the United States and evaluated the strength of each city across 21 relevant variables of Affordability, Economic Wellness & Quality of Life.

Let’s take a closer look into our findings and a breakdown of the methodology of the best and worst cities for first-time homebuyers.

Top 10 Cities for First-time Homebuyers

Prospective home-buyers should certainly consider some of the cities that made it to the top of this list.

Top 10 First Time Home Buyers Map

#1 - El Paso, Texas

  • Population - 678,266
  • Median Home Price - $121,300
  • Unemployment Rate - 6.90%
  • Cost of Living (based on a US average of 100) - 87.2

El Paso was able to secure the top spot on this list. The mission statement for the city of El Paso is “Deliver exceptional services to support a high quality of life and place for our community.” El Paso also offers a wide variety of attractions to visit, such as the Digie 3D Wall, Downtown Art and Farmers Market, a zoo, and many other fun things.

#2 - Austin, Texas

  • Population - 916,906
  • Median Home Price - $285,900
  • Unemployment Rate - 4.40%
  • Cost of Living (based on a US average of 100) - 130

Austin secured the second spot on this list. Austin is the capital city of Texas and is known for its music, but the city also offers world-class museums and tons of beautiful outdoor spaces. Austin also has a creative community, with a lot of friendly people to make people feel at home.

#3 - Raleigh, North Carolina

  • Population - 449,477
  • Median Home Price - $225,000
  • Unemployment Rate - 5.00%
  • Cost of Living (based on a US average of 100) - 111

Raleigh is the capital of North Carolina, and is well known for its universities. Raleigh was able to secure the third spot on the list. The city will often times post upcoming events on its website to keep the public informed about upcoming festivals, sporting events, and many other fun things to do.

#4 - Scottsdale, Arizona

  • Population - 239,283
  • Median Home Price -
  • Unemployment Rate
  • Cost of Living (based on a US average of 100) - 148.7

Scottsdale is a desert city in Arizona east of state capital Phoenix. Scottsdale secured the fourth spot on the list. This city has tons of outdoor activities to enjoy. Some of these activities include hiking, floating on the Lower Salt River, riding some of the trails, and much more.

#5 - Virginia Beach, Virginia

  • Population - 450,057
  • Median Home Price - $267,300
  • Unemployment Rate - 5.30%
  • Cost of Living (based on a US average of 100) - 115.6

Virginia Beach is a vibrant coastal city of Virginia Beach that was able to secure the fifth spot on the list. Virginia Beach is home to a rich history and variety of arts and entertainment and family-friendly attraction.

#6 - Mesa, Arizona

  • Population - $52,155
  • Median Home Price - $187,900
  • Unemployment Rate - 6.00%
  • Cost of Living (based on a US average of 100) - 113.6

Mesa secured the sixth spot on our list. The city offer visitors access to the areas most popular natural attractions, including Superstition Mountains, Apache Trail, Salt and Verde Rivers, Usery Mountain Regional Park and area lakes.

#7 - Plano, Texas

  • Population - 281,566
  • Median Home Price - $271,300
  • Unemployment Rate - 4.20%
  • Cost of Living (based on a US average of 100) - 119.8

Plano is a city in north Texas that is known as the City of Excellence, so it's no surprise that the city was able to secure the seventh spot on the list. Plano offers city brims with attractions to enjoy, along with a nice art scene, and over 1,000 restaurants to chose from.

#8 - Chandler, Arizona

  • Population - 245,160
  • Median Home Price - $268,000
  • Unemployment Rate - 4.60%
  • Cost of Living (based on a US average of 100) - 123.2

Chandler embodies an active lifestyle with easy access to outdoor recreation with endless family-fun, award-winning events, world-class golf facilities, and a vibrant downtown.

#9 - Lexington-Fayette, Kentucky

  • Population - 315,109
  • Median Home Price - $193,500
  • Unemployment Rate - 6.10%
  • Cost of Living (based on a US average of 100) - 95

Lexington secured the ninth spot on our list. Lexington is seen as the horse capital of the world that is known for horse farms and thoroughbred racetracks like Keeneland. The city also offers street art, nightlife, food, shopping, architecture, history, craft beer, local coffee shops, music and friendly people.

#10 - Irving, Texas

  • Population - 235,648
  • Median Home Price - $155,200
  • Unemployment Rate - 5.00%
  • Cost of Living (based on a US average of 100) - 107.5

Irving was able to secure the tenth spot on the list. Irving is a city between Dallas and Fort Worth that offers convenient access to the DFW International Airport and the entire DFW Metroplex. Irving is known for it's live music, and bringing some of the biggest names to town. Irving was able to secure the final spot on our top ten list.

Best and Worst Cities for First-time Homebuyers in 2020

Overall Rank City Total Score
1 El Paso, TX 539.5
2 Austin, TX 566
3 Raleigh, NC 578
4 Gilbert, AZ 596
5 Scottsdale, AZ 600.5
6 Virginia Beach, VA 606
7 Mesa, AZ 612.5
8 Plano, TX 626
9 Chandler, AZ 626.5
10 Lexington-Fayette, KY 637.5
11 Irving, TX 656.5
12 Fort Worth, TX 658.5
13 Oklahoma City, OK 674
14 Tampa, FL 684.5
15 Fort Wayne, IN 685.5
16 Honolulu, HI 686.5
17 Colorado Springs, CO 693.5
18 Charlotte, NC 702
19 San Diego, CA 712.5
20 Phoenix, AZ 719
20 Aurora, CO 719
21 Omaha, NE 721
22 Chesapeake, VA 726.5
23 Denver, CO 733.5
24 Anaheim, CA (Tie) 734.5
24 Boise, ID (Tie) 734.5
25 Jacksonville, FL 737.5
26 Columbus, OH 741.5
27 San Antonio, TX 744.5
28 Louisiville, KY 745
29 Arlington, TX 749.5
30 Lincoln, NE 752
31 Irvine, CA 752.5
32 Madison, WI 766
33 Chula Vista, CA 772.5
34 Henderson, NV 773
35 Glendale, AZ 777
36 Hialeah, FL 777
37 Dallas, TX 784.5
38 Greensboro, NC 784.5
39 Santa Ana, CA 793.5
40 Laredo, TX 796.5
41 Winston-Salem, NC 804
42 San Jose, CA 806.5
43 St. Petersburg, FL 810
44 Philadelphia, PA 812.5
45 Corpus Christi, TX 819.5
46 Nashville-Davidson, TN 822
47 Lubbock, TX 832.5
48 Fremont, CA 833
49 Boston, MA 841
50 Durham, NC 847

Source: Mortgage Research Center

Note: Tie indicates that these cities scored the same average ranking.

Data Methodology

In order to determine the 2020 best and worst cities for first-time homebuyers, Mortgage Research Center analyst collected data from the 100 most populated cities in the United States and compared the following dimensions (Quality of Life, Economic Wellness, and Affordability).

We evaluated the strength of each city across those dimensions using 21 relevant variables, which are listed below with their corresponding weights. Metrics were gathered from a social media survey of Veterans and other similar studies.

Each city was then scored and ranked in each of the 21 variables by multiplying the city’s rank by that variable’s weight. The final rankings were determined by the city’s total score, with the lowest score representing the best city for first-time homebuyers to live.

Variables of Study

Affordability

  • Housing Affordability (Full Weight)
  • Annual Average Property Taxes for $250,000 Home (Double Weight)
  • Median Home Price per Square Foot (Full Weight)
  • Median Household Income Adjusted for Local Cost of Living (Double Weight)

Economic Wellness

  • Foreclosure Rate per 10,000 Homes (Half Weight)
  • Market Temperature (Double Weight)
  • Percentage of Homes that Lowered Home Price within 30 Days of Listing (Full Weight)
  • Average Number of Days on Market (Half Weight)
  • Average Real Estate Tax Rate (Half Weight)
  • Percentage of Monthly Income Spent on Monthly Mortgage Payment (Double Weight)
  • Unemployment Rate (Full Weight)
  • 5 Year Rate of Job Growth: 2013- 2018 (Full Weight)
  • Income Growth Since 2012 (Full Weight)

Quality of Life

  • Pupil-Teacher Ratio (Half Weight) - Note: This metric uses the Best Places (Education Stats) tool.
  • Number of Public Schools in "Top 700 Best US Schools" (Full Weight)
  • Life Expectancy (Half Weight)
  • Crime Index: Safer Than What Percent of US Cities? (Double Weight)
  • Property Crime Rate: Likelihood of Becoming a Victim per 1,000 Residents (Full Weight)
  • Violent Crime Rate: Likelihood of Becoming a Victim per 1,000 Residents (Full Weight)
  • Water Quality (Half Weight)
  • Air Quality (Half Weight)

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