The city best known for blues music and the Gateway Arch is also a prime destination for people looking to buy their first home.
The median sales price for homes in St. Louis is $205,500, Redfin data shows — well below the national median of $384,500. St. Louis is also among a handful of cities where home prices are expected to fall this year, according to a Realtor.com forecast.
Zillow defines affordable as homeowners spending no more than 30% of their income on payments, factoring in a 5% down payment, and a mortgage of 6.94%.
To be sure, for many Americans buying a home remains a major financial challenge. To comfortably afford a typical home, Americans today must have household income of $106,500 — up sharply from $59,000 just four years ago, according to previous Zillow research.
In the current week, the interest rate on a conventional 30-year mortgage reached 6.82%, as reported by Freddie Mac. Experts are anticipating that rates will remain within the range of 6.75% to 7% throughout the spring homebuying season.
"The positive development for potential homebuyers is the increase in inventory in certain markets," stated Lisa Sturtevant, the chief economist at Bright MLS in an interview with CBS MoneyWatch. Sturtevant added, "Buyers have been hesitant in recent weeks, but with more supply expected this spring, we should see more buyers entering the market."
Despite the challenges associated with purchasing a home, a significant number of individuals are successfully navigating the process. According to an analysis by LendingTree, homeownership rates in the nation's 50 largest metro areas have risen from 60.6% in 2012 to 61.7% in 2022 — resulting in an increase of 6.1 million new homeowners.
Zillow's list of the top cities for first-time homebuyers was curated based on affordability as a primary criterion. Additionally, researchers considered the percentage of households led by individuals aged between 29 and 43, the typical age range for first-time homebuyers.
Zillow's ranking also took into account the difficulty of finding rental properties, as a competitive rental market can hinder the ability to save for a home purchase. This factor explains why cities like Austin, Texas, and San Antonio, Texas, which have higher rental costs, still made the list.
The top cities for first-time homebuyers according to Zillow's analysis are as follows:
2. Detroit (63% of homes for sale are affordable)
3. Minneapolis (48%)
4. Indianapolis (50%)
5. Austin, Texas (23%)
6. Pittsburgh (63%)
7. San Antonio (33%)
8. Birmingham, Alabama (47.5%)
9. Kansas City (50.5%)
10. Baltimore (56%)
