Top First-Time Buyer Markets

Despite interest rates hitting historically low and favorable levels, it’s a tough market for new home buyers across the U.S. Inventory is tight, especially for homes at entry-level price points in many markets.

However, major cities with sufficient inventory, affordability, and realistic median home values still exist. A recent Zillow study identified Indianapolis as the best city for first-time home buyers, since it has fewer cash buyers, lower home values, is more affordable, and has ample inventory.

Consider the following four cities for new home buyers, along with new construction communities from M/I Homes that might fit your must-have list.


With a large supply of homes for sale, searching for a home in Indianapolis is less stressful. The median home value is just $130,200, which keeps the mortgage-to-income ratio low at 11 percent. Indianapolis renters devote 26.1 percent of income toward housing.

New buyers searching for style and affordability might consider the Marlin Meadows community, where new construction homes start at $181,990. Marlin Meadows is situated in accessible and peaceful Franklin Township, with home sizes ranging between 1,433 and 4,200 square feet. 


The Windy City ranks fifth in the nation for first-time home buyers with a palatable median home value of $193,800. Because of high inventory and low cash-buyer competition, searching for a home in Chicago is less of a task. New home buyers in Chicago can expect to spend approximately 14 percent of a median-level income on a median mortgage. Chicago renters, on the other hand, shell out 31.1 percent of income toward rent.

At a starting price below the city’s median value, M/I Homes’ Sagebrook community in Lockport features new townhomes starting at $185,990 and new single family homes starting at 299,990. Residences range between two and five bedrooms in a modern design to satisfy today’s diligent house hunters. 


The median home value across Houston is a low $172,100 with a mortgage that comprises just 12.5 percent of the median income. Meanwhile, renters spend about 30.5 percent of income on their monthly dues. The Houston for-sale inventory is plentiful, giving buyers the negotiation power.

To circumvent resale competition, buying new construction in a community such as Bridgeland in Harris County starts at a reasonable $245,990 with homes ranging from 1,843 – 2,807 sq. ft.


Living in a tropical climate doesn’t have to come at a heavy cost. The median home value in Tampa is $163,600, assisted by high levels of inventory in the city. While renters in Tampa might spend 32.2 percent of their pay on rent, homeowners spend just 15.2 percent of wages on a mortgage. However, Tampa features a high volume of all-cash buyers.

Home buyers looking to spend under $200,000 in Tampa might consider a home at Talavera in Spring Hill, a new construction community with Mediterranean-style architecture, is rich with amenities, as well as has access to major sporting events and Sun West Park.

Whether you prefer the Midwest or South, first-time buyer markets make it easier for former renters to take advantage of low interest rates to lessen monthly costs.

** Tali Wee writes about finances, home improvement and interior design for Zillow and other partners.


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