Strong competition in today’s prized real estate market has sidelined some first-time buyers, especially in major metropolitan areas.
These buyers typically account for about 40 percent of the market, but are now less than a third, according to the National Association of Realtors. Most are millennials between 25 and 34 years old.
Still, there is still hope for ownership. While the pandemic has led to strong demand for housing, it has also allowed for greater flexibility in where people can live, benefiting first-time buyers themselves.
So where are the best bets for them in 2021? Not in vain, the Midwest.
Four of the top ten markets for first-time buyers, as determined by realtor.com, are in the Midwest. Bloomington, Illinois, tops the list. Iowa City (Iowa), second place, followed by Kalamazoo, Michigan; Great Falls, Montana; Eau Claire, Wisconsin; Savannah, Georgia; Schenectady, New York; Taylorville, Utah; Harrisonburg, Virginia; and Rapid City, South Dakota. Some sources consider South Dakota to be a midwestern state.
All major markets have average house prices below the current national average of $ 370,000. Kalamazoo has the lowest average house price: $ 155,000, while Taylorsville is the highest: $ 350,000.
But it’s not just about price and affordability. To determine the best cities, realtor.com examined house prices in relation to local income, the proportion of young people aged 25 to 34 living in the market, the availability of houses for sale, job opportunities, distance to work and services. such as bars and restaurants. It also limited the classification to one city per state.
“With 50% fewer homes on the market this year than last year, the U.S. real estate market is competitive for all buyers,” said Danielle Hale, chief economist at realtor.com. “First-time buyers have a bigger disadvantage because they don’t have the funds from a previous sale of homes to help them with down payment or compete with bidding wars.”
Another real.com survey of potential first-time buyers found that 44% of millennials said they didn’t have enough to pay a down payment. Part of that, though, may be that they don’t know about programs designed to help them.
“There are some great loan programs available just for first-time home buyers that allow for a 5% discount without mortgage insurance,” said Jennifer Myers, a Dwell real estate agent who often works with millennials and she is herself. “There are programs like this across the country and many first-time buyers meet the requirements, but they just don’t know these great ways to make their first home more affordable.”
According to another study by RENTCafe, an apartment listing site, most cities where finding luxury and affordable rental apartments are beyond doubt if you can’t buy them. Georgia, specifically the Atlanta area, reached the top spots. The cities of Alabama and South Carolina remained on the list.