If you're a first-time homebuyer, you might want to consider moving to Texas.
Five Texas cities land among the top 15 places to buy your first home, according to a recent analysis by financial services company SmartAsset, which ranked 185 metro areas based on affordability, growth potential, competition and demographics to determine the best possible home investment for young buyers.
Of those ranked, the military town of Killeen, Texas, came out on top as the No. 1 place, as it's a growing city with home prices that are nearly half the national median.
The number of homes available in Killeen is higher than most other cities, which favors buyers, and it's a young city, with a higher-than-average percentage of residents under the age of 40.
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Texas has long been a migration hotspot in the U.S. The population grew 43% between 2002 and 2022, according to U.S. Census data. But despite this growth, home prices are slightly cheaper than the U.S. average, which makes for some of the most affordable homes in the country.
Here's a look at the top 15 cities for first-time homebuyers, along with each city's median home price.
- Killeen, Texas: $252,833
- Wichita Falls, Texas: $186,650
- McAllen, Texas: $210,833
- St. Joseph, Missouri: $156,500
- Cape Coral, Florida: $350,292
- Waco, Texas: $262,817
- Huntsville, Alabama: $294,550
- Brownsville, Texas: $236,500
- Green Bay, Wisconsin: $270,167
- Jackson, Tennessee: $196,667
- Appleton, Wisconsin: $267,250
- Jacksonville, North Carolina: $252,783
- Savannah, Georgia: $329,667
- Muncie, Indiana: $144,983
- Clarksville, Tennessee: $276,000
Why these cities are great for first-time homebuyers
Money Report
What makes these places great for first-time buyers? For starters, median home prices in all of these cities are much cheaper than the U.S. median price of $416,100, according to U.S. Census data.
Additionally, the median price of homes for most of the top 15 markets is about four times the median income of its residents. That's considerably less of a financial burden compared with expensive real estate markets like Los Angeles, where homes cost about 10 times the median income.
There's also less competition for homes in these markets, which favor new homebuyers who can't afford to get into bidding wars. Listings in the top 15 cities are on the market for an average of 20 days — nearly double the average of all metro areas in the study.
Despite the lack of competition for homes, these cities are still expected to grow by an average of 7.2% by July 2024. The national average is 5.4% for all markets in the study, based on Zillow's real estate market projections.
These top 15 cities also contain a relatively high concentration of residents ages 25 to 39, the most common ages for first-time buyers. The study assumes that most first-time homebuyers in this age bracket would prefer to live among their peers.
Notably, the best cities for first-time buyers tend to be smaller cities with populations close to 100,000. That makes sense, as housing costs and living expenses are typically more expensive in larger cities like New York or San Francisco.
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