The past few years have marked one of the worst periods for first-time homebuyers in America's history.

Record home prices, chronically low inventory, 22-year-high mortgage rates, and bidding wars with cash- and equity-flush buyers have locked many younger buyers out of the housing market.

But there are still affordable housing options, even in expensive Sun Belt cities, according to a recent Creditnews Research report.

The report looked at America’s 50 largest metro areas to identify housing markets that are both attractive to live and affordable enough for an average household to buy a starter home on a mortgage.

Based on these criteria, Pittsburgh cliches the top spot. The steel town is followed by Sun Belt cities, including Austin, San Antonio, Birmingham, and Jacksonville.

“Never in America’s history was housing more unaffordable for first-time buyers than it is today,” said Sam Bourgi, senior analyst at Creditnews. “Yet, there are still options for those willing to downsize to starter homes in more affordable metro areas."

The best housing markets for first-time buyers in 2024

Perhaps surprisingly, Pittsburgh, PA, ranked first for first-time buyers, thanks in large part to its affordable starter home prices and bargaining power.

Starter homes in the steel town average around $107,912—the lowest among the metro areas in the study. Even at current mortgage rates, buyers can expect to pay $850 a month in mortgage and related fees, assuming a 10% down payment.

Compared to average household incomes, Pittsburgh buyers would be allocating a mere 14% of their monthly income toward mortgage costs.

Pittsburgh also ranked second in bargaining power—a calculation that considers average price cuts on listings before the sale. In other words, buyers don’t have to accept the listing price—they have a lot of negotiating power before they close.

Austin-Round Rock, TX, is the second-most affordable housing market for first-time buyers. This seems counterintuitive, given Austin’s surging property markets, but starter homes are much more affordable.

Austin scores very high for market access, which considers the number of days a home stays on the market. The longer a house remains listed, the better the odds of securing a better price.

The Texas capital also received a solid grade for livability, thanks to its amenities and job prospects.

San Antonio-New Braunfels, TX, which lies roughly 80 miles from Austin, takes the third spot in the ranking, thanks to market access, a strong labor market, and a high livability score.

Rounding out the top five are Birmingham-Hoover, AL, and Jacksonville, FL.

California dominates the bottom of the ranking

The worst cities for first-time buyers all lacked mortgage affordability and weren’t particularly competitive for employment. They also failed to stand out in market access or bargaining power.

Not surprisingly, California dominated the bottom of the ranking, with San Jose-Sunnyvale-Santa Clara (50th), San Diego-Carlsbad (49th), Los Angeles-Long Beach-Anaheim (48th), and Riverside-San Bernardino (46th) represented.

To get a sense of just how bad affordability is on the West Coast, consider that the average starter home is worth $651,891 in San Diego and a whopping $965,068 in San Jose.

The only non-California city in the bottom five was Denver-Aurora-Lakewood, which ranked especially badly for bargaining power (50th) and employment growth (48th).

Although housing affordability could improve in 2024 as mortgage rates decline, experts warn that a lack of supply will continue to drive prices higher. That means first-time buyers in the least affordable cities might not get much help.

Read the full report