These Are the 10 Best States for First-Time Homebuyers, Study Finds

Find out what the best states have in common.

Buying your first home can be a major financial commitment. Due to varying home prices across the country, your ability to afford a home can vary from state to state. And even if you are able to qualify for a mortgage and cover the down payment and closing costs, some first-time homeowners face foreclosure down the line due to unforeseen financial difficulties. However, foreclosure rates also vary from state to state.

A new GOBankingRates study looked at these two factors — median list price and foreclosure rate — plus the share of the real estate market represented by first-time homebuyers in each state to determine which states are the best and worst for people looking to make their homeownership dreams a reality.

According to the study, the 10 best states for first-time homebuyers are:

  1. Rhode Island
  2. West Virginia
  3. New York
  4. Mississippi
  5. Pennsylvania
  6. Michigan
  7. Lousiana
  8. Washington
  9. Georgia
  10. Massachusetts

Don’t Miss: Study Finds the Ideal Salary You Need to Own a Home in Your State

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If you’re looking for the best places to buy your first home, head to the South and the Northeast. Each region boasts four of the 10 best states for first-time homebuyers. In the South, look for properties in West Virginia, Mississippi, Louisiana and Georgia; in the Northeast, focus your search in Rhode Island, New York, Pennsylvania and Massachusetts.

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Although four of the 10 best states for first-time homebuyers are in the South, not every state in the region is a good place for aspiring homeowners to plant their roots. Four Southern states also rank among the top 10 worst states for new homebuyers: South Carolina, North Carolina, Delaware and Oklahoma.

See What You Can Get: How Much Home You Can Buy for $300,000 in Every State

Here is the complete ranking of the best and worst states for first-time homebuyers:

Ranking State Foreclosure Rates (%) First-Time Homebuyer Share Median List Price
1 Rhode Island 0.0438% 67 $279,600
2 West Virginia 0.0157% 52 $149,900
3 New York 0.0594% 65 $349,900
4 Mississippi 0.0287% 54 $169,000
5 Pennsylvania 0.0578% 59 $189,400
6 Michigan 0.0364% 54 $155,000
7 Louisiana 0.0435% 55 $198,000
8 Washington 0.0273% 56 $329,394
9 Georgia 0.0463% 56 $220,725
10 Massachusetts 0.0438% 61 $409,900
11 Virginia 0.0444% 57 $289,000
12 California 0.0459% 63 $494,500
13 Connecticut 0.0684% 61 $299,900
14 New Hampshire 0.0288% 53 $269,900
15 Missouri 0.0424% 51 $159,850
16 Utah 0.0394% 55 $315,000
17 Texas 0.0379% 53 $263,000
18 Nevada 0.0895% 62 $269,900
19 Ohio 0.0776% 56 $144,900
20 North Dakota 0.0092% 47 $239,800
21 South Dakota 0.0090% 46 $209,000
22 New Mexico 0.0722% 57 $212,990
23 Kansas 0.0294% 48 $159,900
24 Maryland 0.0935% 63 $291,204
25 Indiana 0.0602% 53 $149,999
26 Nebraska 0.0375% 50 $187,000
27 Alaska 0.0355% 52 $270,000
28 Minnesota 0.0424% 52 $239,999
29 Wisconsin 0.0364% 49 $184,900
30 Idaho 0.0263% 49 $253,990
31 Tennessee 0.0444% 50 $209,000
32 Arizona 0.0600% 54 $260,000
33 Kentucky 0.0366% 47 $165,000
34 Arkansas 0.0395% 47 $155,000
35 Florida 0.0717% 56 $274,940
36 Wyoming 0.0418% 49 $235,000
37 Illinois 0.0989% 58 $209,900
38 Montana 0.0159% 46 $290,000
39 Alabama 0.0695% 51 $180,000
40 Colorado 0.0221% 49 $390,000
41 Maine 0.0406% 47 $219,000
42 Hawaii 0.0272% 55 $595,000
43 Iowa 0.0440% 45 $164,900
44 Oregon 0.0450% 50 $329,900
45 Oklahoma 0.0592% 47 $174,900
46 Vermont 0.0139% 40 $239,000
47 Delaware 0.1196% 58 $269,900
48 North Carolina 0.0682% 48 $235,000
49 South Carolina 0.0893% 49 $225,000
50 New Jersey 0.1653% 63 $289,000

Click through to read more about the best city in every state to buy a home.

Methodology: States were ranked according to three factors: 1) foreclosure rates, which are based on the number of foreclosure actions to housing units as of March 2018, sourced from RealtyTrac; 2) percentage share of mortgage market comprised of first-time homebuyers, sourced from the Federal Housing Finance Agency; 3) home median list price, based on March 2018 data, sourced from Zillow. These three factors contributed to a final score that determined each state’s ranking.

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About the Author

Gabrielle Olya

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 

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