First-time home buyers are a growing share of the market, making up half of all home buyers last year, according to Zillow’s Consumer Housing Trends Report. Homeownership is easier to break into in some markets than others, and Zillow has named this year’s best markets for first-time buyers, where their dollars go further and starter homes are relatively plentiful. 

Affordability is a tough hill to climb in today’s market, and it is especially steep for first-time buyers who do not have equity from a previous home purchase to tap into. Markets with relatively more affordable rent, more options and less competition for starter homes provide the best opportunities. 

Zillow’s 2024 list of the best markets for first-time buyers is based on four metrics: 

• Rent affordability, as defined by the share of median household income spent on rent.
• The share of available inventory on Zillow that the median household can comfortably afford, meaning spending no more than 30% of income on the estimated monthly mortgage cost.  
• The ratio of affordable for-sale inventory to renter households. More inventory per renter household is an indicator of less competition for each listing. 
• The share of households age 29-43. More households of similar age means a higher score in Zillow’s ranking. 

More affordable rent shortens the time it takes to save for a down payment, and a higher number of active for-sale listings relative to the potential homebuyer population means more options – and more bargaining power – for potential first time home buyers in those markets.

These are Zillow’s 10 best markets for first-time home buyers this year:

1. St Louis, MO
   1. Home Buying Age Households As a Share of Total Households: 26%
   2. Percentage of Median Household Income Spent on Rent: 20%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 67%
   4. Affordable Listings To Renter Household Ratio: 3.4 per 100 Renters
2. Detroit, MI
   1. Home Buying Age Households As a Share of Total Households: 24%
   2. Percentage of Median Household Income Spent on Rent: 21%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 64%
   4. Affordable Listings To Renter Household Ratio: 4 per 100 Renters
3. Minneapolis, MN
   1. Home Buying Age Households As a Share of Total Households: 28%
   2. Percentage of Median Household Income Spent on Rent: 20%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 48%
   4. Affordable Listings To Renter Household Ratio: 2.5 per 100 Renters
4. Indianapolis, IN
   1. Home Buying Age Households As a Share of Total Households: 29%
   2. Percentage of Median Household Income Spent on Rent: 22%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 50%
   4. Affordable Listings To Renter Household Ratio: 2.6 per 100 Renters
5. Austin, TX
   1. Home Buying Age Households As a Share of Total Households: 34%
   2. Percentage of Median Household Income Spent on Rent: 20%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 23%
   4. Affordable Listings To Renter Household Ratio: 1.3 per 100 Renters
6. Pittsburgh, PA
   1. Home Buying Age Households As a Share of Total Households: 24%
   2. Percentage of Median Household Income Spent on Rent: 22%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 63%
   4. Affordable Listings To Renter Household Ratio: 3.7 per 100 Renters
7. San Antonio, TX
   1. Home Buying Age Households As a Share of Total Households: 31%
   2. Percentage of Median Household Income Spent on Rent: 23%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 33%
   4. Affordable Listings To Renter Household Ratio: 2.6 per 100 Renters
8. Birmingham, AL
   1. Home Buying Age Households As a Share of Total Households: 25%
   2. Percentage of Median Household Income Spent on Rent: 22%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 47%
   4. Affordable Listings To Renter Household Ratio: 4.2 per 100 Renters
9. Kansas City, MO
   1. Home Buying Age Households As a Share of Total Households: 27%
   2. Percentage of Median Household Income Spent on Rent: 21%
   3. Affordable Listings As a Percent of Total For-Sale Inventory: 51%
   4. Affordable Listings To Renter Household Ratio: 2.2 per 100 Renters
10. Baltimore, MD
    1. Home Buying Age Households As a Share of Total Households: 27%
    2. Percentage of Median Household Income Spent on Rent: 22%
    3. Affordable Listings As a Percent of Total For-Sale Inventory: 56%
    4. Affordable Listings To Renter Household Ratio: 2.3 per 100 Renters

Original Article by: Orphe Divounguy, Zillow