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Midwestern Metros Offer Best Option To First-Time Buyers

Katie Jensen
Dec 07, 2022
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Areas with more affordable housing should see relatively healthier markets and stronger sales in 2023.

KEY TAKEAWAYS
  • Wichita, the largest metro in Kansas, landed the top spot largely because of its affordability.
  • Zillow ranked U.S. metros based on mortgage and rent affordability for first-time buyers, available homes for sale, and share of listings with a price cut. 
  • Three metros in Ohio also made the Top 10, including Toledo, Akron, and Cleveland.
  • Detroit is the largest metro in the Top 10.

Homebuyer demand is beginning to normalize as the number of first-time buyers rebounds to pre-pandemic levels amid a changing market, according to a new Zillow analysis.

Metros in the Midwest are rated as having the most potential, with Kansas, Ohio, Michigan, and Missouri among the Top 10. 

Zillow ranked U.S. metros based on mortgage and rent affordability for first-time buyers, available homes for sale, and share of listings with a price cut. 

"Although housing affordability is extremely challenging these days, some markets will be more hospitable than others for first-time home buyers," said Zillow Senior Economist Orphe Divounguy. "These metros are potential hotbeds for those looking to buy their first home. Not only will shoppers find more affordable monthly mortgage costs and have an easier time qualifying for a smaller loan, but rent also is more affordable than elsewhere in the country, shortening the time it takes to save for a down payment."

According to Zillow, the 10 best metros for first-time buyers are:

  1. Wichita, Kan.
  2. Toledo, Ohio
  3. Syracuse, N.Y.
  4. Akron, Ohio
  5. Cleveland
  6. Tulsa, Okla.
  7. Detroit
  8. Pittsburgh
  9. St. Louis
  10. Little Rock, Ark.

Wichita, the largest metro in Kansas, landed the top spot largely because of its affordability; it’s among the top metros where people spend the smallest share of their income on rent and mortgage costs. It also has a higher share of for-sale listings relative to actual shoppers, allowing for more options and bargaining power for potential homebuyers. In Wichita, 22% of listings saw a price cut in October. 

Three metros in Ohio also made the Top 10, including Toledo, Akron, and Cleveland. Detroit is the largest metro in the Top 10. St. Louis and Pittsburgh also are on the list and among the nation’s largest metros. 

Generally, areas with more affordable housing — largely in the Midwest and Great Lakes regions — should see relatively healthier markets and stronger sales in 2023 when compared to other U.S. markets.

"Affordability remains the No. 1 challenge for first-time home buyers," said Amanda Pendleton, Zillow's home trends expert. "If they can overcome that significant hurdle, aspiring buyers have a better chance of landing a home than they've had in several years. They have more options, more time to decide and more negotiating power, meaning they may be able to land their dream home at a discount." 

affordability chart
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