Harrisburg, Pennsylvania, City skyline and State Capitol shot at dusk from Susquehanna River, PA. (Photo by: Joe Sohm/Visions of America/Universal Images Group via Getty Images)
LOS ANGELES – Buying a home for the first time is an important milestone and a decision that should not be taken lightly.
Choosing a location that perfectly matches where a homebuyer envisions building their life is daunting on its own, so Realtor.com decided to put together a list of the best markets for first-time home buyers for 2025.
“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. Even in these high-opportunity areas, tradeoffs 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,” said Danielle Hale, Chief Economist, Realtor.com.
Top 10 markets for 1st-time homebuyers
Realtor.com based its list on affordability, strong local economies, lively places that are also great for raising a family, and opportunities for a return on investment.
Buying a home in 2025
In an earlier report, Zillow predicted a more active market with additional inventory for 2025, giving buyers more room to negotiate.
Americans can expect to see more sales and only modest home value growth in 2025 as the market slowly becomes unstuck, according to Zillow.
The real estate company forecasts a 2.6% home value growth in 2025 – a relatively slow pace that is similar to last year’s growth.
How does the Fed’s rate cut affect home prices?
The Federal Reserve’s 50 basis point rate cut has potential homebuyers and sellers wondering what affect it will have on the housing market. It’s the Fed’s first rate cut since March 2020 and it lowers the benchmark federal funds rate to a range of 4.75% to 5%. Real estate experts expect the rate cut will bring more buyers and sellers to market, potentially increasing the inventory and creating momentum for price competition. LiveNOW’s Carel Lajara spoke about the housing market with real estate expert Kirsten Jordan.
What they’re saying:
“Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became. More inventory should shake loose in 2025, giving buyers a bit more room to breathe,” Skylar Olsen, Zillow’s chief economist, said in a statement.
Mortgages are going up
The average long-term U.S. mortgage rate ticked up again last week, remaining at its highest level since July.
By the numbers:
The benchmark 30-year fixed rate loan rate rose to 6.93% from 6.91% last week, according to mortgage giant Freddie Mac. It was at 6.66% a year ago. It has risen for four straight weeks.
The uptick in the cost of home loans reflects a rise in the bond yields that lenders use as a guide to price mortgages, specifically the yield on the U.S. 10-year Treasury. The yield on the 10-year Treasury has climbed from 3.62% in mid-September to 4.66% this week.
Home prices on the rise
Existing home sales rose 4.8% last month, from October, to a seasonally adjusted annual rate of 4.15 million, the National Association of Realtors said.
Sales accelerated 6.1% compared with November last year, representing the biggest year-over-year gain since June 2021. The latest home sales topped the 4.1 million pace economists were expecting, according to FactSet.
Home prices increased on an annual basis for the 17th consecutive month. The national median sales price rose 4.7% from a year earlier, to $406,100.
Despite increasing in November and October, home sales are still running below last year’s pace, when they sank to a nearly 30-year low.
The Source: Information for this story was gathered from Realtor.com data, The Associated Press and previous reporting by LiveNOW from FOX. This story was reported from Los Angeles.
