The Best Cities for First-Time Homebuyers

When it comes to making it easy for first-time homebuyers to put down roots, some cities make it easier than others. Lending Tree recently completed a study of 50 major U.S. cities to determine which were the friendliest to first-time homebuyers. Lending Tree used a variety of data points to establish their rankings.

We’re looking at the top 10 cities to show you exactly what makes them so appealing to first-time homebuyers. We’ve combined the average down payment amount from the Lending Tree report with data on the median home price for owner-occupied homes provided by the U.S. Census Bureau to give you a sense of what your mortgage costs would be in each of these cities. 

In addition to federal homebuyer assistance programs, we’ve looked to see if there are any local homebuyer assistance programs for each of these cities. Add that in with a dash of local flavor, and you’ll see why these cities were named the top 10 best cities for first-time homebuyers.

10. Kansas City, Missouri

A view of Kansas City's skyline from Penn Valley Park.
A view of Kansas City's skyline from Penn Valley Park. 
Median Home Price: $139,900
Average Down Payment: $37,375 

Kansas City, Missouri is the perfect place to put down roots for Midwesterners who want a cozy yet bustling metropolis. The city, which straddles two states—and two rivers for that matter—has a vibrant arts community. The Nelson-Atkins Museum of Art, Kemper Museum of Contemporary Art, and the Kauffman Center for the Performing Arts are all worth a visit. 

If you were to pay the average down payment for a home in Kansas City at the median home price, your monthly mortgage costs would be somewhere around $825/month.

To sweeten the deal, Kansas City has several home repair programs for low- to moderate-income households.

9. Detroit, Michigan

The Detroit People Mover monorail moving through downtown Detroit.
The Detroit People Mover monorail moving through downtown Detroit. Photo by ehrlif / Shutterstock.com 
Median Home Price: $42,800
Average Down Payment: $38,261

Detroit, also known as Motor City, is going through an artistic renaissance. The city was hit hard by the 2008 recession but has since become a haven for creatives, drawn in part by the affordable real estate.

If you put down the average deposit ($38,261) for the median home price ($42,800), your monthly mortgage costs would run somewhere around $280 each month. If you put down 20% of the median home price, or around $8,100, your monthly home costs would still only be around $440. 

To entice buyers to the area, Michigan has three homebuyer assistant programs. With an MI Home Loan, low-to-moderate-income, first-time homebuyers can get lower interest rates. If you’re a homebuyer looking for a lower down payment, check out the MI Home Loan Flex program. And finally, the Mortgage Credit Certificate offers eligible first-time homebuyers the opportunity to offset their tax bills with a credit up to 20% of their annual mortgage interest. 

8. Louisville, Kentucky

The Louisville Skyline
Photo by Thomas Kelley / Shutterstock.com
Median Home Price: $146,900
Average Down Payment: $35,614

Louisville, Kentucky is double dipping in “great cities” for homebuyers. It also ranked in our list of cities that make it easy to save for a down payment. Louisville is wonderful for bourbon enthusiasts, baseball fans, and city dwellers who want their metropolis to come with a healthy dose of home-grown charm. 

If you were to put down the average down payment ($35,614) on a home with the median home price in Louisville ($146,900), your monthly mortgage costs would total an estimated $872 each month.

Homeowners who make an income at or below 80% of the median income for the area may be eligible for the Louisville Down Payment Assistance Program. Applications can be competitive though; the program has currently exhausted all funding but will be taking new applications in July 2019.

7. Columbus, Ohio

The Main Street Bridge in downtown Columbus Ohio.
The Main Street Bridge in downtown Columbus Ohio. 
Median Home Price: $136,500
Average Down Payment: $34,400 

Columbus is another double dipper, also showing up on our list of cities that make it easy to save for a down payment. Residents love the burgeoning local food scene, the variety of outdoor activities in the summer months, and the world-class Columbus Zoo

If you pay the average down payment ($34,400) for the median home price ($136,500), your monthly mortgage payments would be around $820 each month in Columbus.

In Ohio, first-time homebuyers (and repeat homebuyers) may be eligible for down payment assistance of 2.5% or 5% of the home’s purchase price through Ohio Your Choice! Down Payment Assistance Program. Ohio Heroes offers discounted mortgage rates to individuals who work in helping professions like nurses, teachers (pre-K through 12), active serving military, veterans, paid and volunteer firefighters, etc. 

Ohio Grants for Grads also offers recent graduates an incentive to stay in Ohio. Students (bachelors, masters, or doctoral degree) who have graduated within the past two years may qualify for discounted mortgage rates that can be paired with 2.5% or 5% down payment assistance.

6. Indianapolis, Indianna

The Soldiers and Sailors Monument in Downtown Indianapolis.
The Soldiers and Sailors Monument in downtown Indianapolis. 
Median Home Price: $123,500
Average Down Payment: $38,114

Indianapolis is another place that tops the list of cities where it’s easy to save for a down payment, and it’s just as good for first-time homebuyers. Residents can claim the title of playing host to the Indie 500, and Indianapolis has an absolutely stunning public library (the Central Library) that would make even New York jealous. 

Housing here is pretty affordable. If you put down the average down payment ($38,114) on the median home price, your total estimated monthly mortgage costs would be around $731.

In addition to federal programs, first-time buyers can apply for a variety of programs. Indiana’s Affordable Home program, for example, can help you score a low down payment and low interest rates. To qualify for the program, you need to prove you have not owned a primary residence in the last three years, and you need a credit score of 660 or higher. 

5. Birmingham, Alabama

Downtown Birmingham.

Median Home Price: $86,900
Average Down Payment: $33,747

Buyers looking for a decidedly southern feel to their city will be enticed by how welcoming Birmingham is to first-time homebuyers. Once you settle down in Alabama’s largest city, you won’t have to travel far to feel like you’re somewhere else. The city is home to a replica of the Statue of Liberty, so yeah, it has pretty much everything you need.

What about affordability? If you put down the average down payment ($33,747) on a home with the median price for Birmingham ($86,900), your monthly costs would be somewhere around $550.

Also, buyers can qualify for Alabama’s first-time homebuyer programs. Alabama Step Up helps low- to moderate-income buyers with 3% down payment assistance. To qualify, your income must be under $97,300. Alabama Mortgage Credit Certificates offer tax credits on your mortgage interest for conventional, FHA, VA, and USDA fixed-rate mortgages. 

4. Cincinnati, Ohio

The John A. Roebling Suspension Bridge leading away from  downtown Cincinnati.
The John A. Roebling Suspension Bridge leading away from downtown Cincinnati. 
Median Home Price: $124,200
Average Down Payment: $36,042

What’s better than finding a job? Finding a job you like. Cincinnati ranked 8th on Fortune’s 2017 list of cities where you’ll find a job you like. There are a number of places to immerse yourself in arts and culture in Cincinnati, including the Taft Theater and the Aranoff Center for the Arts.

If you put down the average down payment ($36,042) on the median home price ($124,200), your monthly mortgage would cost you around $744.

Like Columbus, you’ll have access to the Ohio homebuying assistance programs Ohio Your Choice! Down Payment Assistance Program, Ohio Heros, and Grants for Grads.

3. Oklahoma City, Oklahoma

The Bricktown Canal in Oklahoma City.
The Bricktown Canal east of downtown Oklahoma City. 
Median Home Price: $148,500
Average Down Payment: $30,234

Oklahoma is the final city on this list that also showed up on our list of the best cities to save for a down payment. Oklahoma City has made a name for itself as an inviting place for entrepreneurs, ranking number one in a 2017 CNBC survey of the best places to start a business. The city is also home to the largest Native American culture fest. The Red Earth Native American Festival showcases art, dance, clothing, and heritage. 

Buying a home here is pretty affordable. If you put down the average down payment ($30,234) on the median home price ($148,500), your mortgage costs would total somewhere around $907 each month. 

2. Co-Winner: Cleveland, Ohio

The Cleveland sign at Edgewater Park.
The Cleveland sign at Edgewater Park. Photo by f11photo/Shutterstock.com
Median home price: $67,600
Average down payment: $32,775 

Tied for the top spot on this list, Cleveland was dubbed one of the most fun cities in America by Thrillist. In recent years, the Cleveland lakefront has gone through a renaissance. Edgewater Beach transformed from septic lakefront to a 2,400-foot beach park. They’ve got some top-notch dining options too. The restaurants Lola Bistro and Greenhouse Tavern have both won James Beard Awards. With a culture boom happening in the city, there’s more to look forward to on the horizon.

If you purchased a home for the median home price ($67,600) using the average down payment ($32,775), your monthly mortgage payments would be an estimated $448. 

Like Columbus and Cincinnati, you can check out those sweet Ohio homebuying assistance programs Ohio Your Choice! Down Payment Assistance Program, Ohio Heros, and Grants for Grads. If you’ve forgotten the details already, you can check them out in the Columbus section.

1. Co-Winner: Pittsburgh, Pennsylvania

The Duquesne Incline and Pittsburgh Skyline.
The Duquesne Incline and Pittsburgh Skyline.
Median Home Price: $108,500
Average Down Payment: $34,049 

Tied with Cleaveland for the top spot on this list, Pittsburgh caters to a variety of interests. Sports enthusiast? You’ll be right at home joining the impressively invested Steelers fanbase. Home chefs will swoon over the options you can procure in The Strip District. Museum lover? Head to the Carnegie Museums, four well-appointed and well-curated collections that will have you drinking in the beauty of humanity.

What’s more, it’s a friendly city for homeowners. If you put down the average down payment in Pittsburgh ($34,049) towards the median home price ($108,500), your mortgage costs would be somewhere around $667 each month. 

To top it off, Pennsylvania has many homebuyer assistance programs. For the full rundown, you can check out the Pennsylvania Housing Finance Agency. A couple of highlights include the Program for Persons with Disabilities, in which people living with disabilities (or living with someone who is) may qualify for a no-interest loan to cover down payment and closing costs up to $15,000. Through the Employer Assisted Housing Initiative, participating employers offer homebuying assistance of up to $8,000 in the form of an interest-free, ten-year loan.

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