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The 7 Best States for New Homebuyers

There is a lot of information out there about the impact the COVID-19 pandemic is having on the housing market and homebuying decisions. The factors involved include record-low interest rates, economic uncertainty, and a resurging job market. However, the changes in the past year have also given people a new perspective on where they live, as well as an appreciation for flexibility if their work has transitioned from office to home, permanently or otherwise.

The 2021 homebuyer is more thoughtful about the type of house they choose, but also may be looking around the country for a sense of home in an entirely new region and neighborhood.

Homebuying by the Numbers

The shortage of supply and increasing home prices have pushed out some potential first-time buyers, which are mainly made up of millennials. The good news, according to the National Association of Realtors, is that home supplies have begun to improve, resulting in a slight increase of 1.4% in existing home sales in June. The U.S. median home price in May was $350,300, up 24% over last year and sales have increased in all markets, except the South.

So, where is the best place to buy when you can work from anywhere? The answer is always varied and dependent on priorities – best prices, safest neighborhoods, best quality of life or most reasonable cost of living. It all matters. We looked at home price data as well as some of the top “best of” surveys based on total homeownership to offer you a tour of the 7 best states for new homebuyers:

1 | Wyoming

New homeowners are discovering how the west was won in Wyoming. It’s a big state with a proportionally low population for that small town feel. The median home value is under $250,000, making it one of the most affordable states to buy and home values are appreciating which bodes well for new buyers. Another plus? No state income tax.

2 | Indiana

The Hoosier state rates high for new homebuyers as well as retirees. As one of the most affordable states, its median home value is about $141,000 with property taxes, closing costs and homeowners insurance ranking low on the national scale.

3 | Idaho

Idaho scores well on several fronts, thanks to low property taxes and increasing home values. Median home values are currently around $212,000. Boise, the capital city, offers culture, history and outdoors activities, landing it on multiple “best of” lists – and a bigger price tag.  

4 | Wisconsin

Heading back east, we include Wisconsin for its great affordability, low crime and quality of life. With median home prices under $200,000, the badger state boasts an accessible home value-to-household income ratio putting home ownership in reach for many.

5 | Utah

While Utah’s home prices may be out of reach for some first-time buyers, the state’s housing market ranks high thanks to impressive job growth, competitive mortgage rates and low state and local taxes. Ogden and Provo are seeing a lot of new homebuyers, and the wellness metric makes Utah a popular place for retirees. Current median value is about $280,000

6 | Arizona

There’s no question that retirees are still flocking to Arizona, but the Valley of the Sun has other positives to offer new homebuyers as well: low property taxes, strong home value appreciation, lots to do, and every kind of weather imaginable depending on where you’re at. Phoenix suburbs like Chandler, Gilbert and Surprise offer family-friendly affordability and the state’s median home value is $225,000.

7 | Virginia

The easternmost state we chose is Virginia, partly for its affordability and strong home value-to-income ratio and because many of its cities landed on numerous lists touting the best place to live. Places like Chesapeake, Harrisonburg and Virginia Beach score high for low crime and quality living. The median home values in Virginia are about $273,000.

Honorable Mentions

While different factors determined a wide variety of the most desirable states to pursue homeownership, most experts agree that the Midwest and the South offer the best home prices for first-time buyers right now.

Although Colorado didn’t make the list of seven states, several of Denver’s outlying suburbs including Arvada and Centennial were ranked as some of the best cities for first-time homebuyers. Nevada, Iowa and Florida cities rated favorably as well. Cost of living and home values in Hawaii, New York and California remain out of reach for many new shoppers.

Home Buying How-To

Whether the lower interest rates or a change in employment has you thinking about buying somewhere new, there is more to consider. Be sure to figure in all costs in addition to the selling price – homeowners insurance, property taxes and closing costs to name a few. Financial experts advise the 30% rule to determine how much to spend – in other words, no more than a third of your gross monthly income.

Mortgage lenders may also be able to offer a variety of loan products that vary by state so shop around. Our team at Titan Mutual Lending Inc. (Titan Mutual Lending Inc.) can answer your questions about purchasing or refinancing the right home. We understand that a mortgage is not just a transaction but a path to your American dream.

Sources for data used included National Association of Realtors, Smart Asset, Wallet Hub, World Population Review and CNBC.



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