Cleveland, Chicago, Houston, and Birmingham, Alabama, also made the top 10 first time buyer market ranking list put together by real estate firm Zillow.
To determine which markets are best for those looking to buy their first home, Zillow looked for places where it’s more affordable to make a monthly mortgage payment than a monthly rental payment.
The research also looked at median home values and competition, including how many homes the first time buyer has to choose from and whether they are likely to be up against all-cash offers.
It found that San Jose, Seattle and Austin are among the hardest places for first time buyers to get on the housing market, a conundrum for many young people who move to those cities because of their hot job markets, only to find a limited and unaffordable selection of starter homes to choose from.
‘Buying your first home is a big decision that takes a lot of planning. First time buyers across the US are up against high prices and low inventory,’ said Zillow chief economist Svenja Gudell.
‘But these are the places where the availability of affordable, entry level homes and the presence of cash buyers are less of an issue. First time buyers in these markets won’t have to deal with as many bidding wars or runaway price as they’ll be able to find a first home that fits their needs with less stress. With record low mortgage rates, it’s a good time to buy a home and certainly worth considering,’ she pointed out.
In Indianapolis, home buyers can expect to spend 11% of their income on a monthly mortgage payment, some 4% less than the US average. Renters, on the other hand, can expect to spend 26% of their income on monthly rent, an incentive for renters in Indianapolis to become home owners.
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