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

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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.

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:

RankingStateForeclosure Rates (%)First-Time Homebuyer ShareMedian List Price
1Rhode Island0.0438%67$279,600
2West Virginia0.0157%52$149,900
3New York0.0594%65$349,900
4Mississippi0.0287%54$169,000
5Pennsylvania0.0578%59$189,400
6Michigan0.0364%54$155,000
7Louisiana0.0435%55$198,000
8Washington0.0273%56$329,394
9Georgia0.0463%56$220,725
10Massachusetts0.0438%61$409,900
11Virginia0.0444%57$289,000
12California0.0459%63$494,500
13Connecticut0.0684%61$299,900
14New Hampshire0.0288%53$269,900
15Missouri0.0424%51$159,850
16Utah0.0394%55$315,000
17Texas0.0379%53$263,000
18Nevada0.0895%62$269,900
19Ohio0.0776%56$144,900
20North Dakota0.0092%47$239,800
21South Dakota0.0090%46$209,000
22New Mexico0.0722%57$212,990
23Kansas0.0294%48$159,900
24Maryland0.0935%63$291,204
25Indiana0.0602%53$149,999
26Nebraska0.0375%50$187,000
27Alaska0.0355%52$270,000
28Minnesota0.0424%52$239,999
29Wisconsin0.0364%49$184,900
30Idaho0.0263%49$253,990
31Tennessee0.0444%50$209,000
32Arizona0.0600%54$260,000
33Kentucky0.0366%47$165,000
34Arkansas0.0395%47$155,000
35Florida0.0717%56$274,940
36Wyoming0.0418%49$235,000
37Illinois0.0989%58$209,900
38Montana0.0159%46$290,000
39Alabama0.0695%51$180,000
40Colorado0.0221%49$390,000
41Maine0.0406%47$219,000
42Hawaii0.0272%55$595,000
43Iowa0.0440%45$164,900
44Oregon0.0450%50$329,900
45Oklahoma0.0592%47$174,900
46Vermont0.0139%40$239,000
47Delaware0.1196%58$269,900
48North Carolina0.0682%48$235,000
49South Carolina0.0893%49$225,000
50New Jersey0.1653%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.