A new report from Neighbors Bank identifies the 10 best cities for first-time home buyers. All are affordable by national standards, but also provide the jobs and lifestyles younger buyers want.
Disclosure note: Neighbors Bank (NMLS #491986) is a Columbia, Missouri-based national lender. Equal Housing Opportunity. Neighbors Bank is an affiliate of Three Creeks Media, which operates this website.
The 10 Best Cities for First-Time Buyers
Here's Neighbors Bank's list, along with affordability indicators. For context, the median nationwide sales price of a home was $410,800 in the second quarter of 2025, according to the Federal Reserve Bank of St. Louis.
The 10 are largely grouped in the same geographical region, which encompasses Illinois, Indiana, Philadelphia, Iowa, Ohio and Michigan. But there's one each in Kansas and Texas, too.
- Peoria, IL — Median home price: $161,868; Housing cost as a percent of income: 25%
- Fort Wayne, IN — Median home price: $246,963; Housing cost as a percent of income: 33%
- Pittsburgh, PA — Median home price: $221,503; Housing cost as a percent of income: 29%
- South Bend, IN — Median home price: $221,658; Housing cost as a percent of income: 32%
- Davenport, IA — Median home price: $183,689; Housing cost as a percent of income: 28%
- Rockford, IL — Median home price: $206,734; Housing cost as a percent of income: 34%
- Wichita, KS — Median home price: $214,523; Housing cost as a percent of income: 34%
- Toledo, OH — Median home price: $194,680; Housing cost as a percent of income: 30%
- Lansing, MI — Median home price: $238,495; Housing cost as a percent of income: 34%
- Wichita Falls, TX — Median home price: $169,458; Housing cost as a percent of income: 31%
The housing cost figure includes property taxes and homeowners insurance premiums in addition to the mortgage payments.
Choosing the Right City — Employment
A smart first-time buyer will look at a range of factors before relocating to a particular city. And the report recognizes that need.
In particular, it's important to most first-time buyers that they move somewhere with good job prospects. So, they may want to relocate to cities where their particular skills are in demand.
For example, Neighbors says that Peoria is strong on healthcare, manufacturing, and professional services, while Lansing's strengths are state government, higher education, and healthcare. It makes sense to move to where one's skills and expertise are in demand, especially if the local labor market is fundamentally strong.
Of course, none of the cities on Neighbors' list may be appropriate career choices for some. A high-flying AI developer may find that Silicon Valley is the best place to progress, even though that's highly unlikely to appear on any list of affordable homes anytime soon.
Meanwhile, a career-oriented surgeon or academic is more likely to be attracted to the prestige of the hospital or university that's trying to recruit them than the quality of home they can afford.
Choosing the Right City — Quality of Life
Meanwhile, there's more to life than work. And buyers need to look at other factors that are important to them.
Those might include a short commute, affordable childcare, easy access to outdoor pursuits, favored sports teams, cultural venues, and great restaurants.
The National Association of Realtors® says that the average age of a first-time buyer has risen to 40 years. If many are younger, many others are bound to be older, some of whom may be retiring. For them, excellent healthcare provision may be a bigger priority than it once was, and a short commute is irrelevant.
Of course, everyone wants to live in a safe, quiet neighborhood, but those are to be found in just about every American city, including these highly affordable ones.
