These U.S. metro areas are among the best for first-time homebuyers

With mortgage rates and housing prices still stubbornly elevated, potential homebuyers are looking for ways save wherever they can.

The median sale price for a home in the first-quarter of 2025 was over $400,000, according to the Federal Reserve Bank of St. Louis. Mortgage rates, meanwhile, continue to hover around 7% — up from a record low of 2.65% in January 2021. Moody's decision to downgrade the U.S.' credit rating briefly pushed rates above the 7% threshold earlier this month.

While homebuyers cannot control median home prices and mortgage rates, their choice of city or town to buy in can play a defining role in how much they end up spending on a property. Certain locales will offer more affordable listings and a wider range of options to choose from — giving buyers something to think about as they decide where to make their next investment.

A recent study from SmartAsset ranks the best cities for first-time buyers — providing a cheat sheet of sorts for those on the hunt for a new home. The financial technology company looked at 180 U.S. cities and ranked their appeal for first-time buyers based on affordability, available housing inventory, demand and how much home prices are expected to shift in the area over the next year.

Here is a breakdown of the cities that will give first-time homebuyers the best bang for their buck.

McAllen, Texas, located on the state's southern tip, claimed the No. 1 spot on SmartAsset's list. A major selling point for the border city is that housing prices are forecast to change just 0.4% over the next year, meaning that buyers can rest assured the market won't fluctuate too wildly as they search for the right home.

The median sale price for homes in McAllen — $204,499 — is about four times as much as the median local income, giving buyers more moderate wiggle room when it comes to affordability.

When looking solely at affordability — the median sale price of a home relative to the median local income — Midwestern metro areas reign. Illinois cities Peoria and Decatur top the ranking in affordability, according to SmartAsset. Other locales house hunters may want to keep an eye on include Cedar Rapids, Iowa; Davenport, Iowa; Muncie, Indiana; Springfield, Illinois; and St. Joseph, Missouri, which are among the least expensive metro areas, according to the study.

While Midwestern cities ranked higher in affordability than others, only Lawton, Oklahoma, where homes have a median sale price of $150,007, made it into SmartAsset's top 10 cities for first-time homebuyers overall.

One of biggest issues plaguing the housing market is the limited supply of homes for sale While studies show that the inventory of available properties is rising in many markets, some metro areas are still suffering from shortages, which increases competition and prices for homebuyers.

If you're looking for more robust inventory, you may want to consider heading south. Cape Coral, Florida, offers the greatest number of homes for sale per capita, according to SmartAsset, followed by Port St. Lucie, Florida.

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