Here Are The Best And Worst Cities For First-Time Home Buyers And One State Dominates The Worst List

best cities for buying a first home 2021

Check this list of the best cities for buying a first home if you’re looking to make a real estate purchase in the next 12 months.


Buying a house for the first time is an important moment for millions of Americans every year.

In 2020, first-time buyers made up 40% of all U.S. single-family home purchases, up 14% over the previous year, thanks to dramatically low-interest rates.

With interest rates still relatively low, it’s more than likely that millions more first-time buyers will sign the papers on new homes in 2021.

RELATED: How To Build Credit To Buy A Home

With those potential buyers in mind, the personal-finance website WalletHub recently released a report on 2021’s Best & Worst Cities for First-Time Home Buyers.

From WalletHub:

“For people willing and able to invest in a house this year, the search for a first home requires careful consideration of a number of factors. Buyers must balance what they want and need with what they can afford. Often, people begin searching for their dream homes without a realistic idea of market prices, interest rates or even their eligibility to get a mortgage.”

To determine the most favorable housing markets for first-time buyers, WalletHub took the pulse of real estate in 300 cities of varying sizes using 22 key metrics.

The data set ranges from housing affordability to real-estate tax rate to property-crime rate.

Here’s their assessment of the best and worst cities for people buying a home for the first time.

Best Cities for First-Time Home Buyers

1. Chesapeake, VA
2. Gilbert, AZ
3. Lincoln, NE
4. Cape Coral, FL
5. Boise, ID
6. Hampton, VA
7. Peoria, AZ
8. Virginia Beach, VA
9. Norfolk, VA
10. Surprise, AZ

Worst Cities For First-Time Homebuyers

291. Boston, MA
292. Burbank, CA
293. Glendale, CA
294. Santa Barbara, CA
295. San Mateo, CA
296. Los Angeles, CA
297. Santa Monica, CA
298. San Francisco, CA
299. Oakland, CA
300. Berkeley, CA

Best Cities vs. Worst Cities For First-Time Homebuyers

  • Toledo, Ohio, has the most affordable housing (median house price divided by median annual household income), with a ratio of 1.06, which is 19.1 times cheaper than in Santa Barbara, California, the city with the least affordable housing, with a ratio of 20.29.
  • Honolulu has the lowest real-estate tax rate, 0.29 percent, which is 12.9 times lower than in Waterbury, Connecticut, the city with the highest at 3.74 percent.
  • Rochester, New York, has the highest rent-to-price ratio, 15.88 percent, which is 4.7 times higher than in Sunnyvale, California, the city with the lowest at 3.38 percent.
  • New Orleans has the lowest total home-energy cost per month, $97.27, which is 4.8 times lower than in Honolulu, the city with the highest at $470.38.

So what should first-time home buyers consider when choosing a neighborhood?

“There are clear factors to consider in affordability, safety, commute to work, and neighborhood amenities such as parks and walking trails, but, if there is one key consideration that first-time homeowners should keep at the forefront of their mind, it is the exit strategy,” explains Patricia A Ryan Associate Professor at Colorado State University.

“The homeowners are first-time buyers and will likely wish to step up in a few years. Will the home and neighborhood be attractive to future first or second-time homebuyers? I recommend that first-time homebuyers make a list of the musts and wants for them as well as their perceived musts and wants for other buyers.”

View the full report and see where your prospective city ranks by clicking here.

To read more great studies conducted by WalletHub, check out the best states to find summer employment, the worst states for Millennials, and the best cities to start a new career in 2021.

Chris Illuminati

Chris Illuminati is the author of five books and has written about personal finance, wealth, debt management, and entrepreneurship for numerous outlets including Wise Bread, Grow or Die, and Bankrate.