By Celia Fernández —
CNBC
For many, becoming a first-time home buyer in the United States is increasingly complicated.
With high mortgage rates, many cannot afford to take that financial step and choose to continue renting, waiting for the market to improve.
Creditnews Research analyzed the 50 largest metropolitan areas in the United States to find the
best and worst housing markets
for first-time buyers.
Cities received their score based on the following criteria
1. Cost of mortgages
2. Market access
3. Bargaining power
4. Job growth
5. Quality of life
The analysis focused on the top 50 metropolitan areas based on population because typically first-home buyers are more likely to move for work and seek out big cities.
“Although there may be smaller cities that offer cheaper housing, larger metropolitan areas are less likely to offer the combination of employment opportunities, labor market flexibility and more housing supply,” the report notes.
Best metro area for first-time buyers: Pittsburgh
Pittsburgh, Pennsylvania is the best metropolitan area for first-time homebuyers because it offers the best affordability for a first home.
The median home sale price in Pittsburgh is $255,000, according to Realtor.com.
That price is $162,000 lower than the median U.S. home sale price ($417,000 in the fourth quarter of 2023), according to the Motley Fool.
Pittsburgh, Pennsylvania.joe daniel price / Getty Images
That Pennsylvania city also ranked second for sales price cuts, giving buyers more bargaining power.
The median home value in Pittsburgh is $216,662, up 4.8% from last year, according to Zillow.
Despite these high rankings, Pittsburgh's job market continues to grow.
It ranks 31st in job growth, according to Creditnews analysis.
The 10 Best Metro Areas for First-Time Buyers
1. Pittsburgh, Pennsylvania
2. Austin-Round Rock, Texas
3. San Antonio-New Braunfels, Texas
4. Birmingham-Hoover, Alabama
5. Jacksonville, Florida
6. New Orleans-Metairie, Louisiana
7. Miami-Fort Lauderdale-West Palm Beach, Florida
8. Dallas-Fort Worth-Arlington, Texas
9. Cleveland-Elyria, Ohio
10. Raleigh, North Carolina
The Austin-Round Rock metropolitan area is the second best place for first-time homebuyers in 2024.
The Texas city is growing in popularity, but ranked first for market access, with homes staying on the market much longer, according to Creditnews.
The analysis states that Austin is also one of the best cities for job growth and one of the most livable in the US.
Austin, Texas.Allan Baxter/Getty Images
The southern state has become a growing quarry for different industries, including technology and aerospace.
For the sixth time in eight years, according to U-Haul, Texas ranked as the No. 1 state for Americans to move to.
As of 2022, Texas leads the nation as home to the largest number of companies on that financial magazine's Fortune 500 list.
Worst metropolitan area for first-time buyers: San José
The San Jose-Sunnyvale-Santa Clara metropolitan area was ranked the worst for first-time buyers in 2024.
San Jose ranked at the bottom of the list due to its lack of mortgage affordability, with starting home prices starting at $965,068, according to Creditnews analysis.
San Jose, California. Walter Bibikow / Getty Images
The area is located an hour's drive south of San Francisco and stands out above all for its connection to Silicon Valley.
Large global technology companies such as eBay, PayPal and Zoom are headquartered in San José.
The 10 Worst Metro Areas for First-Time Buyers
1. San Jose, California
2. San Diego-Carlsbad, California
3. Los Angeles-Long Beach-Anaheim, California
4. Denver-Aurora-Lakewood, Colorado
5. Riverside-San Bernardino-Ontario, California
6. San Francisco-Oakland-Hayward, California
7. Provide-Warwick, Rhode Island
8. Sacramento-Roseville-Arden-Arcade, California
9. Portland-Vancouver-Hillsboro, Oregon
10. Salt Lake City, Utah
The second worst metro area for first-time homebuyers is San Diego-Carlsbad, California.
San Diego, California.David Toussaint/Getty Images
}The area has a median home price of $651,891 and lacks mortgage affordability.
San Diego ranks 26th in livability, but is worse than Los Angeles in market access and bargaining power.
Given its proximity to Mexico, San Diego is home to one of the busiest border crossings.
After Los Angeles, it is the second most populated city in California.