The Best and Worst Cities for First-Time Homebuyers in 2025: A Comprehensive Guide
The Best and Worst Cities for First-Time Homebuyers in 2025
As the housing market continues to shift, first-time homebuyers face an uphill battle in securing their dream homes. A recent analysis by WalletHub has shed light on the best and worst cities across the United States for those looking to make their first purchase.
Florida Dominates the Top Rankings
According to WalletHub’s comprehensive study of 300 cities, Florida emerges as a haven for first-time buyers, with six of the top ten cities located in the Sunshine State. Topping the list is Palm Bay, where the median home-sale price stands at a manageable $327,000, coupled with a median household income of $67,521. Following closely are Tampa, Orlando, and Cape Coral, all offering affordable housing options and favorable living conditions.
Chip Lupo, a WalletHub analyst, emphasized the importance of affordability and quality of life in these rankings. “The best cities for first-time homebuyers not only offer reasonable housing prices but also provide a range of choices, low crime rates, and good schools,” he noted.
The Struggles of California Buyers
In stark contrast, California cities dominate the bottom of the list, with Berkeley ranked as the worst city for first-time homebuyers. The median home price in Berkeley is a staggering $1,350,000, making it nearly impossible for many to enter the market. Other cities like San Francisco, Los Angeles, and Santa Monica also feature prominently among the least favorable locations, characterized by high housing costs and low affordability.
Key Findings from the Study
The WalletHub analysis evaluated cities based on 22 metrics, including housing costs, real estate market conditions, and quality of life factors such as crime rates and school quality. The findings reveal a troubling trend: the market share of first-time homebuyers has plummeted from 32% in 2023 to just 24% in 2024, the lowest since records began in 1981. Additionally, the median age of first-time buyers has risen to 38, indicating that many are waiting longer to make their first purchase.
The Best and Worst Cities for First-Time Homebuyers
Top 10 Cities:
- Palm Bay, Florida
- Boise, Idaho
- Tampa, Florida
- Surprise, Arizona
- Huntsville, Alabama
- Gilbert, Arizona
- Cape Coral, Florida
- Orlando, Florida
- Lakeland, Florida
- Sunrise, Florida
Bottom 10 Cities:
- Berkeley, California
- Santa Monica, California
- Oakland, California
- San Francisco, California
- Santa Barbara, California
- Los Angeles, California
- Costa Mesa, California
- Anchorage, Alaska
- New Orleans, Louisiana
- San Mateo, California
Conclusion
As first-time homebuyers navigate a challenging landscape, understanding the best and worst cities for purchasing a home can provide valuable insights. With Florida leading the way, prospective buyers may want to consider relocating to sunnier shores, while those in California may need to rethink their strategies or wait for more favorable market conditions.