Beyond the warm weather and picturesque beaches, Floridians now have some something else to gloat about — having two of the most affordable markets for first-time buyers.
Orlando and Tampa nabbed the top two spots on Zillow’s “Best 10 Markets for first-time Homebuyers” list, thanks to:
- Lower median home value for a more affordable down payment
- Strong home value forecast as an indicator of building equity
- Higher inventory-to-household ratio to capture available supply
- Shorter Breakeven Horizon to show a financial advantage of buying over renting
- Greater share of listings with price cuts to indicate a less competitive market
According to Zillow Group’s 2016 Report on Consumer Housing Trends, more than two-thirds of renters said saving for a down payment is the biggest barrier to homeownership — something that is easier to do in seven of the top 10 markets where median home prices are lower than the national average.
For example, a 5 percent down payment in the Bay Area is larger than a 20 percent down payment in each of the 10 markets listed. In dollars, that converts from a $70,000 down payment to a $40,000 down payment for a median priced home.
“As millennials reach the typical homebuying age, they are coming into a tough housing market with low inventory and lots of competition,” said Zillow Chief Economist Dr. Svenja Gudell in a press release.
“These markets have more favorable conditions for first-time buyers to become homeowners. More challenging metros aren’t out of reach for new buyers, but they should be prepared to face a more competitive buying environment.”
