2023’s top housing markets for first-time home buyers

January 30, 2023 - 3 min read

What are first-time home buyers looking for?

The last few years put first-time home buyers on a difficult road to homeownership.

Between unprecedented price growth, fervid competition and tight for-sale inventory, it’s been tough sledding. Though 2023 is a new year and with it comes improved opportunities for buyers, including being able to add contract contingencies again. While the overall market is cooling, some places offer this faction of borrowers a better mix of what they’re looking for, according to a report from Realtor.com.

Each city in the top 10 contains a combination of affordability, jobs, and livability that first-time buyers typically desire.

The forecasted best cities for 2023 first-time home buyers

While being a first-time home buyer comes with no age restriction, these borrowers tend to fall somewhere in their mid-20s to mid-30s. Noncoincidentally, that age bracket commonly correlates with the life milestones of marriage and starting a family.

Overall, this group gravitates towards reasonably priced properties, living among a higher percentage of peers, and surrounding comforts and conveniences.

Realtor.com compared the 100 largest metropolitan areas to forecast the best housing markets for first-time buyers in 2023. The report based its results on a mix of for-sale housing supply, affordability, a younger population, job prospects, dining options, and short commute times.

“For those with a bit of flexibility in where they live, there are markets where young buyers can find not just a relatively affordable home, but a neighborhood that offers a mix of economic opportunity and lifestyle amenities,” said Realtor.com Chief Economist Danielle Hale.

CityMetro areaInventory per 1000 households*Price-to- income ratio*Median listing price*2023 forecasted 25-34 year old population share2023 forecasted metro unemployment rate (%)2020 food and drink establishments per 1000 households
Portsmouth, Va.Virginia Beach, Va.58.83.9$239,00015.9%3.4%5.5
DeForest, Wisc.Madison, Wisc.58.13.6$389,90015.1%2.8%5.5
Windsor Locks, Conn.Hartford, Conn.41.92.7$239,90012.6%3.7%5.7
Gloucester City, N.J.Philadelphia, Pa.62.32.2$160,00013.6%3.7%5.6
Moore, Okla.Oklahoma City, Okla.54.73.0$220,00016.8%3.1%5.3
Magna, UtahSalt Lake City, Utah73.75.1$410,00016.8%2.4%5.6
Eggertsville, N.Y.Buffalo, N.Y.39.03.4$230,79613.3%3.9%5.4
Watervliet, N.Y.Albany, N.Y.18.34.0$228,30015.9%3.3%5.8
Mattydale, N.Y.Syracuse, N.Y.40.92.2$128,90012.9%3.6%5.3
Somersworth, N.H.Boston, Mass.30.14.6$329,90014.9%2.8%6.2
U.S. average44.95.1$370,00013.4%4.0%5.3
*12-month average from Dec. 2021 to Nov. 2022

Top housing markets for first-time home buyers: Breaking down the results

Each place in Realtor.com’s list above scored highly in most categories relative to the rest of the country. Of course, everywhere has trade-offs to weigh and some markets are expected to shine more brightly in the areas attractive to first-time home buyers.

Whether due to competition, a lack of listings, exorbitant prices, or all three, first-time buyers can face difficulties with breaking into homeownership.

Affordability is always a consideration for first-time buyers, but it’s also important to make sure that you’re settling down in a location that has all the qualities that make it an enjoyable place to live — after all, you’re not just buying a house, you’re investing in a community,” Hale said.

Five of the top-10 markets are above the U.S. average for available housing inventory, with Magna, Utah and Gloucester City, N.J., leading the way. Nine of them fell beneath the national price-to-income ratio, with the lowest coming in Gloucester City and Mattydale, N.Y. Those two also had the lowest median listing prices last year, with six others joining them below the country’s overall median.

Demographically, Magna and Moore, Okla., skewed youngest with the highest percentage of forecasted 25-to-34 year-old residents in 2023. All 10 locations have projected unemployment rates below the 4% expected for the U.S. in 2023, but Magna, DeForest, Wisc., and Somersworth, N.H., boast expected rates under 3%.

Further, each of these places has between 5.3 and 6.2 food and drink establishments per 1000 households as of 2020, meeting or exceeding the national mean. Somersworth, Watervliet, N.Y., and Windsor Locks, Conn., had the highest ratios.

In addition to the chart above, all 10 housing markets have average estimated 2023 commute times between 20 and 28 minutes. Realtor.com projected the national average for 2023 to be 30 minutes.

Advice for first-time borrowers

With mortgage rates anticipated to come down and price growth to slow over the course of 2023, first-time home buyers could find eased conditions compared to the last few years.

Of course, every housing market is unique, offering different blends of strengths and weaknesses. Realtor.com’s forecast shows cities and metro areas where many potential borrowers can afford a property with the amenities they’re looking for.

If you’re ready to take the steps to homeownership, reach out to a local mortgage lender to find out the loan types and interest rate you qualify for.

Paul Centopani
Authored By: Paul Centopani

The Mortgage Reports Editor

Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.