To understand the country’s best cities for first time buyers, real estate website Zillow.com analyzed data from 125 local markets, comparing median home values, average mortgage payments as a percentage of household income (affordability) and improving trends in home prices.
In addition to the housing data, the unemployment rate and overall cost of living was taken into account, with cost of living data from demographer Bert Sperling’s Best Places, which uses 100 to denote the national average. For example, if a city has a cost of living of 90, it costs a resident 10% less to live in the area, compared to the country as a whole.
These cities are all highly affordable when average incomes are taken into account, and also have an employment landscape that is much more favorable than the rest of the country, making them prime locations for those looking to buy their first home.
So, what are the best US cities for starter homes? Click ahead to find out!
Zillow median home value: $107,900
Month-over-month change: +0.42%
Avg monthly mortgage payment: $524.17
Mortgage payment as % of income: 14%
Unemployment rate: 9.3%
Cost of living: 77.4
The best US city for starter homes, Augusta has now seen four consecutive months of significant monthly appreciation, but median home prices remain very low, at less than 60% of the national average, providing a good opportunity for first time home buyers.
Although Augusta home prices have decreased 5.63% since this time last year, trends in recent months show significant upward movement, signaling that the city has just come off the bottom.
In addition to having an unemployment rate that is better than most of the nation, Augusta’s cost of living is 22.6% lower than the national average, while home buyers can expect to devote only 14% of their annual income to paying off their mortgage.
Zillow median home value: $102,300
Month-over-month change: -0.03%
Avg monthly mortgage payment: $496.96
Mortgage payment as % of income: 12%
Unemployment rate: 11.2%
Cost of living: 76.70
In Dayton, the monthly rate of decline has shrunk significantly over the past 7 months and has dropped to less than -0.10% for the past three months. Although home prices are still decreasing slightly, overall home values are among the lowest on this list, while buyers can expect mortgage payments to only take up 12% of their annual income.
Month-over-month change: -0.03%
Avg monthly mortgage payment: $496.96
Mortgage payment as % of income: 12%
Unemployment rate: 11.2%
Cost of living: 76.70
In Dayton, the monthly rate of decline has shrunk significantly over the past 7 months and has dropped to less than -0.10% for the past three months. Although home prices are still decreasing slightly, overall home values are among the lowest on this list, while buyers can expect mortgage payments to only take up 12% of their annual income.
Zillow median home value: $117,400
Month-over-month change: +0.29%
Avg monthly mortgage payment: $570.32
Mortgage payment as % of income: 15%
Unemployment rate: 7.5%
Cost of living: 79.3
Tulsa has now seen five consecutive months of monthly appreciation, with year-over-year appreciation at 2.39%. Both unemployment and cost of living are also significantly lower than the national average.
Zillow median home value:$117,400
Month-over-month change: +0.15%
Avg monthly mortgage payment: $570.32
Mortgage payment as % of income: 14%
Unemployment rate: 10.1%
Cost of living: 75.2
There have now been four consecutive months of monthly appreciation in Akron, a city where residents enjoy a cost of living nearly 25% lower than the national average.
Month-over-month change: +0.15%
Avg monthly mortgage payment: $570.32
Mortgage payment as % of income: 14%
Unemployment rate: 10.1%
Cost of living: 75.2
There have now been four consecutive months of monthly appreciation in Akron, a city where residents enjoy a cost of living nearly 25% lower than the national average.
Zillow median home value: $105,800
Month-over-month change: +0.26%
Avg monthly mortgage payment: $513.97
Mortgage payment as % of income: 14%
Unemployment rate: 11.8%
Cost of living: 78.4
Spartanburg has seen five consecutive months of monthly appreciation, and although the unemployment rate is at 11.8%, the city’s cost of living and median home values are significantly lower than the national average. First time buyers in this South Carolina city can expect to pay about $514 in monthly mortgage payments.
Zillow median home value: $100,900
Month-over-month change: +1.07%
Avg monthly mortgage payment: $490.16
Mortgage payment as % of income: 13%
Unemployment rate: 7.1%
Cost of living: 88.40
In upstate New York, Utica has seen five consecutive months of significant monthly appreciation, with the most recent month-over-month increase above 1%. Both cost of living and the unemployment rate are much lower than the national average, while median home values stand at just over 55% of the national average.
Month-over-month change: +1.07%
Avg monthly mortgage payment: $490.16
Mortgage payment as % of income: 13%
Unemployment rate: 7.1%
Cost of living: 88.40
In upstate New York, Utica has seen five consecutive months of significant monthly appreciation, with the most recent month-over-month increase above 1%. Both cost of living and the unemployment rate are much lower than the national average, while median home values stand at just over 55% of the national average.
Zillow median home value: $120,400
Month-over-month change: +0.55%
Avg monthly mortgage payment: $584.89
Mortgage payment as % of income: 14%
Unemployment rate: 9.3%
Cost of living: 80.7
In Cleveland, there have now been six consecutive months of flat or monthly appreciation, with a positive increase of 0.55% in the most recent month-over-month change. Although unemployment is relatively high compared to other cities on this list, Cleveland’s cost of living is 19.3% lower than the national average.
Zillow median home value: $121,100
Month-over-month change: +1.55%
Avg monthly mortgage payment: $588.29
Mortgage payment as % of income: 15%
Unemployment rate: 6.4%
Cost of living: 83.1
There have now been seven consecutive months of significant monthly appreciation in Oklahoma City, which also has a relatively low unemployment rate of 6.4%. In addition, median home values are over $60,000 less than the national average in the city.
Month-over-month change: +1.55%
Avg monthly mortgage payment: $588.29
Mortgage payment as % of income: 15%
Unemployment rate: 6.4%
Cost of living: 83.1
There have now been seven consecutive months of significant monthly appreciation in Oklahoma City, which also has a relatively low unemployment rate of 6.4%. In addition, median home values are over $60,000 less than the national average in the city.
Zillow median home value: $107,700
Month-over-month change: +0.46%
Avg monthly mortgage payment: $523.20
Mortgage payment as % of income: 13%
Unemployment rate: 8.5%
Cost of living: 87.7
Pittsburgh has seen flat or positive monthly appreciation for the past five months, while home prices are at about 60% of the national average of $182,200. With this taken into account, first time buyers can expect to devote only 13% of their annual income to mortgage payments, on average.
Month-over-month change: +0.46%
Avg monthly mortgage payment: $523.20
Mortgage payment as % of income: 13%
Unemployment rate: 8.5%
Cost of living: 87.7
Pittsburgh has seen flat or positive monthly appreciation for the past five months, while home prices are at about 60% of the national average of $182,200. With this taken into account, first time buyers can expect to devote only 13% of their annual income to mortgage payments, on average.
10. Des Moines, Iowa
Zillow median home value: $145,700
Month-over-month change: +0.81% Avg monthly mortgage payment: $707.80
Mortgage payment as % of income: 15%
Unemployment rate: 6.3%
Cost of living: 81.5
For home prices in Des Moines, there have now been six consecutive months of flat or monthly appreciation, with values that are about 20% lower than the national average. In addition, the city has an unemployment rate that is almost half the national average and a low overall cost of living.