Worst Places for First-Time Home Buyers: CA, NJ, FL Top List via WalletHub

With July being one of the top months for home sales and a third of all home buyers also being first-timers, the personal-finance website WalletHub took an in-depth look at 2016’s Best & Worst Cities for First-Time Home Buyers.

To determine the most favorable housing markets for first-time buyers, WalletHub’s analysts took the pulse of real estate in 300 cities of varying sizes. Our data set ranges from housing affordability to real-estate tax rate to property-crime rate.

Buying a home for the first time is an exciting and important milestone in the lives of most consumers. But the collapse of the housing bubble nearly a decade ago remains fresh in the minds of many potential home buyers, especially given the different levels of economic recovery among U.S. cities.

In 2015, the National Association of Realtors® reported that among buyers of primary residences, 32 percent were first-timers, whereas the historical average has been 40 percent for this group. And according to a recent Gallup poll, 38 percent of non-homeowners in 2016 don’t plan to buy a home in the foreseeable future, compared with 31 percent three years ago.

But many consumers’ zeal for home buying hasn’t waned. To determine the attractiveness of first-time home-buyer markets across the U.S., WalletHub’s analysts compared 300 cities of varying sizes across 19 key metrics. Our data set ranges from housing affordability to real-estate taxes to property-crime rates. Continue reading below for our findings, expert commentary and a full description of our methodology.

Source: WalletHub

Best vs. Worst

  • Santa Monica, Calif., has the lowest housing affordability, 6.6 percent, which is 12 times lower than in Detroit, the city with the highest, 76.5 percent.
  • Honolulu has the lowest real-estate tax rate, 0.29 percent, which is 12 times lower than in Waukegan, Ill., the city with the highest, 3.49 percent.
  • Detroit has the highest rent-to-price ratio, 23.17 percent, which is six times higher than in Sunnyvale, Calif., the city with the lowest, 3.64 percent.
  • Laredo, Texas, has the lowest cost-of-living index, which is three times lower than in New York, the city with the highest.
  • Mission Viejo, Calif., has the lowest number of property crimes per 1,000 residents, 8.9, which is 12 times lower than in Miami Beach, Fla., the city with the highest, 102.7.
  • Shreveport, La., has the lowest average energy cost per household, $127.60, which is four times lower than in Honolulu, the city with the highest, $504.30