Worst cities for first-time homebuyers
While there are plenty of positive aspects to consider when settling on where to purchase your first home, those pluses have to be weighed against any number of negatives. Understanding factors such as the overall affordability of the area, quality of life, safety, schools, and real estate projections are essential in the research that goes into purchasing a home.
Since the 2008 recession, the popularity of homeownership has been replaced by the affordability and flexibility of renting. There are 47% more renters than homeowners in almost half of all major U.S. cities, up from 21% in 2006 before the recession, according to a 2018 report from Marketplace representing 10 years of data. Seventy-five percent of people aged 18 to 24 say that they still consider owning a home an important personal goal. Unfortunately for millennials caught in the recession, this goal may not be as realistic as it may have been for past generations. Student loans have tripled since 2006, now totaling more than $1.5 trillion and leaving many young Americans entering the post-school workforce with crippling debt.
Because of these concerning financial reasons, Americans are increasingly prudent about how they spend their money—especially with something as big as purchasing a home. To determine the worst cities for first-time home buyers, we reviewed data from WalletHub to rank affordability, real estate markets, and quality of life. We then grouped the results for each city into an overall score and ranked them accordingly with higher ranking representing worse scores. We then researched the cities themselves to find out why that city may be a bad choice for homebuyers, if it ranks at the bottom for anything else, and aspects about the city that might detract first-timers. We further looked at factors from BestPlaces, including which cities had the highest statistics for crime, which cities were the most expensive, and which ones had the lowest overall quality of life, and compared it to the national averages. Keep reading to see which U.S. cities are the worst options for first-time homebuyers.
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#50. New Orleans, LA
- Total score: 45.5
- Affordability rank: #214
- Real estate market rank: #234
- Quality of life rank: #270
New Orleans may be known for its delicious food and lively events such as Mardi Gras, but it is also the 19th most violent state in the country. There were 1,121 violent crimes per 100,000 and 157 homicides in 2017.
#49. Pomona, CA
- Total score: 45.47
- Affordability rank: #239
- Real estate market rank: #246
- Quality of life rank: #182
While Pomona lands toward the end of this list in terms of affordability, the city ranks very low for its size. Out of the 100 cities that were considered “mid-size” (meaning between 150,000 to 300,000 people) the California city of Pomona ranked 89th worst for first-time home buyers.
#48. Escondido, CA
- Total score: 45.35
- Affordability rank: #255
- Real estate market rank: #173
- Quality of life rank: #226
A suburb of San Diego, Escondido is the 90th worst for first-time home buyers out of the 100 mid-sized cities studied by WalletHub. It has a more favorable score for the real estate market than similar cities on the list, meaning it may be a better choice out of the bottom 10 if you’re buying for reselling purposes.
#47. Paterson, NJ
- Total score: 45.06
- Affordability rank: #230
- Real estate market rank: #299
- Quality of life rank: #63
Paterson ranks 113th worst out of small-sized cities studied by WalletHub. Though it is listed unfavorably overall, the quality of life score isn’t terrible, at only 63rd worst compared to similarly ranked cities.
#46. Anaheim, CA
- Total score: 45.04
- Affordability rank: #264
- Real estate market rank: #254
- Quality of life rank: #159
Even though Anaheim is home to the original Disneyland, the "Happiest Place on Earth" doesn't extend into the city that surrounds it. It ranks low for affordability and real estate, and in the middle for quality of life.
#45. Vista, CA
- Total score: 44.96
- Affordability rank: #256
- Real estate market rank: #181
- Quality of life rank: #232
Compared to the rest of the country, the cost of living in Vista, north of San Diego, is over 60% higher than the U.S. average. Unfortunately, Vista is also known as one of the worst cities in the country for air quality, lowering the quality of life substantially.
#44. Oceanside, CA
- Total score: 44.94
- Affordability rank: #244
- Real estate market rank: #193
- Quality of life rank: #248
Oceanside is on the Southern California coast about 120 miles south of Los Angeles and 20 miles north of the Mexican border. Like nearby Vista, Oceanside also suffers from low air quality and is the second-most risky city for drought in the U.S.
#43. San Jose, CA
- Total score: 44.91
- Affordability rank: #290
- Real estate market rank: #115
- Quality of life rank: #120
Thanks to the surrounding Silicon Valley, San Jose has increased in price substantially in recent years. The average housing price is $575,000 and the median household income averages a little over $81,000. The city’s cost of living is 160% higher than the U.S. average.
#42. Richmond, CA
- Total score: 44.76
- Affordability rank: #262
- Real estate market rank: #147
- Quality of life rank: #247
The average commute time for residents of Richmond is higher than the national average at 35 minutes (compared to 26 minutes). Income tax is also higher, at just over 9% compared to the U.S. average of 7%.
#41. Santa Monica, CA
- Total score: 44.7
- Affordability rank: #275
- Real estate market rank: #247
- Quality of life rank: #127
It's no surprise that Santa Monica ranks poorly for affordability, as the cost of living is 267% higher than the national average. In addition, the median housing cost in Santa Monica is an astronomical $1,772,900, well over the national average of $219,700 and even the California average of $548,600.
#40. Salinas, CA
- Total score: 44.65
- Affordability rank: #238
- Real estate market rank: #222
- Quality of life rank: #246
A smaller city in Northern California, Salinas ranks in the bottom percentile for all three categories observed. Unemployment in the city is at over 8%, compared to the U.S. average of almost 4%. The average income of a typical Salinas resident is $17,810 a year compared to the national average of $28,555 a year.
#39. Fullerton, CA
- Total score: 44.57
- Affordability rank: #258
- Real estate market rank: #284
- Quality of life rank: #80
The median home cost in Fullerton is over three times that of the United States, making housing the largest factor in overall cost of living in the city. When compared to the rest of the nation, the cost of living in Fullerton is almost 80% higher.
#38. Downey, CA
- Total score: 44.43
- Affordability rank: #253
- Real estate market rank: #287
- Quality of life rank: #108
Downey is more expensive to live in compared to the rest of California, most notably the cost of transportation (average cost of gas, insurance, mass transit fares, etc.). Transportation costs almost twice as much in Downey as the rest of the country.
#37. Santa Ana, CA
- Total score: 44.31
- Affordability rank: #218
- Real estate market rank: #279
- Quality of life rank: #235
There are fewer people working in Santa Ana with an income over $200,000 compared to the rest of the state of California, at 3.5% and 9.7% respectively. Despite this, the median household income of a Santa Ana resident is $52,519 a year compared to the U.S. average of $53,482 a year.
#36. Compton, CA
- Total score: 44.22
- Affordability rank: #250
- Real estate market rank: #260
- Quality of life rank: #191
There is more than twice the amount of violent crime in Compton than the national average, but only slightly higher when it comes to property crime. When compared to the rest of California state, Compton has a violent crime index of 56.8 versus the state average of 25.2.
#35. Anchorage, AK
- Total score: 44.21
- Affordability rank: #82
- Real estate market rank: #263
- Quality of life rank: #300
One of the biggest factors for Anchorage’s low quality of life is the uniquely dreary weather. From October to April the city sees an average of over 20 freezing days, and year-round there are only 126 sunny days (compared to the U.S. average of 205).
#34. Santa Clara, CA
- Total score: 44.02
- Affordability rank: #298
- Real estate market rank: #69
- Quality of life rank: #37
Santa Clara’s unemployment rate and real estate market is much better than similarly placed cities on the list. The affordability, however, lowers the overall score exponentially. The cost of living in this city is 210.5% higher than the national average.
#33. Miami, FL
- Total score: 43.95
- Affordability rank: #280
- Real estate market rank: #168
- Quality of life rank: #176
Miami is known for its high property insurance rates, meaning owning a home often comes with high premiums. That is in addition to having high property taxes, so the bad score in affordability isn’t surprising.
#32. Huntington Beach, CA
- Total score: 43.86
- Affordability rank: #269
- Real estate market rank: #268
- Quality of life rank: #121
Huntington Beach’s housing index is over four times that of the national average, and the average cost to rent a four-bedroom house in the small city is more than twice the amount as the rest of the country. To buy a house, the median price is just over $800,000 compared to the U.S. average of $219,000.
#31. Honolulu, HI
- Total score: 43.65
- Affordability rank: #270
- Real estate market rank: #250
- Quality of life rank: #216
While the unemployment rate in Honolulu remains lower than the rest of the country, recent and projected future job growth is lower than the U.S. average. Overall cost of living is higher, as the island-city needs to import most of its products.
#30. Washington D.C.
- Total score: 43.51
- Affordability rank: #245
- Real estate market rank: #198
- Quality of life rank: #277
Washington D.C. ranks high in both violent crime and property crime, showing an index of 56 and 63 respectively, compared to the national average of 22 and 35. An average single-family home costs $545,000, well over twice the national average.
#29. Cambridge, MA
- Total score: 43.49
- Affordability rank: #285
- Real estate market rank: #297
- Quality of life rank: #17
Housing is the biggest negative in cost of living in the city of Cambridge. Buying a house here will have a median cost of over $800,000 compared to the national median of $219,000.
#28. Garden Grove, CA
- Total score: 43.29
- Affordability rank: #273
- Real estate market rank: #285
- Quality of life rank: #102
Garden Grove has only seen a job market increase of 0.6% over the past year. Also, future job growth is projected to remain lower than the national average in the near future.
#27. New York, NY
- Total score: 43
- Affordability rank: #279
- Real estate market rank: #290
- Quality of life rank: #148
New York City is known for its bustling and exciting lifestyle, which may be favorable to certain people. The late nights, large crowds, and high cost of living that result from this makes NYC a poor choice for first-time buyers.
#26. Boston, MA
- Total score: 42.99
- Affordability rank: #294
- Real estate market rank: #191
- Quality of life rank: #103
The average commute time for Boston residents is 30 minutes, which is above the national average of 26 minutes. The overall average cost of groceries, housing, utilities, and transportation is also above the U.S. average.
#25. Sunnyvale, CA
- Total score: 42.97
- Affordability rank: #299
- Real estate market rank: #141
- Quality of life rank: #15
The cost of living in Sunnyvale is almost four times as much as the national average. The median cost of a home is a whopping $1.7 million compared to $219,000 for the U.S. median.
#24. Long Beach, CA
- Total score: 42.91
- Affordability rank: #274
- Real estate market rank: #267
- Quality of life rank: #179
The crime index for both violent and property crime in Long Beach is above the national average, which is not good news for homeowners. The unemployment rate in the city is 4.7%, higher than the rest of the country’s average of 3.9%. Sales tax rates and income tax rates are both higher as well.
#23. Costa Mesa, CA
- Total score: 42.86
- Affordability rank: #282
- Real estate market rank: #230
- Quality of life rank: #83
The cost of living in Costa Mesa is over 100% more than the national average. To buy a home in the city it will cost an average of $819,800, and home appreciation has risen 5.04% in the last 10 years.
#22. Birmingham, AL
- Total score: 42.86
- Affordability rank: #81
- Real estate market rank: #296
- Quality of life rank: #290
Although the median home cost in Birmingham is only $66,900 and home appreciation the last 10 years has been 11.09%, crime rates in the city lower the overall quality of life ratings. Birmingham’s index for violent crime is 75.2. (the U.S. average is 22.7) and the property crime index is 89 (the U.S. average is 35.4).
#21. El Cajon, CA
- Total score: 42.81
- Affordability rank: #271
- Real estate market rank: #216
- Quality of life rank: #230
The average income per capita in El Cajon is about $22,000 compared to the U.S. average of just over $31,000. Recent job growth, projected job growth, and unemployment also remains below the national average.
#20. Pasadena, CA
- Total score: 42.7
- Affordability rank: #283
- Real estate market rank: #262
- Quality of life rank: #43
Though the quality of life in Pasadena is higher than similar cities, the cost of living is much higher than the rest of the country. The sales tax rate is 9.5% compared to the U.S. average of 7.3%, and the income tax rate is 9.3% compared to the U.S. average of 4.6%.
#19. Torrance, CA
- Total score: 42.35
- Affordability rank: #276
- Real estate market rank: #286
- Quality of life rank: #110
Torrance has only seen 0.7% job growth in recent years, compared to the United States’ 1.6%. Both income and sales tax is higher in the city and the median home price is $818,600.
#18. South Gate, CA
- Total score: 42.17
- Affordability rank: #268
- Real estate market rank: #280
- Quality of life rank: #164
The average commute time for a South Gate resident is over 30 minutes, which can negatively affect the quality of life. Median home cost is twice the amount of the rest of the country as well.
#17. San Francisco, CA
- Total score: 42.06
- Affordability rank: #277
- Real estate market rank: #277
- Quality of life rank: #214
The cost of living in San Francisco has largely to do with the housing market, as it costs an average of $1,398,100 to buy a home in the city and over $4,000 to rent a three-bedroom home (compared to the national average of $1,537 to rent a home of the same size). The cost of groceries, transportation, and going out to eat is higher than the rest of the country too.
#16. Burbank, CA
- Total score: 41.92
- Affordability rank: #287
- Real estate market rank: #251
- Quality of life rank: #53
Unemployment in Burbank is 5.3%, which is higher than the national average of 3.9%. Both recent job growth and projected future growth is lower than the average, and the cost of living in Burbank is over twice as much as the rest of the country.
#15. Yonkers, NY
- Total score: 41.33
- Affordability rank: #267
- Real estate market rank: #293
- Quality of life rank: #165
Commute time takes an average of 34 minutes for Yonkers residents and the cost of living and housing is high. The utility cost index for the city is over 150 compared to the national average of 100 and is also more expensive than the rest of New York State.
#14. Inglewood, CA
- Total score: 40.54
- Affordability rank: #281
- Real estate market rank: #264
- Quality of life rank: #133
The unemployment rate of Inglewood is 5.5%, well over the national average. While utilities and health care are below average for the rest of the country, the cost of transportation (meaning average cost of gas, insurance, mass transit fares, etc.) has an index of 188 (compared to the U.S. average of 100).
#13. Los Angeles, CA
- Total score: 40.17
- Affordability rank: #293
- Real estate market rank: #248
- Quality of life rank: #157
The population of Los Angeles is already at 3,949,776 residents, and since 2010 has grown by 4.7%. Heavy traffic leads to longer commute times and violent crime is higher than the national average.
#12. Miami Beach, FL
- Total score: 39.87
- Affordability rank: #257
- Real estate market rank: #289
- Quality of life rank: #265
Miami Beach has a higher risk for bad weather such as hurricanes, adding to the cost of living through additional safety measures and necessary insurance. The property crime index for Miami Beach is extreme, at 95 compared to the U.S. average of 35.4 on a ranking scale from 1 (low crime) to 100 (high crime).
#11. Glendale, CA
- Total score: 39.72
- Affordability rank: #295
- Real estate market rank: #278
- Quality of life rank: #85
Glendale has one of the worst scores out of all cities in terms of affordability on the WalletHub list, and ties with San Mateo, Sunnyvale, Santa Barbara, and Berkely for least affordable housing markets. Both violent and property crimes are lower than the national average, but the air and water quality are worse than average.
#10. Elizabeth, NJ
- Total score: 39.48
- Affordability rank: #284
- Real estate market rank: #298
- Quality of life rank: #76
Elizabeth is not a great city to move to for employment, as job growth over the next ten years is predicted to be lower than the rest of the country. The unemployment rate in the city is 5.2% (the U.S. average is 3.9%), and recent job growth is negative, having decreased by 0.73% over 2018.
#9. Daly City, CA
- Total score: 39.44
- Affordability rank: #291
- Real estate market rank: #233
- Quality of life rank: #174
While employment has increased in recent years, the cost of living in Daly City is still 145.1% higher than the national average. The median cost to buy a home is over $1 million.
#8. El Monte, CA
- Total score: 39.01
- Affordability rank: #289
- Real estate market rank: #271
- Quality of life rank: #141
El Monte residents have a lower income average than the rest of the country, with income per capita at $16,337 compared to the U.S. average of $31,177. The city also has a higher unemployment rate of 4.6% with only 0.73% job growth over 2018 (the U.S. average growth was 1.59%).
#7. Newark, NJ
- Total score: 38.97
- Affordability rank: #222
- Real estate market rank: #300
- Quality of life rank: #267
Newark had the lowest overall rating for mid-size cities (cities with 150,000 to 300,000 people) in the WalletHub study. Additionally, the unemployment rate in the city is 7.1%, compared to the U.S. average of 3.9%, and job growth has decreased over the past year.
#6. Westminster, CA
- Total score: 38.95
- Affordability rank: #286
- Real estate market rank: #258
- Quality of life rank: #205
The median cost of buying a home in Westminster is three times more than the national average, and a three-bedroom rental will cost about $1,000 more than in the rest of the country. Although the average income of a Westminster resident is almost $6,000 less than the U.S. average, the state's sales tax and income tax is more than average.
#5. San Mateo, CA
- Total score: 38.94
- Affordability rank: #300
- Real estate market rank: #166
- Quality of life rank: #147
San Mateo, Calif. ties with four other cities for the worst affordability. Despite that, real estate market and quality of life scores are mid-range. The median cost of buying a home in San Mateo is over six times the national average at close to $1.5 million.
#4. Oakland, CA
- Total score: 37.45
- Affordability rank: #288
- Real estate market rank: #131
- Quality of life rank: #294
Although Oakland’s violent crime scale is almost three times that of the United States average, the cost of living is still over 100% higher. The city of Oakland currently holds 417,442 residents and has increased by 7.89% since 2010, meaning overcrowding should be another concern for potential buyers.
#3. Santa Barbara, CA
- Total score: 36.4
- Affordability rank: #297
- Real estate market rank: #256
- Quality of life rank: #123
Santa Barbara may have a higher quality of life than similar cities, but residents will certainly have to pay for it. The median price to buy a home in Santa Barbara is $1,198,900, over five times the national median.
#2. Detroit, MI
- Total score: 33.37
- Affordability rank: #248
- Real estate market rank: #295
- Quality of life rank: #298
Ranked on a scale of 1 to 100 (with 1 being low crime and 100 being high crime) violent crime in Detroit is rated as 94.3 (the U.S. average is 22.7) and property crime is 66.7 (the U.S. average is 35.4). The city’s population has decreased by over 10% in recent years and the cost of living is 5.6% lower than the national average.
#1. Berkeley, CA
- Total score: 32.95
- Affordability rank: #296
- Real estate market rank: #292
- Quality of life rank: #233
Potential home-buyers looking to purchase in Berkeley should be wary of the potential population increase, as the city has already seen a population growth of 9.84% over the last 10 years. The median price of a home in Berkeley is $1,209,500 and the cost of living in Berkeley is 187.5% higher than the national average.
