Beyond relative affordability, the best markets for first-time home buyers in 2023 will offer residents a strong job market, short commute times, ample places to eat and drink, a younger population, and a relatively larger inventory of homes to choose from, according to Realtor.com. Portsmouth, Virginia; DeForest, Wisconsin; Windsor Locks, Connecticut; Gloucester City, New Jersey; and Moore, Oklahoma top Realtor.com’s list of Best Markets for First-Time Home Buyers in 2023, ranked on affordability, livability, and where it will be easiest for young buyers to break into the housing market.
“The housing market will continue to be challenging for first-time buyers in the coming year, but for those with a bit of flexibility in where they live, there are markets where young buyers can find not just a relatively affordable home, but a neighborhood that offers a mix of economic opportunity and lifestyle amenities,” says Realtor.com chief economist Danielle Hale. “Affordability is always a consideration for first-time buyers, but it’s also important to make sure that you’re settling down in a location that has all the qualities that make it an enjoyable place to live—after all, you’re not just buying a house, you’re investing in a community.”
Magna, Utah; Eggertsville, New York; Watervliet, New York; Mattydale, New York; and Somersworth, New Hampshire, round out Realtor.com’s top markets for first-time buyers in 2023.
Affordability remains a key factor for first-time home buyers, as home prices remain high and interest rates are projected to remain elevated for the early part of 2023. The best markets for first-time buyers offer an average 2022 listing price to income ratio of 3.5 for 25- to 34-year-olds, much lower than the national ratio of 5.1, according to Realtor.com. Mattydale and Gloucester City are tied for the most affordable locations on the list, with a price to income ratio of 2.2. While affordability typically comes at the expense of proximity to employment centers, the top towns for first-time buyers have an average expected commute of 24 minutes, faster than the national average of 30 minutes.
The top 10 markets offer improved inventory conditions relative to the overall market, according to Realtor.com. The top markets have an average of 47.8 listings per 1,000 households, higher than the national rate of 45.2. Magna has the widest selection of listings per household on the list at a rate of 73.7 listings per 1,000 households. The strength of a metro’s housing market also factored into the rankings for first-time buyers, as homes likely to hold or appreciate in value are more appealing to potential first-time buyers. The top markets for 2023 are located within metro areas that have an average forecasted 2023 home sales growth rate of 1.2%, higher than the national rate, which is expected to decline by 14.1%. Somersworth, located within the Boston metro area, is projected to have price growth of 9.5% in 2023, and DeForest, located in the Madison metro, is forecast to experience price appreciation of 9% in 2023.
Younger buyers, a large cohort of first-time buyers, are often drawn to younger towns. The top markets on Realtor.com’s list have an average population share of 14.8% for residents in the 25-to-34 age cohort, higher than the national average of 13.4%. Magna and Moore have the highest share of 25- to 34-year-old residents at 16.8%. The top markets also feature an average 5.6 food and drink establishments per 1,000 households, higher than the national rate of 5.3 per 1,000 households.
The list for best markets for first-time buyers ranked towns with an expected 2023 population of at least 5,000 residents, according to Realtor.com.
