Today’s aspiring homeowners are facing squeezed budgets: mortgage rates are hovering above 6%, home-price inflation remains stubbornly high, and the divide between wages and housing costs continues to grow. While rural areas still remain a beacon of affordability for many, the situation can seem hopeless for those looking to buy in larger cities, especially first-time homebuyers who are less likely to have significant cash reserves or accumulated equity from a previous sale.
To help, we conducted a study to find the top ten MSAs (metropolitan statistical areas) for first-time buyers, keeping in mind the availability of low-down payment home loans and areas with the biggest bang for buyers’ budgets.
What Makes a Good City For a First-Time Buyer?
A good city for a first-time homebuyer isn’t just one with affordable sticker prices—it’s an area where buyers can stretch their paychecks the furthest, tap into government programs that help housing affordability, and build a life they love.
For our analysis, we ranked cities by three measures of affordability. First, we looked for areas where total housing payments (including mortgage, interest, and private mortgage insurance) remain below 30% of gross household income, the standard threshold for housing burden.
Second, we considered the sales, income, and property tax rates of each MSA’s respective state. Finally, we evaluated the average cost of living as determined through an index - setting the national average at 100. Other important indicators we used to formulate our list was the area’s share of government-backed loans and down payment assistance (DPA) program availability. We also ensured that the area’s average loan amount was within the loan limits for FHA loans, a low-down payment home loan with over 82% utilization by first-time homebuyers.
You can find a full explanation of our methodology here.
Top 10 Cities For First-Time Homebuyers in 2025
Beyond the numbers, we also valued cities that offered buyers choices between rural or urban counties, and where cultural attractions and outdoor recreation could keep weekends interesting, all without driving up demand (and prices) to unaffordable levels.
In these cities, first-time buyers not only secure an affordable mortgage, but they also inherit a neighborhood that can grow with them.
1. Oklahoma City, OK MSA
Oklahoma City tops our list with a median home value of $240,048, translating to average housing payments equal to 28% of the region’s $71,523 median income. Impressively, each of the metro’s seven counties keeps average housing burden under 30%, offering flexibility in house hunting for prospective buyers.
Oklahoma has the second-lowest sales tax among our top metros, but its 4.75% marginal income tax rate ranks toward the higher end. That being said, Oklahoma City had the second-lowest average cost of living on our list with an index score of 82.3, well below the national average of 100. Reinforcing its spot at number one were the high levels of FHA loan and VA loan share, 16% and 12%, respectively. This MSA’s average effective property tax rate sits at a reasonable 0.77%.
Oklahoma City offers a vibrant mix of urban adventure and Western charm for the more than 1.4 million residents of its metro area. Mild winters make it easy to explore outdoor gems like Scissortail Park or stroll the Bricktown Canal, where water taxis glide past restaurants and shops housed in revitalized warehouses. Barbecue lovers and craft beer fans will feel right at home in the buzzing Midtown and Plaza Districts. This area’s average of 200 days of sunshine makes it perfect for strolling through Myriad Botanical Gardens, catching live music outdoors, and exploring the growing Paseo Arts District.
2. Huntington-Ashland, WV-KY-OH MSA
This tri-state pocket MSA boasts the lowest housing costs of our top 10, with its nearly 360,000 residents spending an average of just 22% of their income on housing costs. The MSA also had the lowest average home price, at just $158,732, against a median income of $58,993.
This MSA has the second-lowest average property tax rate on our list at 0.71%. Kentucky has a marginal income tax rate of about 4%, and Ohio has a marginal income tax rate of 3.5%, lower than West Virginia’s 5.12%. In terms of sales tax, Kentucky and West Virginia average 6%, while Ohio’s is 5.75%. The MSA overall had the lowest average cost of living score of 77.9 – the only MSA with an index score below 80 on our top 10. The MSA also had the highest percentage of USDA loan share on our list at 3.05%, indicating a high number of USDA-eligible areas. The MSA additionally boasts an impressive amount of FHA and VA loan originations, with 16.30% FHA and 7.58% VA loan share. All seven counties in the metro fall below the 30% threshold.
Huntington-Ashland enjoys four distinct seasons: winters average around 30°F with occasional snow, while summers climb into the mid-80s°F, and rainfall is fairly even year-round. Outdoor lovers can hike the lush Appalachian foothills, boat or fish on the Ohio River, and join lively fall craft and music festivals that celebrate the region’s tri-state heritage.
3. Lubbock, TX MSA
The Lubbock, TX MSA comes in at number three, with an average home price of $202,387, making an average housing payment just 27% of the area’s $62,168 median income.
Every one of the MSA’s six counties meets our less than 30% housing-burden threshold, and the average cost of living score of 90.4 is well below the national average. Texas’s lack of a state income tax and 6.25% sales tax further bolsters affordability. However, the Lubbock, TX MSA has the second-highest average property tax rate at 1.56%.
Lubbock had the highest FHA loan share of all the cities on our list, at 24.82%. The MSA also has a high level of VA loan share at 7.98% and a high USDA loan share of 1.05%.
With a population of about 353,000, the Lubbock MSA is the smallest on our list; still, it offers a rich variety of experiences. With over 260 sunny days a year, mild springs, and warm, dry winters, it's a great place for outdoor activities like hiking the red rock trails of Caprock Canyons or birdwatching on the Llano Estacado. You can spend weekends touring local wineries, exploring the Buddy Holly Center, catching live music in the Depot District, visiting the Science Spectrum Museum, or cheering on a Texas Tech football game.
4. Baton Rouge, LA MSA
Number four is the MSA of Baton Rouge, Louisiana. With an average home price of $242,671, the average housing costs about 28.6% of the area’s median income of $70,700 and giving it a cost of living index score of 92.8.
Louisiana has a low state marginal income tax rate of 3% and a sales tax of 5%, the third lowest on our list. The MSA also has the lowest average property tax rate at 0.56%. Additionally, eight of ten counties in the MSA keep the housing burden under 30%. This area also has the second highest share of FHA loans at 22.18% and the highest share of USDA loans at 3.95% on our list, as well as a decent number of VA loans.
Baton Rouge also offers plenty to do for the over 860,000 people who call it home. Subtropical winters invite swamp-and-wildlife tours, and the riverfront comes alive year-round with scenic walks along the Mississippi levee and sunset cruises that showcase the city’s rich Creole and Cajun heritage. Foodies can sample spicy gumbo and fresh beignets at neighborhood spots like The Chimes, then dive into culture at the LSU Museum of Art, or catch live jazz at the historic Varsity Theatre.
5. Pittsburgh, PA MSA
Number five is the only East Coast city to make our list: Pittsburgh, PA, with the second-lowest average home cost as a percentage of income at 25%. The MSA has an average home price of $226,055 and a median income of $74,431 for its nearly 2.5 million population.
Pennsylvania has a low top marginal income tax rate of 3.07% and a sales tax of 6%; however, the average property tax rate is the third highest on our list at 1.41%. Seven of eight counties also fall under the 30% burden line. The Pittsburgh MSA receives a 98.2 cost of living index score, nearing the national average. While the area has a modest FHA (9.35%) and VA loan share (4.03%), the area only has a USDA loan share of 0.69%, indicating a lack of eligible property areas.
From skyline views atop the Duquesne Incline to fall color along the Three Rivers Heritage Trail, the Steel City blends affordability with four-season appeal, including crisp autumns, snowy winters, and pleasantly warm summers. You can expand your paleontology knowledge at the Carnegie Museum of Natural History, marvel at the colorful Randyland Art Museum, or admire the city from Mount Washington.
6. St. Louis, MO-IL MSA
Our sixth spot goes to the dual-state MSA of St. Louis, where homes average $266,902, about 28% of the median income of $79,573. This nearly 3 million resident MSA receives an 89.1 score on our average cost of living index.
Missouri's top marginal income tax rate is 4.8%, compared to Illinois’ 4.95%. The standard sales tax is also lower in Missouri, at 4.23%, than Illinois’ 6.25%. The property tax rate averages 1.30%. While only 11 of the 15 counties in this MSA meet our burden threshold, the MSA includes a surprising number of USDA-eligible areas, including Bond County, IL, and Franklin County, MO (each with more than 4% USDA penetration).
St. Louis experiences a classic humid-subtropical climate with hot, humid summers, averaging highs in the upper 80s to low 90s °F and cold winters dipping into the mid-20s °F; annual precipitation totals about 34 inches, peaking in spring, and snowfall averages just over 18 inches per season. This MSA touts plenty to do with multiple sports teams, kayaking on the Mississippi and Missouri Rivers, exploring the Delmar Loop arts scene, and enjoying cozy winter brewery tours at the classic Anheuser-Busch or the many local microbreweries.
7. Jackson, MS MSA
At number seven, Jackson’s $193,133 average home price yields the lowest average housing costs on our list, just 25% of the area’s median income of $60,378.
Tied with Indiana, Mississippi has the highest sales tax at 7%, but it’s balanced by a reasonable 4.4% top marginal income tax rate. Its roughly 620,000 residents experience a low 0.79% property tax rate. Seven of eight counties meet the ≤ 30% mark, and the cost of living index is a reasonable 89.6. Mississippi has good FHA and VA loan share rates, and a USDA loan share of 1.22%, offering options for rural buyers. Jackson’s perfect for those who prefer the heat, with long, hot summers and mild winters.
The area also offers buyers plenty to do with lush trails in LeFleur’s Bluff State Park, Fondren’s artsy boutiques, and soulful live music venues rounding out the Magnolia State experience. Culturally rich and walkable, Jackson offers everything from the world-class Mississippi Civil Rights Museum to the historic State Capitol to family-friendly stops like the Jackson Zoo and interactive Mississippi Children’s Museum.
8. Indianapolis-Carmel-Greenwood, IN MSA
At number eight is the multi-city MSA of Indianapolis, Carmel, and Greenwood, Indiana with a population of 2 million. This area includes an average home price of $294,634 and a median income of $80,950, bringing the average percent of housing cost right at 30%. Its average cost of living index score is 88.8, the third lowest on our list.
To combat these higher housing costs, Indiana has a low top marginal income tax rate of 3%; however, the state sales tax is at 7%. The MSA’s average property tax rate sits at 0.85%. Additionally, only 6 of the MSA’s 11 counties are below the housing burden rate. The MSA has a reasonable VA and FHA loan share, though it’s unlikely to find many USDA-eligible properties in the area.
The area offers a semi-humid climate and the ability to experience all four seasons. Annual thrills at the Indy 500, scenic White River canal paths, and the vibrant arts districts of Carmel underscore central Indiana’s appeal. Cultural and recreational highlights span the region: you can explore the newly renovated Indianapolis Motor Speedway Museum, bike or walk the Monon Trail through Carmel’s modern Arts & Design District, and shop or dine at Greenwood Park Mall just south of downtown Indianapolis.
9. Cincinnati, OH-KY-IN MSA
Number nine is another tri-state MSA and has over 2 million residents. The Cincinnati OH-KY-IN MSA homes average on the higher end at $299,281, averaging a total payment of 31% of the median income of $80,312, though 6 of the 15 counties pay less than 30%. Their average property tax rate is also 1.27%. If your budget is tight, it’s best to stay on the Ohio side of things, since they have the lower top marginal income tax rate (3.5%) and sales tax (5.75%).
The MSA offers a fair amount of FHA and VA loan share, though the USDA loan share is lower. The MSA’s cost of living index score also stays below the national average at 96.1.
Buyers who like warm summers coupled with a chance of snow in the winter can enjoy historic Over-the-Rhine architecture, sample craft beers along the riverfront, and find weekend escapes in nearby rolling hills any time of year. You can stroll through the Cincinnati Zoo & Botanical Gardens, the National Underground Railroad Freedom Center, and the historic Findlay Market.
10. Chicago-Naperville-Elgin, IL-IN MSA
Coming in at number 10 is the city often called the “New York of the Midwest”: the Chicago, Naperville, and Elgin MSA crossing Illinois and Indiana. This MSA has the largest population on our list at over 9.5 million residents. Understandably, this MSA has the highest average home price on this list at $335,557, with a 31% average cost of the median income of $89,617. This MSA also has the highest cost of living index score on our list, slightly above the national average (100) at 115.
This MSA also has the highest property tax on our list, with an average of over 2%. So, just how did the Chicago-Naperville-Elgin MSA make it on our list of top cities for first-time buyers? With a reasonable top marginal income tax rate of 4.95% and a sales tax of 6% on the Illinois side, a marginal income tax rate of 3% and a sales tax of 7% on the Indiana side, and an impressive 7 out of 12 counties in the MSA with average costs below the housing burdened rate. Finding USDA-eligible rural areas within this MSA is unlikely, though there are plenty just outside of it and FHA and VA loan share rates are solid at 10.77% and 3.45%, respectively.
The Chicago MSA offers buyers an endless list of things to do. Buyers can meander through the free Lincoln Park Zoo, wander the gardens at the Chicago Cultural Center, paddle a kayak down the Chicago River, or explore the street art murals in Pilsen.
Top Mortgage Programs For First-Time Homebuyers
First-time buyers often face the biggest hurdles in saving for a down payment and meeting stricter credit requirements, so tapping into specialized mortgage programs can make all the difference. FHA, HomeReady®/Home Possible®, VA, and USDA loans each have lower initial costs, whether through reduced down-payment thresholds, more flexible credit criteria, or outright zero-down options. They often come with capped fees or mortgage-insurance savings, too.
Here’s a look at how they compare:
- FHA Loans
Backed by the Federal Housing Administration
Down payment as low as 3.5%
More forgiving credit-score requirements than conventional loans
Annual mortgage insurance premiums apply, but closing-cost assistance is often available
- HomeReady® (Fannie Mae) & Home Possible® (Freddie Mac)
Down payment as low as 3%
Flexible eligibility: counts non-occupant household income (e.g., parents, roommates)
Allows gifts and grants for down-payment funds
Lower mortgage-insurance costs compared to standard conventional programs
Streamlined approvals for both first-time and repeat buyers
- VA Loans
100% financing with no down payment for eligible Veterans, active-duty service members, and certain spouses
No private mortgage insurance (PMI)
Borrower protections: VA caps on closing costs and advocacy if payment difficulties arise
Typically, very competitive interest rates
- USDA Loans
100% financing for buyers in USDA-designated rural and suburban areas
Income limits are generally up to 115% of the area’s median income
No down payment required
Upfront guarantee fee and low annual fee replace PMI
Ideal for affordability in qualifying counties
Our Findings Help Prepare First-Time Buyers
These findings empower first-time buyers by pinpointing metros where housing costs align most closely with local incomes and where the cost of living is within a reasonable range for the majority of homebuyers. Our study also highlights areas where VA, FHA, and USDA programs are thriving and where outreach could yield even greater gains. Finally, they underscore how small shifts in state tax rates or income-limit thresholds can unlock homeownership for more families.
Methodology
We combined data from Zillow, the U.S. Census Bureau’s American Community Survey (ACS), the Tax Foundation, the Home Mortgage Disclosure Act (HMDA), the U.S. Department of Agriculture (USDA), the Council of Economic Research, as well as Federal Reserve Economic Data (FRED) to conduct our analysis. We drew on the latest public data sources, including 2023 figures where they were the most current.
To arrive at our top 10, we evaluated all county data and narrowed down our search to counties where the median housing costs were under the 30% threshold for housing payment per income. We then found the MSAs with the most counties that met this criterion and applied weights for the following variables:
Average Percent of Income Going Toward Housing Costs
Average County-Weighted Effective Property Tax Rate by MSA
Average Top Marginal Income Tax Rate
Average State Sales Tax
Average Cost of Living Index Score
Each of the above variables used for ranking were calculated by averaging each variable for all counties within each MSA.
Housing burden was defined as spending more than 30% of income on housing costs (principal plus interest and private mortgage insurance) in line with HUD standards. To find the weighted average payment as a percentage of total income, we took the median household income and divided it by the area’s average home price.
