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:
- Rhode Island
- West Virginia
- New York
- Mississippi
- Pennsylvania
- Michigan
- Lousiana
- Washington
- Georgia
- 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:
| 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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