First-Time Homebuyers Grab Bargains in Midwest

Also, first-time buyers made up an astonishing half of all home buyers last year

First-time home buyers came out in droves in 2023 and most of them had their eyes on Midwest markets, according to a new report from Zillow.

That’s because starter homes there are most affordable to most demographics, Zillow said.

First-time buyers made up an astonishing half of all home buyers last year, according to Zillow’s Consumer Housing Trends Report – the highest share in the report’s history, dating back to 2018.

Top 10 markets for first-time home buyers in 2024 were St. Louis, Detroit, Minneapolis, Indianapolis, Austin, Pittsburgh, San Antonio. Birmingham, Kansas City, and Baltimore. Austin, while not the most affordable housing market on this list, ranks first in the number of similar-age households living there with which a buyer can build a community, according to Zillow.

“Affording a home is a tough hill to climb, and it’s especially steep for those buying their first home,” Zillow Senior Economist Orphe Divounguy said. “Headwinds like mortgage rates, low inventory and rising rents are still strong, but easing.

Some current homebuyers in general have been held in check lately by the “rate lock” effect — occurring when homeowners are financially incentivized to keep their current home because of the low rate on their current mortgage.

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