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These Cities Are the Most and Least Affordable for First-Time Home Buyers: Report

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(Photo : Photo by ANDREW CABALLERO-REYNOLDS/AFP via Getty Images) A for sale sign in front of a home in Arlington, Virginia, on August 22, 2023. Sales of homes in the United States ticked down in July, according to industry data released on August 22, 2023, as elevated mortgage rates and limited housing supply held buyers back. The housing market in the world's biggest economy has been reeling as interest rates climbed, making home owners reluctant to put their properties up for sale -- having earlier locked in lower rates on their mortgages.

A new study has ranked the best and worst housing markets in the United States where homes are the most---and least---affordable for first-time buyers. 

The past several years have been difficult for first-time buyers as home prices grew dramatically and the low supply of homes failed to keep up with the demand. Last year, first-time buyers made up 26% of all home buyers in 2023, according to the National Association of Realtors. That is a 34% decrease from a year before and the lowest percentage of first-time buyers on record. 

While home prices did not grow in the first quarter of 2024, prices of houses across the U.S. remained very high for potential first-time buyers. Homes in some markets were listed at prices five times higher than the average income of first-time buyers. 

Here are the most and least affordable housing markets for potential first-time buyers, per NerdWallet's latest First-Time Home Buyer Affordability Report.

Most Affordable Areas for First-Time Buyers

Pittsburg

Pittsburg was the most affordable city for first-time buyers from January to March 2024. Homes in Pittsburg were listed at prices 2.8 times the average income of first-time buyers. That is despite prices in the city rising 11% from last year's fourth quarter. 

Detroit

Detroit comes as the second-most affordable city in the country, with home prices listed 2.9 times a first-time buyer's average annual income. 

Cleveland

During the first three months of 2024, the average home prices in Cleveland came in at 3.0 times the annual income of first-time buyers. It comes in third on NerdWallet's list of most affordable cities for first-time buyers.

Buffalo

Coming in fourth on NerdWallet's list is Buffalo, New York, where home prices are 3.2 times the annual income of potential first-time buyers. 

Baltimore

Baltimore is the last city on NerdWallet's top five most affordable cities in the U.S. for first-time buyers. Home prices in Baltimore average out to 3.4 times the income of first-time buyers.

Least Affordable Areas for First-Time Buyers

Los Angeles

At the other end of the spectrum, Los Angeles topped the list as the most expensive area for first-time buyers. Homes in the city are at least 12 times the annual income of first-timers. 

San Diego

San Diego follows Los Angeles as one of the most expensive cities for first-time buyers. Homes in San Diego are listed 9.3 times the income of first-time buyers. 

San Jose

Home prices in San Jose are 7.7 times the average annual income of first-time buyers, making it the third most expensive city in the country for first-timers.

New York City

Homes in New York City were listed at 7.1 times the average annual income of potential first-timers. 

Boston and Miami

Boston and Miami are tied as the fifth-most expensive cities for first-timers on NerdWallet's list. Home prices in each city were listed, on average, 7.0 times a first-time buyer's annual income.

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