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Since the 2008 recession, the popularity of homeownership has been replaced by the affordability and flexibility of renting.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 $548,600.2018 All rights reserved.