The Best Markets for First-Time Homebuyers in 2025 Revealed

by Keith Griffith

First time homebuyers posing in front of their new home; Harrisburg, PA; Baltimore, MD — Getty Images (4)

First-time homebuyers currently face one of the toughest housing markets in decades, but in the right cities they can still find glimmers of hope.

A new report from the Realtor.com® economic research team identifies the best markets for first-time homebuyers in 2025, based on local prices, incomes, amenities, and several other factors.

Harrisburg, PA, tops the rankings this year, thanks to its moderate home prices, strong economy, and solid outlook for future price growth. The top 10 list also includes locations in upstate New York, Florida, Arkansas, Michigan, and the mid-Atlantic.

“The places highlighted offer opportunities for first-timers in terms of the cost of housing, availability of homes for sale, and quality of the location,” says Realtor.com Chief Economist Danielle Hale. “Even in these high-opportunity areas, trade-offs likely need to be considered for buyers to get to the closing table. Choosing the best place will come down to what’s most important to each buyer and their family, and our list of places, and their qualities, is a good guide.”

Last year, the share of all successful homebuyers who were first-timers dropped to 24%, the lowest on record. Record home prices and stubbornly high mortgage rates make this market one of the most challenging for buyers since the early 1980s. First-timers, who are often earlier in their careers with lower income and less savings, face the additional hurdle of entering the market without any prior home equity to lean on.

However, in the markets identified in the new report, starter homes should be within easier reach, and could even be cheaper and more accessible than renting.

Why Harrisburg tops the list for first-time buyers

In Harrisburg, the median home price is just $140,000. Even at 7% interest rates, and with just 3.5% down, that works out to a monthly payment of less than $1,300, lower than the asking rent for many two-bedroom apartments in the area.

“Truthfully, it’s somewhat easier to buy a house than it is to rent an apartment in Harrisburg,” says Chris Timmons, owner of an independent real estate brokerage in the area. “If you’re renting an apartment with a property manager, you often need a higher credit score than you do to get an FHA mortgage, and you still need the first and last month’s rent to move in. So they’re looking at it like, ‘Why not buy?'”

Home prices are so low in Harrisburg in part because of the abundance of townhomes in the city proper. These row houses allow a first-time buyer to enter the market at an affordable price, while building equity that could be put toward a more expensive home in the suburbs later on.

“I try to coach first-time buyers and remind them that the average person moves every three to seven years,” says Timmons. “You might do that sooner or later, but this is more of a lily pad. It’s a stepping stone to build some equity, maybe save some money, hopefully make more money as your career progresses, and you’ll be able to upgrade toward the house that you really want.”

This three-bedroom townhouse in Harrisburg, PA, is listed at $120,000. The city’s row houses offer attractive prices for the first-time buyer.
Realtor.com

Harrisburg also benefits from a strong economy and low unemployment rate. Centrally located between Philadelphia, Pittsburgh, and Baltimore, the area hosts a number of logistics hub for companies such as Chewy and Amazon, ensuring a steady supply of warehouse jobs.

Hershey Foods is also headquartered on the outskirts of town, alongside the company’s family theme park Hersheypark, both major local employers. Penn State Hershey Medical Center, an academic medical center, is also a major source of jobs in the area.

The combination of strong incomes and lower home prices has led many younger homebuyers to Harrisburg to quickly turn their eyes toward second homes as investment properties, says Timmons.

“A lot of the younger people I’ve spoken to are looking at it not so much as buying a home, but an investment,” he says. “Their attitude seems to have shifted from the generations a little bit ago, where a house is a house, and they never quite looked at it as an investment.”

Other top cities for first-time homebuyers

The other highest-ranking cities for first-time buyers all combine the key factors of relative affordability, robust economies, good amenities, and a solid outlook for home price growth.

Rochester, NY, No. 2 on the list, features the lowest median home price in the top 10, at just $129,900. The city also features the lowest price-to-income ratio on the list, with the typical home priced at just 2.5 times median earnings.

As well, Rochester’s city government offers a Home Purchase Assistance Program, which provides grants of up to $6,000 for closing cost assistance to income-eligible first-time buyers.

Consequently, 22% of homeowners in Rochester are projected to be aged 25 to 34 this year, compared with the average share of just 14% across the places considered in the report.

The main factor keeping Rochester out of the No. 1 slot is its relatively low supply of homes on the market, making it harder for first-time buyers to find a home that fits their needs.

This year’s top 10 list also includes three locations in Florida: Villas, located outside Fort Myers; Lauderdale Lakes, a suburb of Fort Lauderdale; and Altamonte Springs, on the outskirts of Orlando. All three feature home prices well below the national median and are located in metro areas that are forecasted to see strong home price growth of 9% or more over the coming year.

Lansing, MI, is the only Midwest city in the top 10. Home to Michigan State University, Lansing also hosts a high-tech General Motors factory, which provides thousands of jobs.

In the South, North Little Rock, AR, ranks No. 7 on the list, with a median home price of $160,000. A twin city of Little Rock, North Little Rock shares in the economic and job opportunities of the state capital, but with significantly lower home prices.

Baltimore is the largest city on the list, with a population of 565,000 and a median home price of just $210,000.

Outlook for first-time buyers

Although conditions remain tough for first-time buyers in many markets, 2025 arrives with the onset of several buyer-friendly trends.

The supply of homes for sale recently hit a four-year high, easing a shortage that made finding the right home difficult.

“While home prices remain high and mortgage rates are forecasted to stay above 6% throughout 2025, the year is expected to see more inventory hit the market—a silver lining for shoppers who will see more or less choice depending on where they are,” says the economist Hale.

As well, the number of homes with price reductions has been rising, and home price growth has slowed, signaling a shift away from the feverish growth that followed the COVID-19 pandemic.

The new report scored 3,579 Census-Designated Places that are located within the 100 largest metropolitan areas in the country and chose the highest-ranking 10 that had a population of at least 5,000 and at least 500 active for-sale listings in the past 12 months. Here are the top 10 cities for first-time buyers in 2025: