First-time homebuyers faced challenges in 2024 with elevated mortgage rates and rising home prices. However, 2025 may offer some relief, at least in certain housing markets.
In its analysis of current housing trends, Realtor.com finds the most promising opportunities for first-time buyers are in Mid-Atlantic and some Florida housing markets.
According to the analysis, Harrisburg, Pa., will be the best market for first-time buyers, followed by Rochester, N.Y., and several Florida locales, including Villas, Lauderdale Lakes, and Altamonte Springs. These markets are recognized for their affordability, strong local economies, and appealing amenities.
The report found that 2024 saw a record low in first-time homebuyer activity, with only 24% of successful buyers falling into this category. Despite high home prices and mortgage rates projected to remain above 6% throughout 2025, an increase in market inventory offers a glimmer of hope for prospective buyers.
"The places highlighted offer opportunities for first-timers in terms of the cost of housing, availability of homes for sale, and quality of the location,” said Danielle Hale, Realtor.com’s chief economist.
Expect trade-offs
“Even in these high-opportunity areas, tradeoffs likely need to be considered for buyers to get to the closing table. Choosing the best place will come down to what's most important to each buyer and their family, and our list of places, and their qualities, is a good guide."
Affordability remains a key factor for first-time buyers, with all top 10 markets featuring median listing prices significantly below the national median of $416,880. For instance, Villas, Florida, the most expensive market on the list, has a median price of $236,950, nearly $180,000 less than the national figure.
These affordable prices align with the general rule that housing costs should not exceed 30% of a buyer's income, a criterion met by all highlighted markets.
Strong economies
Economic strength is another crucial consideration, as maintaining mortgage payments requires stable employment. The top-ranked markets boast lower-than-average unemployment rates and proximity to major job hubs.
Harrisburg and North Little Rock, Ark., are near state capitals, while Rochester, Lansing, and Baltimore benefit from nearby academic institutions and hospitals. Wilmington, Del., offers commuting access to Philadelphia, enhancing its appeal.
Beyond financial and economic factors, the report underscores the lifestyle benefits these markets offer. Each location scores well for family-friendliness, with amenities catering to diverse needs, from daycares for young families to nightlife for singles and parents. However, some areas, like Lansing and North Little Rock, may lack in dining and shopping options but excel in family-oriented services.
Finally, the potential return on investment is a significant consideration for first-time buyers. All top 10 markets are expected to experience price growth exceeding the national forecast of 3.7%, with Florida's Altamonte Springs, Villas, and Lauderdale Lakes projected to see the most substantial gains.