As home values continue to increase, it becomes increasingly difficult for first-time buyers to break into a market. Fortunately, first-time homebuyers can find a healthy balance of affordable home prices, low competition and strong growth prospects in Houston, according to a  Zillow’s 2018 Best Markets for First-Time Buyers Analysis.

 The analysis ranked the 35 largest U.S. housing markets based on where first-time buyers had the best chance to find an affordable home with the least amount of competition and a strong home value appreciation. To find the best markets for first-time buyers, they weighed five metrics: median home values, home value forecast, inventory-to-household ratio, Share of listings with price cuts and the local buy-rent =Breakeven Horizon. 

Houston was marked no. 3 with an inventory of 26,275 homes in the market and a median home value of $186,800. The breakeven horizon —the point at which it becomes financially advantageous to buy rather than rent — was 1 year and 10 months.

Currently, the market saw a decrease of 17.1 percent for inventory of the least expensive homes annually in January 2017. This put nearly a quarter of home sales above the listed price and created a stronger disadvantage for first-time buyers in a low-inventory market. 

Houston’s market requires a smaller down payment and saw a 16.7 percent share of listings with price cuts, which can be assumed as an easier transaction for first-time buyers and a less competitive market.

Top Ten Best Markets for First-Time Homebuyers

1. Tampa, FL
2. Indianapolis, IN
3. Houston, TX
4. Orlando, FL
5. San Antonio, TX
6. Saint Louis, MO
7. Philadelphia, PA
8. Atlanta, GA
9. Las Vegas, NV
10. Dallas, TX

Getting ready to buy your first home? View affordable new homes in Richmond, Texas!