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The best and worst places for first-time homebuyers 2022

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In the COVID-fueled real estate boom, home prices continue hitting new highs. Soaring values are a windfall for homeowners but a headache for first-time homebuyers, who can be forgiven for feeling as though homeownership moves further out of reach by the week.

For frustrated home shoppers, moving to a cheaper housing market offers one solution to the affordability conundrum. Some metropolitan areas offer an enticing combination of affordable real estate, a robust job market and high marks for safety, public health and cultural amenities.

The 2022 Bankrate Best Metros for First-Time Homebuyers study crunched 11 data points for the nation’s 50 largest metro areas. We found that Pittsburgh ranks as the most attractive place for first-time buyers, followed by other inland cities that offer a combination of affordable homes, strong local economies and housing markets that aren’t too frothy.

At the opposite end of the scale, the least attractive region is the Los Angeles metro area. Eye-watering prices in California overall give first-time buyers pause: Golden State metro areas accounted for three of the bottom five on our list, and five of the bottom 10. No California metro area ranked higher than 39th.

Best markets for first-time homebuyers: The top five markets image

Best metro areas for first-time buyers in 2022

Bankrate ranked metro areas across five broad categories: housing prices in relation to local wages, the tightness of the local housing market, crime rates, the employment picture and health and wellness. Based on that scoring, the top areas are:

  1. Pittsburgh: This metro area scored near the top in affordability, tightness of the housing market and safety. The Pittsburgh area was a laggard in just one area: Its employment score was dragged down by a comparatively high unemployment rate. However, most 25- to 44-year-olds in the metro area have plenty of income to qualify for a mortgage.
  2. Minneapolis: The Twin Cities region placed sixth in the labor market category, thanks to a low unemployment rate. While it didn’t dominate in any other category, the metro area performed well, posting top 15 finishes in wellness and culture and safety.
  3. Cincinnati: This metro area did well in affordability, placing fourth, and in the safety category, landing seventh overall.
  4. Kansas City: The Kansas City metro area ranked No. 1 in market tightness, or lack thereof. In this category, Bankrate graded metro areas by how many homes were for sale compared to a year ago, and how quickly those homes sell. In an intense seller’s market nationwide, Kansas City stood out as the least insanely skewed market.
  5. Buffalo: This metro area placed in the top 10 in affordability and housing market tightness.


Pittsburgh’s housing costs: ‘Very attractive’

The median home price in the Pittsburgh area in the first quarter of 2022 was just $169,000, according to ATTOM Data Solutions. That was the lowest among the 50 largest metro areas — and a fraction of the median prices of $1.4 million in Silicon Valley, $1.1 million in San Francisco and $860,000 in Los Angeles.

Some Californians are taking note of the price gap and shopping for homes in the Pittsburgh metro area, says Jim Jarrett, president of the Realtors Association of Metropolitan Pittsburgh and an associate broker at Berkshire Hathaway Home Services The Preferred Realty.

“I’ve been showing $750,000, $800,000 homes to people from California,” Jarrett says. “They’re like, ‘This would be $3.5 million where we come from.’”

Jarrett’s own son moved back to Pittsburgh last year, relocating from Manhattan. His son marvels that his combined payments on a roomy house and a new car amount to less than what he was paying to rent a one-bedroom place in New York City.

“The cost of living here has always been very attractive,” Jarrett says.

It’s not as if Pittsburgh is a backwater, either. The city boasts large universities, museums and professional sports teams. With a population of 2.3 million, the metro area is the nation’s 26th largest. Incomes also are in the middle of the pack — the median income for households headed by 25- to 44-year-olds is nearly $76,000, according to the U.S. Census Bureau. That’s plenty to afford a home. (Cleveland and Detroit have similar home prices, but in contrast to Pittsburgh, typical residents in prime homebuying years there make less than $70,000 a year.)

Pittsburgh-area native Dan Hill bought his first home, a four-bedroom house, last year. He paid just $185,000, but it’s hardly a fixer-upper. Hill says his place boasts a new kitchen, a roof of recent vintage and a freshly replaced heating and air conditioning system.

Hill works in information security, a position he says affords him the best of both worlds: He can stay in his reasonably priced hometown while collecting a higher-than-average paycheck.

“I can live in a really affordable area but get paid on a national salary scale,” he says.

Worst metro areas for first-time buyers in 2022

At the bottom of the ranking are a group of five metro areas with steep home prices and tight housing markets:

  1. San Jose: First, the good news for Silicon Valley workers: The San Jose metro area boasts the nation’s highest wages. Most households headed by 25- to 44-year-olds make more than $150,000 a year. Alas, that money doesn’t go very far in the nation’s most expensive housing market.
  2. Riverside: California homebuyers who are willing to move inland can get a house for hundreds of thousands of dollars less than they’d spend in LA or San Diego. One tradeoff is long commute times, which pulled Riverside down in our ranking. Lower incomes compared to coastal Southern California also make affordability a challenge.
  3. Seattle: The hometown area of Amazon and Microsoft echoes the challenges of Silicon Valley. Households headed by young adults have robust incomes, but home prices are so high that it’s still difficult to afford real estate. The housing market is also low on inventory, further squeezing first-time buyers.
  4. Las Vegas: Vegas used to be an affordable alternative to California, but rising home prices and a hot market have made Sin City less attractive to first-time buyers. The Las Vegas metro area also was dragged down by a lingering employment hangover from the pandemic — the metro area still has a comparatively high unemployment rate.
  5. Los Angeles: LA is the nation’s second-largest metro area, but it has a hard-earned reputation for both high housing prices and low incomes. Los Angeles households headed by 25- to 44-year-olds have a median income of $80,643, according to the Census Bureau — barely more than in Pittsburgh. LA’s only stellar score came in the wellness and culture category, but that wasn’t enough to lift it from last place among the top 50 metro areas.


Where all 50 metro areas rank

MSA Affordability rank Wellness rank Job Market rank Market Tightness rank Safety score Overall rank
Atlanta-Sandy Springs-Roswell, GA 23 27 26 19 23 23
Austin-Round Rock, TX 43 23 11 27 18 31
Baltimore-Columbia-Towson, MD 9 12 40 13 39 21
Birmingham-Hoover, AL 6 47 2 17 49 16
Boston-Cambridge-Newton, MA-NH 39 4 27 45 2 29
Buffalo-Cheektowaga-Niagara Falls, NY 7 38 30 7 13 5
Charlotte-Concord-Gastonia, NC-SC 23 34 28 39 37 40
Chicago-Naperville-Elgin, IL-IN-WI 15 15 49 29 25 28
Cincinnati, OH-KY-IN 4 40 21 13 7 3
Cleveland-Elyria, OH 10 28 42 3 14 7
Columbus, OH 18 44 14 28 15 14
Dallas-Fort Worth-Arlington, TX 34 35 28 38 18 36
Denver-Aurora-Lakewood, CO 37 8 34 43 34 45
Detroit-Warren-Dearborn, MI 3 45 43 10 21 13
Hartford-West Hartford-East Hartford, CT 10 19 31 39 7 9
Houston-The Woodlands-Sugar Land, TX 28 42 45 16 44 44
Indianapolis-Carmel-Anderson, IN 13 37 5 23 47 15
Jacksonville, FL 27 43 8 24 34 30
Kansas City, MO-KS 12 26 18 1 27 4
Las Vegas-Henderson-Paradise, NV 38 32 41 37 39 49
Los Angeles-Long Beach-Anaheim, CA 49 3 48 39 30 50
Louisville-Jefferson County, KY-IN 5 33 31 19 39 19
Memphis, TN-MS-AR 19 49 33 6 50 38
Miami-Fort Lauderdale-West Palm Beach, FL 41 14 16 32 32 32
Milwaukee-Waukesha-West Allis, WI 22 17 23 3 28 10
Minneapolis-St. Paul-Bloomington, MN-WI 14 13 6 26 12 2
Nashville-Davidson-Murfreesboro-Franklin, TN 26 22 7 48 42 37
New Orleans-Metairie, LA 21 19 39 18 48 34
New York-Newark-Jersey City, NY-NJ-PA 45 2 50 3 6 27
Oklahoma City, OK 8 46 3 22 43 12
Orlando-Kissimmee-Sanford, FL 36 36 19 39 28 42
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 16 16 46 8 16 11
Phoenix-Mesa-Scottsdale, AZ 31 38 4 12 32 24
Pittsburgh, PA 1 31 47 2 3 1
Portland-Vancouver-Hillsboro, OR-WA 39 10 35 24 25 35
Providence-Warwick, RI-MA 35 25 23 34 5 22
Raleigh, NC 23 19 15 50 1 18
Richmond, VA 17 18 12 36 9 6
Riverside-San Bernardino-Ontario, CA 42 48 44 13 24 47
Sacramento-Roseville-Arden-Arcade, CA 44 23 36 21 17 39
Salt Lake City, UT 32 5 1 29 38 20
San Antonio-New Braunfels, TX 30 50 20 9 45 32
San Diego-Carlsbad, CA 47 9 25 44 11 41
San Francisco-Oakland-Hayward, CA 48 1 13 32 47 43
San Jose-Sunnyvale-Santa Clara, CA 50 11 17 49 20 46
Seattle-Tacoma-Bellevue, WA 46 5 22 45 34 48
St. Louis, MO-IL 2 30 37 10 30 8
Tampa-St. Petersburg-Clearwater, FL 33 40 9 35 9 25
Virginia Beach-Norfolk-Newport News, VA-NC 20 28 10 47 21 26
Washington-Arlington-Alexandria, DC-VA-MD-WV 28 7 38 31 3 17

Methodology

The 2022 Bankrate Best Metros for First-Time Homebuyers study was compiled using data from a variety of sources, including the U.S. Census Bureau, the U.S. Labor Department and the FBI. A breakdown of each category:

  • Affordability: In this category, we calculated the typical income needed to qualify for a mortgage in each metro area, based on each area’s median home price in the first quarter of 2022 as reported by ATTOM Data Solutions, a 10 percent down payment, a 5 percent mortgage rate on a 30-year loan and a mortgage debt-to-income ratio of 25 percent. We then compared that number to the Census Bureau’s latest estimate of median income for households headed by 25- to 44-year-olds in each metro area. We also calculated the homeownership rate for 25- to 44-year-olds in each metro area.
  • Job market: We ranked each metro area based on its March 2022 unemployment rate as reported by the U.S. Labor Department. The index also factored in each metro area’s average commute time, per Census data.
  • Housing market tightness: For this category, Bankrate used Realtor.com’s average days on market for homes for sale for March 2022, and the year-over-year change in housing inventory through March 2022.
  • Safety: This category was based on the rates of violent crime and property crime for each metro area as reported by the FBI. Bankrate’s index relied on the FBI’s most recent crime data, either 2018 or 2019.
  • Wellness and culture: For the wellness part of this category, Bankrate used Sharecare’s Community Well-Being Index for 2020. The report ranks metro areas on access to healthcare, food and community services, including libraries and houses of worship. The culture ranking is based on the number of arts and entertainment establishments and cultural institutions per capita, based on Bankrate’s analysis of Census data.
Written by
Jeff Ostrowski
Senior mortgage reporter
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he wrote about real estate and the economy for the Palm Beach Post and the South Florida Business Journal.
Edited by
Senior real estate editor