Top 10 Best Places For First-Time Home Buyers

With climbing interest rates and home prices remaining high across the country, first-time home buyers are often getting priced out of many markets. It’s now more important than ever that those entering the housing market for the first time know where to find the best deals. While this group of buyers may find it difficult to compete in the country’s largest metro areas, like New York City and Los Angeles, there are several midsize cities and charming small towns that can be great places to enter into homeownership.

With lower home prices and lower-than-average costs of living, the following cities are some of the best places for first time home buyers to purchase a home.

Key Findings

Of the cities included on this list, here’s some interesting information we found:

• The South and Midwest are the best regions of the United States for first time home buyers.
• The average cost of living of the cities on this list is 16.5% below the national average.
• The average home price of the cities on this list is $289,476 – which is 36% below the national average of $452,510.

Even if home buyers aren’t interested in living in these particular cities included on this list, they should still consider these findings when choosing a place to buy their first homes. That includes considering the Midwest and southern regions of the U.S. and looking at areas with average home prices and costs of living below the national average.

Finding The Best Places To Live For First-Time Home Buyers

The data team at Rocket Homes^SM chose the following metrics to find the top 10 best places for first-time home buyers.

• Home price
• Cost of living
• Violent and property crime

This information can be helpful when deciding where to live because owning a home for the first time can be an eye-opening experience. Often, first time home buyers are using much of their savings to make the down payment and pay closing costs. On top of that, they often need to get used to having a monthly mortgage payment, paying property taxes and budgeting home maintenance costs and home emergencies.

Knowing the crime rate and cost of living for an area can be especially important when buying a house out of state because buyers may not know the area or where safe neighborhoods are compared to others. Knowing what to expect cost-wise can also help new homeowners when budgeting for their new life in their new location.

Best Places For First-Time Home Buyers

The following cities are best place to move for first time home buyers who prioritize affordability.

1. Muskogee, Oklahoma

Population: 36,760

Home Price: $258,517

Cost of Living Index: 21.8% below national average

Those who are first-time home buyers in Oklahoma may be drawn to Muskogee for its low cost of living – almost 22% below the national average – or its active community – or both. The community event calendar comes stacked with such affairs as annual festivals, book clubs, fun runs, holiday parties and much more. Outside of planned activities, there’s plenty to do and see outdoors, as it’s located at the convergence of three rivers and not too far from the Ozark-St. Francis National Forest.

For more information on the Muskogee market, check out homes for sale in Muskogee, Oklahoma and Muskogee, Oklahoma housing market trends. For other great places to live in the Sooner state, read more about the best places to live in Oklahoma.

2. Harlingen, Texas

Population: 71,925

Home Price: $274,631

Cost of Living Index: 22.9% below national average

Harlingen may be a top option for first-time home buyers in Texas who wish to be surrounded by nature. With more than 1,200 acres of public parks land and situated in an are recognized as an international destination for birding, there are many ways to encounter flora, wildlife and the natural environment – from hunting, fishing and hiking to more leisurely activities like golfing, meditating or traveling to nearby South Padre Island.

Check out homes for sale in Harlingen, Texas and Harlingen, Texas housing market trends to learn more about buying in the area. Those looking to move to the Lone Star State can find more notable areas by reviewing the best places to live in Texas.

3. Decatur, Illinois

Population: 69,646

Home Price: $271,518

Cost of Living Index: 20% below national average

Decatur has seen much growth recently, with new businesses investments, green initiatives and neighborhood revitalization efforts. First-time home buyers in Illinois who choose to move to Decatur may find an active community that welcomes new voices to be heard. In the past, the city has surveyed both senior and Millennial populations about their concerns and desires for the city and held no-holds barred conversations where residents were encouraged to be honest and bold in sharing their thoughts.

Before moving to the area, learn more about homes for sale in Decatur, Illinois and Decatur, Illinois housing market trends.

4. Augusta, Georgia

Population: 201,196

Home Price: $276,582

Cost of Living Index: 15.5% below national average

With average home prices around under $300,000, first-time home buyers in Georgia may find an affordable place to put down roots in Augusta. There, they’ll find a city immersed in culture – from an historic downtown area, Savannah Riverwalk and restaurants serving Southern cuisine to sculpture trails, museums and annual events and festivals. Among those annual events is one of the most prominent golf tournaments in the country – and the only championship tournament held in the same place every year – the Masters.

If you’re thinking of buying one of the homes for sale in Augusta, Georgia, check out Augusta, Georgia housing market trends to learn more.

5. Lexington, North Carolina

Population: 19,347

Home Price: $282,667

Cost of Living Index: 15.9% below national average

Lexington may be the “Barbeque Capital of the World,” but there are plenty of other things first-time home buyers in North Carolina can taste, see and do if they choose the city as their new locale. That includes sweets from local, scratch-made bakeries, goods from legacy businesses and stops along the Southern Gateway Wine Trail. After all, the city is located in North Carolina’s first federally recognized wine region.

If you’re thinking about moving to North Carolina, this city may be a good option. Check out homes for sale in Lexington, North Carolina and review Lexington, North Carolina housing market trends to learn more.

6. Burlington, Iowa

Population: 23,713

Home Price: $270,071

Cost of Living Index: 12.6% below national average

With one of the lowest average home prices on this list, Burlington may offer an affordable option for first-time home buyers in Iowa. The city also offers something for the curious. It’s winding and intricate Snake Alley was named the number one Odd Spot in “Ripley’s Guide to the Curious Corners of America.” Spanning 275 feet, the blue-clay brick and limestone alley winds its way down a grassy hill and is one of the city’s most famous landmarks. There’s even more to pique one’s interest, including museums, historic places and a log cabin where the first American flag was raised in Iowa.

Interested in buying a home for sale in Burlington, Iowa? Learn more about Burlington, Iowa housing market trends. If you want to check out other great areas in the Hawkeye State, read about the best places to live in Iowa.

7. Statesboro, Georgia

Population: 33,399

Home Price: $320,406

Cost of Living Index: 17% below national average

If you’re looking for tips on buying a house in Georgia, one you may find useful is to consider Statesboro, especially as a first-time home buyer. With a cost of living 17% below the national average, the City That Soars has an abundance of places to frequent that cost less, including antique and thrift shops, several state parks, city markets, museums and more than 150 restaurants. The city is also home to Georgia Southern University, one of the largest colleges in the state.

See more by reviewing homes for sale in Statesboro, Georgia and checking out Statesboro, Georgia housing market trends.

8. Martinsville, Virginia

Population: 13,517

Home Price: $318,444

Cost of Living Index: 14% below national average

Source:  David "Wolf" Reynolds

Martinsville’s population may be less than 15,000 people, but there’s a lot of life packed into the small town that first-time home buyers in Virginia may enjoy. Public art installations inundate the city, thanks to the Piedmont Arts experiences, which include an art garden and pollinator path, various sculptures and several large murals around town. Those looking for faster-moving works of art can get their fill at the Martinsville Speedway, where NASCAR Cup Series races have occurred every year, since the division started in 1949.

For more information on the area, review homes for sale in Martinsville, Virginia and Martinsville, Virginia housing market trends. Details on other popular areas can be found on our list of best places to live in Virginia.

9. Kokomo, Indiana

Population: 59,691

Home Price: $315,173

Cost of Living Index: 13.2% below national average

With such offerings as farmer’s markets, architecture walking tours and breweries as well as places called “Artist Alley” and “Geek Street,” Kokomo has something the many different types of interests and lifestyles of first-time home buyers in Indiana. From golf courses and aquatic centers to skate parks, museums and a pavilion housing the world’s largest steer, there are tons of things to do and see as a resident of Kokomo.

Learn more about real estate in the area by browsing homes for sale in Kokomo, Indiana, and learning more about Kokomo, Indiana housing market trends.

10. Danville, Virginia

Population: 42,215

Home Price: $306,750

Cost of Living Index: 12.3% below national average

If you’re thinking of buying a house in Virginia, Danville may be a good option for your first home. With a population of under 50,000, it has a charming, small town feel but still has tons of amenities, including historical sites, museums, a farmer’s market, a vibrant river district and the Virginia International Raceway less than 15 miles away.

To learn more about real estate in this city, check out homes for sale in Danville, Virginia and Danville, Virginia housing market trends.

Tips On How To Prepare As A First-Time Home Buyer

When preparing for buying a house for the first time, you may find the following tips useful.

• Consider whether it’s the right time to buy: The right time to buy will be different for everyone. Some indicators of a right time may be that you’re financially secure and can afford a down payment, closing costs and a monthly mortgage payment. Another indicator that it’s time could be that your family is growing too big for that 2-bedroom apartment. Current real estate market trends may also show the time is right, especially if it’s a buyer’s market.
• Know what you're looking for in a neighborhood: The right location will depend on your lifestyle. While this list focuses on affordability, you may choose the right neighborhood based on amenities, schools or proximity to work. It’s important to know what you want, and research different locales based on the criteria you set.
• Prepare your credit score: You should get your credit mortgage-ready before applying for a loan because lenders will look at credit score when determining whether you qualify and what terms you should receive.
• Save for a down payment: Unless you’re applying for certain government-insured loans, like a VA loan, a minimum down payment will be required. The minimum will depend on the loan but is usually between 3% – 3.5% for a first-time home buyer.
• Make a budget: Knowing how much house you can afford when house hunting is imperative. This keeps you from wasting time looking at homes you can’t afford and will also keep you from spending more than you can afford. It’s important to remember that just because you were approved for a specific number doesn’t necessarily mean you should borrow that much.
• Work with a trusted real estate agent: You’ll want to work with a professional real estate agent to help them buy a property because they can make the whole process run smoothly. They’ll use their local knowledge and access to the multiple listing service (MLS) to find the best home for your needs. They’ll also help you negotiate the terms of the sale.
• Look into first-time home buyer programs: Make sure you research first-time home buyer assistance programs to help with your first home purchase. These programs can help with down payment and closing costs.

The Bottom Line: Choose Your First Home Somewhere That Sets You Up For Success

The best places for first-time home buyers are often found in the Midwest and South, where housing prices and costs of living are typically lower than the national average. While this list provides the top 10 cities based on affordability, there may be other cities that better meet the lifestyles and goals of first-time home buyers who may not prioritize these two factors. Finding the best place to live for one’s own needs may require researching, visiting cities and working with a real estate professional. Once deciding on a general location, home buyers can start the mortgage approval process today with our friends at Rocket Mortgage^®.

Methodology: Finding The Best Places For First-Time Home Buyers

Rocket Homes^SM data team collected and analyzed the most recent data on four citywide metrics to give us insight into the top cities for first-time home buyers. For this study, 265 of the most populated metro areas were analyzed. The metrics used in this study include 2022 average home price, 2022 cost of living index, violent crime rate and property crime rate. Cities with average home prices above the national average were removed from the ranking, as well as cities with violent crime rates greater than or equal to 55 and property crime rates greater than or equal to 65. Weights were then applied to each metric and then summed to create the overall Best Places For First Time Home Buyers Score for each city. The final scores are sorted to produce the final rankings.

Other metrics considered without weight: