First-time homebuyer? These markets are your best bet in 2025

By all accounts, 2024 was a tough year for people in the market to buy their first home at housing prices record highshigh interest rates and rising insurance costs are worsening America’s housing affordability crisis.

In fact, the share of first-time home buyers hit an all-time low last year, making up just 24% of purchases.

The market has been rough for potential homebuyers, especially for first-time homebuyers, and a new study reveals the best places to buy in 2025. (Justin Sullivan/Getty Images/Getty Images)

However, demand is strong, so for those still looking to buy, Realtor.com recently released its annual report where cities offer the brightest opportunities for those ready to make the leap into home ownership, and there have been shifts over the past few years.

“The more affordable markets, especially for first-time home buyers, are starting to tilt further south,” said Joel Berner, senior economist at Realtor.com. FOX Business:.

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He said last year’s rankings saw the digital real estate group see more Northeast and Midwest markets, while this year three of the top 10 were: alone in florida.

“The Sun Belt was the main hub for buyers during the overheated post-pandemic market, but as these southern markets cool off a bit, affordability is improving with listing prices flat to falling there,” Berner explained.

Here are the best markets for first-time homebuyers in 2025 in terms of home value, availability of homes for sale and quality of location:

1. Harrisburg, Pennsylvania – Median list price $140,000

Harrisburg is the capital of Pennsylvania. (iStock / iStock)

2. Rochester, New York – Median list price $129,900

3. Villas, Florida – Median list price $236,950

4. Lauderdale Lakes, Florida – Median list price $154,850

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5. Altamonte Springs, Florida – Median list price $229,400

6. Lansing, Michigan – Median list price $135,000

Aerial view of Lansing, Michigan (iStock / iStock)

7. North Little Rock, Arkansas – Median list price $160,000

8. Baltimore, Maryland – Median list price $210,000

Mortgage rates are up 7% for the 4th STRAIGHT WEEK.

9. Tonawanda, New York – Median list price $229,900

10. Wilmington, Delaware – Median list price $222,000

View from Russell Peterson Wildlife Refuge, Wilmington, Delaware (Bo Shen / iStock)

While these may be the best places to buy a first home this year, Realtor.com admits the affordability crisis in the U.S. isn’t going away anytime soon.

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“There will absolutely be affordability challenges in 2025,” Berner told FOX Business. “Our best hope for 2025 is to see affordability increased inventoryespecially for smaller and more affordable homes, as builders respond to the demand for affordable housing and homeowners who currently live in affordable homes move to upgrade.”