Where Should First-Time Buyers Live?

July 7, 2015

Deciding where to buy a home for the first time is one of the biggest decisions consumers will make, and not all states have prime conditions for young buyers looking to enter the market.

The recent recession caused many potential buyers to put off their decision to buy a home, but the improving economic climate is giving them incentives to finally jump into home ownership. In fact, NAR's May existing-home sales report showed the percentage of first-time buyers matched the highest share since September 2012.

"The first-time buyers are scooping up properties with 32 percent of all buyers being as such compared to only 27 percent one year ago. A lower fee on FHA mortgages is helping," says Lawrence Yun, NAR's chief economist, in his June economic and forecast update. "Buyers are coming back in force. One factor for the recent surge could have been due to the rising mortgage rates. As nearly always happens, the initial phase of rising rates nudges people to make decision now rather than wait later when the rates could be higher still."

So where should young buyers look to buy their first home? To rank the states that offer the best conditions for first-time home buyers, GOBankingRates considered which states saw the largest first-time buyer growth from 2003-2013, as well as the lowest levels of foreclosures. They also looked at the local housing market conditions and the state housing assistance programs that are available to help young buyers.

The 10 Best States for First-Time Buyers

  1. West Virginia
  2. New Hampshire
  3. Rhode Island
  4. Vermont
  5. Massachusetts
  6. Hawaii
  7. Washington, D.C
  8. Wyoming
  9. Maine
  10. Arizona

Source: "10 Best States for First-Time Home Buyers," The Huffington Post, (July 6, 2015), "Economic and Forecast Update," Economists' Outlook (July 1, 2015)