St. Louis has been named as the top destination for Americans hunting for their first home.
The Missouri city is this year’s best market for first-time buyers – since tInheritance payments will go further and there will be greater availability of affordable housing.
Of the top ten markets mentioned in the new analysis of the home sales site ZillowHalf are in the Midwest, including Detroit, Minneapolis, Indianapolis and Kansas City.
According to Zillow, first-time buyers accounted for half of all homebuyers last year – the highest share since at least 2017.
High mortgage rates last year meant that many homeowners were incentivized to stay put due to the low interest rates on their current mortgage, leaving some potential repeat buyers on the sidelines.
St. Louis has been named as the top destination for Americans hunting for their first home
In addition to the Midwestern cities, Austin, Pittsburgh, San Antonio, Birmingham and Baltimore also made the list of the best markets for people looking to get on the real estate ladder.
Zillow ranked the top markets for first-time buyers in terms of rent affordability, the share of for-sale homes that an average household can easily afford, how fierce competition is expected to be for those affordable homes, and how many households of comparable age live there. the area.
The study looked at rental affordability as a way to assess how easy it would be for potential buyers to build up savings for a down payment.
Unlike some similar studies, Zillow did not look at area average salaries as a basis for the affordability of certain markets.
The two largest markets in Zillow’s rankings – St. Louis and Detroit – scored well in affordability, both in terms of rent and the number of affordable homes for sale.
Austin, meanwhile, while not the most affordable market on the list, ranks first in the number of similarly aged households living there that a buyer could build a community with.
Home prices in Austin soared during the pandemic as the sunny climate, expansive state parks and relative affordability attracted an influx of buyers.
The Texas city was seen as the epitome of the Sunbelt’s hot housing market, but home prices are now falling.
Detroit ranks second on Zillow’s list, scoring well for rent affordability and a range of affordable housing for sale
Minneapolis was ranked third by Zillow in its analysis of the best markets for first-time buyers this year
“Affording a home is a tough hill to climb, and it’s especially steep for those buying their first home,” said Orphe Divounguy, senior economist at Zillow.
‘Headwinds such as mortgage rates, low inventories and rising rents are still strong, but are easing.
“Affording a home is a tough hill to climb, and it’s especially steep for those buying their first home,” says Zillow Senior Economist Orphe Divounguy
“The increase in new listings this spring, both due to new construction and more homeowners choosing to sell, will give buyers more options and help smooth out price growth.
“The housing market is slowing just enough to give more first-time buyers the opportunity to jump on board,” he added.
First-time buyers should be aware of financial hurdles, including how their credit score can affect their loan options and costs, and how much they need to save for a down payment.
Although a typical down payment is typically 20 percent, Zillow points out that those who haven’t saved enough shouldn’t think that will stop them from purchasing their first home.
Different analysis The real estate market shows that almost half of buyers put down less than 20 percent last year.
While home sales and inventory rose in February, high mortgage rates and real estate prices mean many Americans still face affordability issues, according to the National Association of Realtors.
The average 30-year fixed mortgage is hovering around 6.82 percent, according to the latest data from government-backed lender Freddie Mac.
Last year, the housing market became worth a whopping $2 trillion, amid a historic shortage of homes for sale.
And in the past two years, the housing market has increased by $5.6 trillion, according to Redfin, pricing many Americans out of the market.
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