Comparing the best cities for first-time home buyers in 2025

Buying a home for the first time can be stressful and exciting.

It’s seen as a huge milestone for many Americans, but as of 2024, home purchases have hit an all-time low amid high home prices and skyrocketing interest rates.

The location for first-time home buyers can also greatly impact the price tag as well.

WalletHub and SmartAsset ranked the top cities for first-time home buyers recently.

Take a look and compare their data and see where your city ranked.

SmartAsset ranking

SmartAsset ranked 180 of the largest U.S. metro areas based on a variety of factors that could influence the buying process and long-term payoff for first-time homebuyers. 

These metrics included affordability relative to local median incomes, the level of housing inventory and demand for that inventory, projections of home-price growth and the relative population of residents in their 20s and 30s.

WalletHub ranking

WalletHub compared 300 cities based on 22 factors, including market attractiveness, affordability and quality of life. WalletHub’s data set ranged from cost of living to real-estate taxes to property-crime rate.

Dig deeper:

For the full ranking, click here.

Comparing rankings

Dig deeper:

For WalletHub’s ranking, cities in Florida, Arizona and Wisconsin were the stand-outs when it came to the best places for first-time home buyers.

The top 10 best cities included:

1. Palm Bay, Florida
2. Boise, Idaho
3. Tampa, Florida
4. Surprise, Arizona
5. Huntsville, Arizona
6. Gilbert, Arizona
7. Cape Coral, Florida
8. Orlando, Florida
9. Lakeland, Florida
10. Sunrise, Florida

For SmartAssets ranking, its top 10 best cities for first-time home buyers was a mixed bag.

1. McAllen, Texas
2. Lawton, Ohio
3. Killeen, Texas
4. Warner Robins, Georgia
5. Appleton, Wisconsin
6. Fayetteville, North Carolina
7. Savannah, Georgia
8. Clarksville, Tennessee
9. Cape Coral, Florida
10. Muncie, Indiana

What they’re saying: "Buying a home for the first time is a very stressful and difficult process, especially when housing prices are through the roof and interest rates have risen sharply in the past few years. The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward, but they also have a lot of housing choices as well as low crime rates and good schools," Chip Lupo, an analyst with WalletHub, said. 

Mortgage rates on the rise

Why you should care:

The average rate on a 30-year U.S. mortgage edged up early this month, ending a five-week decline in borrowing costs for homebuyers.

The long-term rate ticked up to 6.72% from 6.67% last week, mortgage buyer Freddie Mac told The Associated Press. A year ago, the rate averaged 6.89%.

High mortgage rates can add hundreds of dollars a month in costs for borrowers and reduce their purchasing power. That’s helped keep the U.S. housing market in a sales slump that dates back to 2022, when mortgage rates began to climb from the rock-bottom lows they reached during the pandemic.

Last year, sales of previously occupied U.S. homes sank to their lowest level in nearly 30 years. They’ve remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have continued to climb.

What’s next: Economists generally expect mortgage rates to stay relatively stable in the coming months, with forecasts calling for the average rate on a 30-year mortgage to remain in a range between 6% and 7% this year.

"Mortgage rates may come down modestly over the coming months but other economic headwinds —- including the impact of tariffs on the prices of consumer goods, weaker labor market conditions and rising consumer debt —- could be what continue to hold the housing market in the second half of 2025," said Lisa Sturtevant, chief economist at Bright MLS.

 

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