Florida dominates list of best cities for first-time homebuyers while California sinks to the bottom
Florida seems to fare better than California when balancing housing affordability with quality of life to attract first-time buyers, a new WalletHub study found.
While the sun shines for first-time homebuyers in Florida, the real estate market has lost its shine in the "Golden" State of California.
A new study from WalletHub released Tuesday ranked the best and worst cities for first-time homebuyers in 2024. It measured affordability, real estate and quality of life markers in 300 U.S. locations using 22 key metrics, from home prices to taxes and crime rates.
Six out of the top 10 best cities for first-time buyers are in Florida, including Palm Bay, Cape Coral, Port St. Lucie, Tampa, Orlando and Lakeland.
However, eight out of 10 of the bottom 10 worst cities for aspiring homeowners can be found in California. Those markets include Costa Mesa, Glendale, Los Angeles, San Francisco, Oakland, Santa Barbara, Santa Monica and Berkeley.
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"The most important takeaway from this study for aspiring homeowners is the necessity of balancing affordability with quality of life when purchasing a home," WalletHub analyst Cassandra Happe told Fox News Digital.
"With rising prices and interest rates making homeownership more challenging, it's crucial for first-time buyers to be well-informed about market conditions, mortgage eligibility, and the real cost of living in different areas," she added. "Our research highlights that the best cities for first-time homebuyers are not only affordable but also offer a range of housing options, low crime rates, and good schools. Understanding these factors can help buyers make more informed decisions and find a home that meets both their needs and their budget."
When looking deeper at the three main metrics, Detroit, Michigan reportedly has the most affordable housing, which is 10.4 times cheaper than Santa Barbara, where affordability is the worst.
Honolulu, Hawaii, has the lowest real estate tax rate, which is 11 times lower than in the highest tax market of Waterbury, Connecticut, WalletHub pointed out.
The three best cities for first-time homebuyers – Florida’s Palm Bay, Cape Coral and Port St. Lucie – all share high active home listings per capita, low crime and highly-rated school systems.
WalletHub’s analyst noted that the trends suggest significant differences in housing market conditions between Florida and California, especially.
"Florida cities generally offer better affordability, more attractive real estate markets and a higher quality of life, making them more favorable for first-time homebuyers. In contrast, California cities face challenges such as higher living costs, real estate taxes, and potentially less favorable quality of life metrics, making homeownership less accessible for first-time buyers in the state," Happe explained.
"When it comes to quality of life, Florida tends to provide better options for families and new buyers, while California's quality of life rankings are mixed, facing issues such as a high cost of living and urban challenges in many cities," she expanded. "Overall, Florida presents more accessible housing options and a favorable real estate climate compared to California's expensive and competitive market."
National Association of Realtors data has reported that first-time homebuyers made up only 32% of the U.S. market last year, compared to the historical average of 40%.
And even if a flock of new families and residents relocate to these hot markets in Florida, Happe cooled any concerns of oversaturation or tight buying competition.
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"While increased interest in top-ranked cities can indeed lead to shifts in market dynamics, our rankings are based on a comprehensive analysis of various factors, including affordability, access to mortgage loans and overall housing market conditions," Happe said.
"As long as buyers remain aware of changing market conditions and consider important factors, they can still find suitable opportunities in these cities, even as dynamics evolve over time."