Realtor.com Forecasts the Best Markets for First-Time Homebuyers in 202216199
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Realtor.com® Forecasts the Best Markets for First-Time Homebuyers in 2022
Struggling to buy your first home? Try Magna, Utah; Chalco, Neb. or Mauldin, S.C., where young homebuyers have a better shot at success
SANTA CLARA, Calif., Jan. 10, 2022 /PRNewswire/ -- With 2022 shaping up to be another challenging year for hopeful homebuyers, Realtor.com® ran the numbers to find the best markets for people looking to buy their first home this year. The first annual Best Markets for First-Time Homebuyers Report predicts the cities and towns with the best combination of quality of life and affordability that young homebuyers are looking for.
What is it that makes these markets great for first-time homebuyers? They have strong job markets, short commute times, plenty of places to eat and drink, a younger population, affordability, and more homes to choose from. The 2022 top 10 markets, in ranked order, are: Magna, Utah, Chalco, Neb., Mauldin, S. C., Beech Grove, Ind., Portsmouth, Va., Cottage Grove, Wis., Grimes, Iowa, Kuna, Idaho, Ferndale, Mich. and Maitland, Fla.
"Buying a first-home is always a challenging undertaking, and it's been an especially tough couple years for first-time buyers, many of whom are struggling to find a home that's within their budget or win in a competitive bidding situation," said Realtor.com® Chief Economist Danielle Hale. "With this in mind, and the fact that remote work has given people more flexibility in where they live, we wanted to identify markets where first timers have a chance to become homeowners and find a great quality of life."
Here are some of the reasons these markets are attractive to first-time homebuyers:
1. More homes to choose from – The best markets boast almost twice the number of homes for sale than the national average, in 2021 these markets had 72.9 active listings per 1,000 households compared to the national rate of 44.9. Buyers looking for lots of options should check out Kuna, Idaho, which has the most choice on the list with 160 active listings per 1,000 households.
2. Lots of young people – The 10 best markets for first-time homebuyers all have a younger population than the country overall. Specifically, these areas have an average of 15.2% of residents who are between the ages of 25-34 years old compared to 13.5% of the country overall. The youngest city on the list is Maitland, Fla. where you'll find that 17.5% of the population are young adults.
3. Plenty to eat and drink – Lifestyle is important to a lot of first-time homebuyers and the best markets also include plenty of options for a night out on the town nearby. Our top places for first time homebuyers are located in metros that have an average of 5.3 food and drink establishments per 1,000 households in the broader metro area, higher than other affordable places on our list, which average 5.0. Foodies can head to Magna in the Salt Lake City metro area, which has the most spots to dine out or grab a drink at 5.8 per 1,000 households.
4. More affordable homes – Sticking to a budget can be tricky for many first-time homebuyers, but the best markets have options for the cost-conscious. By comparing the typical home list price to the average income for young adults, Realtor.com® determined that the home-price-to-income ratio in the best markets (3.9) was much lower than the national rate (5.0). Home shoppers who are looking for affordability can head to Chalco, Neb. or Ferndale, Mich., which offer the most affordability on the list.
5. Lots of good jobs – A healthy job market is important when finding a place to settle down, and the best markets are in metro areas that have lots of jobs to offer. These metro areas have a forecasted unemployment rate of just 2.7%, well below the national average of 3.6%. If job selection is at the top of the wish-list, buyers can check out Chalco, Neb. in the Omaha metro area and Cottage Grove, Wis. in the Madison metro area which both have a forecasted unemployment rate of just 2.2%.
6. Strong local housing markets – All of the cities on the list are located within metro areas that are forecasted to have strong home sales and price growth. Sales in these surrounding metro areas are projected to grow at 10.2% in 2022, much faster than the national average of 6.6%. Prices are expected to rise by 5.4%, which is significantly higher than the national average rate of 2.9%. Magna, Utah, which is in the Salt Lake City metro, has the highest expected sales growth rate of 15.2% and the highest expected price growth of 8.5%.
7. Shorter commutes – No one wants to spend hours a day in the car or on a train, and the best markets offer jobs that are close to home. In fact, the average commute time in these markets is 26 minutes – that's 4 minutes faster than the national average. If you're looking for a short commute, try Grimes, Iowa, where locals typically get to work in just 23 minutes.
First-time homebuyers can visit Realtor.com® to learn more about the buying process, find out how much they can afford, and even get connected to a lender to get pre-approved for a mortgage. And to stay competitive in this fast-moving market, shoppers can set a price alert so they know as soon as a home that fits their wish list hits the market and use Realtor.com®'s collaborate and share features to quickly get feedback from friends and family.
Realtor.com® 2022 10 Best Markets for First-Time Homebuyers:
Coming in at No. 1, Magna, Utah is located near Salt Lake City, which was named Realtor.com®'s No. 1 Top Market for 2022. Magna's easy access to the lakes and mountains are a huge draw for outdoor enthusiasts and its close proximity to the city offers lots of jobs without a long commute. New home construction is booming in Magna, providing more options for home shoppers. The area has a fast-growing tech industry and is also an attractive destination for nature lovers who have the ability to work remotely. As such, it has seen a large influx of out-of-state transplants since the pandemic began.
In the No. 2 spot, Chalco, Neb., is located just outside of Omaha. The Omaha area is home to 4 Fortune 500 companies including Berkshire-Hathaway, offering lots of job opportunities. Locals enjoy leisure time at the Chalco Hills Recreation Area, a popular destination for hiking, biking and kayaking. There are also 9 universities and colleges in the area, including University of Nebraska Omaha and Creighton University.
Mauldin, S. C.
At No. 3 on the list is Mauldin, South Carolina, where first-time buyers will find small town southern charm and natural attractions combined with a short commute to Greenville's downtown area, airport and strong jobs market. Residents have plenty to do in Mauldin itself, from its Sports and Cultural Centers to a booming restaurant scene, including local favorites Wholly Smoke BBQ and Dillard's Ice Cream. For young families, Mauldin also has top-rated schools like Monarch Elementary.
Beech Grove, Ind.
Landing at the No. 4 spot is Beech Grove, Ind. Known for a strong sense of community, Beech Grove is a city in its own right – literally – as the market is an "excluded city" with a separate government and police department from the nearby Indianapolis metro area. Home shoppers looking for a sense of nightlife will find plenty of restaurants in the Main Street downtown area, 24/7 bowling at Beech Grove Bowl and local craft breweries like Scarlet Grove. For families, Beech Grove has good public schools like Acton Elementary, as well as top-rated private schools, including Cathedral High.
Taking the No. 5 place on the list is Portsmouth, Va. Located just across the Elizabeth River from Norfolk, Va., this little town offers affordable home prices at $215,000 – well below the national average of $332,000 – and is within driving distance of a variety of outdoor activities such as water sports, boating, skiing, snowboarding, and hiking. Home to the Norfolk Naval Shipyard and The U.S. Coastguard Portsmouth, it has a large military population and offers many job opportunities in defense and related industries. Norfolk Southern and NASA Langley Research Center are two big employers in the area.
Cottage Grove, Wis.
The sixth best market for first-time homebuyers is Cottage Grove, Wis. Just 15 miles outside Madison, this hidden gem offers residents close proximity to city jobs with a slower pace of life. The town itself offers a variety of charming shops and restaurants and is within a few minutes of the two prominent golf courses in the area – The Oaks Golf Course and Door Creek Golf Course. When looking for nightlife, residents turn to Madison for its restaurant and bar scene and daytime activities such as boating on Lake Mendota and Lake Monona and visiting the popular Olbrich Botanical Gardens.
Landing in the No. 7 spot, Grimes, Iowa is located just west of Des Moines. The area's low cost of living and strong job market make it an attractive spot for young people. Many residents are pleased to learn that they can buy a home for not too much more than the cost of renting. Popular activities include cheering on the Iowa State University football and basketball teams. Magna is just a short trip to Des Moines where locals can enjoy the arts and many cultural activities. Those looking to start a family will appreciate the highly rated schools such as Webster Elementary School.
No. 8 on the list is Kuna, Idaho, located just outside of Boise. Locals love the area's great access to outdoor activities, beautiful surroundings and friendly people. While the Boise housing market has been booming, young homebuyers are likely to have better luck in Kuna than some of the surrounding towns. The area experienced an influx of transplants from areas like Calif. and Wash. who are drawn to the lower cost of living, great quality of life and good schools including Falcon Ridge Public Charter.
In 9th place is Ferndale, Mich. This city is attractive to first-time buyers because of its diversity, vibrant downtown area and great restaurants. It is well-known to locals for its thriving LGBTQ+ community. Ferndale's proximity to Detroit and low price point make it attractive to first-time buyers looking to break into the housing market. Ferndale has recently experienced an influx of buyers from nearby states like Illinois and Ohio who appreciate the low cost of living.
Rounding out the top 10 is Maitland, Fla. Located near Orlando, Maitland is home to a number of popular lakes and offers a wide range of homes, many of which are on large lots. The town's good schools, such as Dommerich Elementary, are a draw for first-time homebuyers who often have young children. During the pandemic the area saw a lot of transplants from places such as Calif., N.Y. and Boston, many of whom are taking advantage of remote work – the area is also home to a number of workers from Disney and Amazon.
Realtor.com® Best Markets for First-Time Homebuyers Ranked
Realtor.com® ranked 1,112 cities and places with a population of more than 5,000 based on the following criteria, capping the list at one city per metro to allow for a greater diversity of options across the country:
1. The share of 25-34 year-olds in the local population.
2. The availability of homes for sale, measured by active listings per 1,000 existing households.
3. A measure of affordability, estimated by the ratio of listing prices to gross incomes of 25-34 year-olds in each city.
4. A measure of job opportunities, estimated by the unemployment rate of each city's surrounding metro area.
5. The average commute time to work.
6. A measure of the amenities in an area, estimated by the count of food and drink establishments per 1,000 households in the city's surrounding metro area.
7. Forecasted metro home sales and home price growth in 2022. The inventory of homes for sale and local median listing prices are from Realtor.com® December 2020 to November 2022 listing data.
8. The cities and towns are defined as postal codes mapped to Census Designated places and reflect approximate but not true city or town boundaries. The population, household count, household income, and average commute time data were sourced from 2021 and 2022 Claritas estimates based on Census Bureau data. 9. The stated forecasted unemployment rates are Moody's Analytics projections of U.S. Bureau of Labor Statistics Local Area Unemployment Statistics. Counts of food and beverage establishments are from 2018 County Business Patterns data.
Realtor.com® makes buying, selling, renting and living in homes easier and more rewarding for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago, and today through its website and mobile apps offers a marketplace where people can learn about their options, trust in the transparency of information provided to them, and get services and resources that are personalized to their needs. Using proprietary data science and machine learning technology, Realtor.com® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, Realtor.com® is a trusted provider of consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Source: Realtor.com via PR Newswire
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