That age-old question has been debated and fought over for generations but has become particularly salient after years of home price growth made homeownership for lower-income and first-time buyers completely out-of-reach in many markets.
With a median income of $38,854 and a median home price of $385,000, an average resident of Newark, New Jersey would need to put away 77.52% of their income on a mortgage.
This Is Where First-Time Homebuyers Should Start Looking
In its latest round-up on the best cities for first-time homeowners, Realtor.com identified places with not just affordable home prices but also enough job prospects to make significant equity growth likely.
A 30-minute drive from the larger Virginia Beach and just across a bridge from Norfolk, Portsmouth is a sleepy Virginia suburb with a median listing price of $239,000. The price-to-income ratio is just 3.9 so many young families can start saving for a down payment without feeling like they are running uphill.
In 2023, many suburbs are now struggling with falling prices following the small spike in demand and overly ambitious developers that swept in during the pandemic. Bucking the trend, Portsmouth rose four spots from last year's roundup as a number of industries came to the area.
"There are plenty of good jobs, including many military ones, in the city of about 100,000 thanks to the naval medical center and the Coast Guard base," reads the Realtor.com report. "There is also an international port as well as shipyards based there with a new casino opening there this month."
Second on the list was Wisconsin's DeForest -- also a 30-minute ride from the state capital Madison, the 11,000-person town has a median listing price of $389,900 and has become a popular suburb for those looking to break into homeownership outside a more expensive city.
The Northeast Is Full Of Small Towns With Affordable Real Estate
Connecticut's Windsor Locks has a median listing price of $239,900 and takes the third spot. A 20-minute drive rom Hartford and two-and-half-hour drive from New York City, the Northeastern suburb continues the trend of smaller towns not immediately in but within access to a larger city.
"Midsized towns with lots of amenities for young people and more affordable homes are great places for first-time homebuyers, especially in 2023." Realtor.com Senior Economist George Ratiu said in a statement. "They do have local employment markets, which are strong enough to support young professionals getting a start in their careers."
Other towns and cities in the top ten include Moore in Oklahoma and Magna, Utah. The latter has the highest price-to-income ratio but, at 5.1, is still nowhere near what it is in some of the country's most popular locations.
The stereotype that first-time homebuyers need to look away from the West and Northeast entirely is also not showing itself in the numbers. The list has more Eastern towns than Midwestern ones while three cities in New York State but outside driving range of NYC also made the list -- upstate's Eggertsville, Watervliet and Mattydale.