Realtor.com identifies the top housing markets for first-time homebuyers in 2025, highlighting a shift toward more affordable Southern cities.
2024 was a challenging year for prospective first-time homebuyers, marked by record-high home prices, elevated interest rates, and soaring insurance costs, exacerbating America's housing affordability crisis. The share of first-time homebuyers reached a historic low last year, comprising only 24% of purchases. However, demand remains strong, leading Realtor.com to release its annual report identifying cities offering the best opportunities for aspiring homeowners.
There has been a notable shift from previous years' trends.\Realtor.com senior economist Joel Berner stated to FOX Business, 'The more affordable markets, especially for first-time homebuyers, are starting to skew more Southern.' In last year's rankings, the digital real estate group observed more Northeastern and Midwestern markets, while this year, three of the top 10 are located in Florida alone. \Berner explained, 'The Sun Belt was a major focus point for buyers during the overheated post-pandemic market, but as these Southern markets cool slightly, affordability is improving due to flat-to-falling listing prices.' \Here are the top markets for first-time homebuyers in 2025, based on the combined factors of housing costs, home availability, and location quality:\While these locations might be the most favorable for purchasing a first home this year, Realtor.com acknowledges that the current affordability crisis in the U.S. is not anticipated to dissipate anytime soon. Berner told FOX Business, 'There will absolutely be affordability challenges in 2025.' He added, 'Our most optimistic outlook for 2025 is to see an increase in inventory, particularly of smaller and more affordable homes, as builders respond to the demand for affordable housing and homeowners currently residing in affordable homes opt to upgrade.
FIRST-TIME HOMEBUYERS AFFORDABILITY SOUTHERN CITIES HOUSING MARKET INVENTORY
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