Best and Worst States for First-Time Homebuyers

Many Americans have delayed purchasing their first home thanks to the fallout from the housing crash that began in 2007. Now, over a decade later, home prices and values have recovered in many areas across the country. First-time homebuyers need to act promptly before they get priced out of the market because some cities are seeing home prices skyrocket.

To see which states offer the best conditions for prospective new homeowners, GOBankingRates ranked the 50 states based on three factors: the foreclosure rate, the share of the market represented by first-time homebuyers and the median list price for a home. In addition to these factors, the study also identified home loan programs that can help buyers lock down affordable mortgages in each state.

50. New Jersey

• Foreclosure Rate: 1 in 605 (No. 1 highest)
• First-Time Homebuyer Share: 63 percent (tied No. 3 highest)
• Median List Price: $289,000

New Jersey has the highest rate of foreclosures in our study, spearheaded by troubled counties like Warren County and Atlantic County, which includes Atlantic City. The state’s median list price doesn’t make the deal much sweeter, despite the high percentage of first-time homebuyers in the market.

New Jersey has several programs that first-time homebuyers can apply for. The HomeSeeker Program provides $10,000 for first-time homebuyers and veterans to use as a down payment or assist with closing costs when buying a home in select counties. The Smart Start Program is available to homebuyers enrolled in the New Jersey Housing and Mortgage Finance Agency’s Homeward Bound program who are buying homes in “Smart Growth Areas.” The program offers zero-interest down payment and/or closing cost assistance for up to 4 percent of the first mortgage amount, with loan forgiveness for buyers who remain in their home for five years.

If you still plan on buying your first home in New Jersey, GOBankingRates also found the best city in New Jersey to buy a home.

49. South Carolina

• Foreclosure Rate: 1 in 1,120
• First-Time Homebuyer Share: 49 percent
• Median List Price: $225,00

First-time homebuyers account for less than half the mortgage market of South Carolina. And although the state’s median list price is just above the U.S. median — $213,146 — South Carolina has one of the highest foreclosure rates in the U.S.

Residents can apply for SC Housing’s First-Time Homebuyers program and qualify for up to $6,000 in down payment assistance.

48. North Carolina

• Foreclosure Rate: 1 in 1,467
• First-Time Homebuyer Share: 48 percent (tied No. 5 lowest)
• Median List Price: $235,000

Foreclosure rates are particularly high in the counties of Onslow and Jones. Much of the most affordable housing is in preforeclosure, which is generally considered the most difficult stage to buy a distressed home, according to Zillow.

First-time homebuyers can apply for the NC Home Advantage Mortgage Program, which can include down payment assistance and a mortgage credit certificate for savings of up to $2,000 a year.

Also See: Tax Breaks Every First-Time Homebuyer Must Know About

47. Delaware

• Foreclosure Rate: 1 in 836 (No. 2 highest)
• First-Time Homebuyer Share: 58 percent
• Median List Price: $269,900

Foreclosure rates in Delaware are among the highest in the country but are very uneven within the state. On the high end, Kent County experiences one foreclosure in 610 housing units, but Sussex County sees only one in more than 1,100 units. Residents looking for down payment assistance can apply for Delaware’s First-Time Homebuyer Tax Credit as well as its Advantage 4 Grant program.

46. Vermont

• Foreclosure Rate: 1 in 7,167 (No. 3 lowest)
• First-Time Homebuyer Share: 40 percent (No. 1 lowest)
• Median List Price: $239,000

First-time homebuyers don’t seem to be big on purchasing a house in Vermont, as the state ranked the lowest for the first-time homebuyer share of the market. For those who do want to buy their first home in Vermont, the Vermont Housing Finance Agency has several programs that are open to all types of homebuyers, including MOVE, Advantage and MOVE Mortgage Credit Certificate. Vermont’s ASSIST program, which addresses down payments and closing costs, is only available for first-time homebuyers.

45. Oklahoma

• Foreclosure Rate: 1 in 1,690
• First-Time Homebuyer Share: 47 percent (tied No. 4 lowest)
• Median List Price: $174,990

First-time homebuyers take up less than half of Oklahoma’s share of homes, but they stand to benefit from a median list price that is well below the U.S. median. There are several homebuying programs in Oklahoma, such as the Oklahoma Housing Finance Agency’s (OHFA) Dream program and the OHFA Gold program, specifically for first-time buyers.

44. Oregon

• Foreclosure Rate: 1 in 2,222
• First-Time Homebuyer Share: 50 percent
• Median List Price: $329,900

Oregon’s median list price has grown by more than 60 percent — according to Zillow, the median home value in March 2013 was $204,000 — in the last five years. To make buying a home more achievable, first-time homebuyers can apply for Oregon Housing and Community Services Agency programs such as Cash Advantage, which offers low fixed rates plus cash assistance, and Rate Advantage, which offers below-market interest rates on mortgages.

43. Iowa

• Foreclosure Rate: 1 in 2,273
• First-Time Homebuyer Share: 45 percent (No. 2 lowest)
• Median List Price: $164,900

With the eighth-cheapest median list price, Iowa provides an affordable setting for buying your first home, although first-time homebuyers are a minority in the market. You can take advantage of programs through Iowa Finance Authority, such as the Homes for Iowans and Homes for Iowans Plus programs. First-time homebuyers, specifically, can apply for Iowa’s FirstHome and FirstHome Plus programs.

42. Hawaii

• Foreclosure Rate: 1 in 3,677
• First-Time Homebuyer Share: 55 percent
• Median List Price: $595,000 (No. 1 highest)

Hawaii easily takes first place for the most expensive housing in the U.S. If you’re looking to buy your first home in Hawaii, some help might be available. Hawaiian first-time homebuyers can apply for the Down Payment Assistance Loan program offered through the Hawaii HomeOwnership Center.

41. Maine

• Foreclosure Rate: 1 in 2,464
• First-Time Homebuyer Share: 47 percent (tied No. 4 lowest)
• Median List Price: $219,000

Looking at housing affordability by state, Maine’s median list price is appealing, costing just over the U.S. median. Maine homebuyers can apply to the First Home Loan Program or the Salute ME Program, which is for active-duty military and veterans.

40. Colorado

• Foreclosure Rate: 1 in 4,527
• First-Time Homebuyer Share: 49 percent
• Median List Price: $390,000 (No. 4 highest)

Housing costs have risen substantially over the years in Colorado. To help manage high housing costs, homebuyers in Colorado can apply for programs through the Colorado Housing and Finance Authority (CHFA), including CHFA SmartStep and CHFA HomeOpener.

39. Alabama

• Foreclosure Rate: 1 in 1,438
• First-Time Homebuyer Share: 51 percent
• Median List Price: $180,000

Alabama’s median list price is more than $30,000 less than the national median, which is a boon for first-time homebuyers. Alabama first-timers can apply for the Step Up mortgage program if their annual household income doesn’t exceed $97,300, according to the Alabama Housing Finance Authority.

38. Montana

• Foreclosure Rate: 1 in 6,277 (No. 5 lowest)
• First-Time Homebuyer Share: 46 percent (tied No. 3 lowest)
• Median List Price: $290,000

Montana has one of the lowest foreclosure rates, which bodes well for first-time homebuyers. First-time homebuyers, however, make up less than half the market. For Montana residents, first-time homebuyers are eligible for the 80% Combined Program offered by the Montana Board of Housing, as well as a special Habitat for Humanity loan program if you meet designated criteria.

37. Illinois

• Foreclosure Rate: 1 in 1,011 (No. 3 highest)
• First-Time Homebuyer Share: 58 percent
• Median List Price: $209,900

First-time homebuyers form the majority of the housing market in Illinois, but the rate of foreclosures is a red flag. First-time homebuyer programs include 1stHomeIllinois, provided by the Illinois Housing Development Authority.

36. Wyoming

• Foreclosure Rate: 1 in 2,391
• First-Time Homebuyer Share: 49 percent
• Median List Price: $235,000

The median list price in Wyoming has increased by about 26 percent in the last five years, from $187,000 in March 2013 to $235,000 as of March 2018. The Wyoming Community Development Authority offers loan programs for first-time homebuyers, such as its First-Time Homebuyer Program and Spruce Up Wyoming Programs, which finances costs to purchase and rehabilitate substandard housing.

35. Florida

• Foreclosure Rate: 1 in 1,395
• First-Time Homebuyer Share: 56 percent
• Median List Price: $274,940

In terms of foreclosures, Florida ranks among the worst states to buy a home, with the ninth-highest rate of foreclosures in the study. If you’re a first-time homebuyer in Florida, check out Florida Housing’s First Time Homebuyer Program to see if you qualify — you might need all the assistance you can get to make your paycheck stretch further.

34. Arkansas

• Foreclosure Rate: 1 in 2,530
• First-Time Homebuyer Share: 47 percent (tied No. 4 lowest)
• Median List Price: $155,000 (No. 4 lowest)

Measuring housing affordability by state, Arkansas is one of the best states for homebuyers thanks to its cheap median list price. However, this hasn’t translated to more first-time homebuyers settling in the state.

If you’re willing to pay a higher interest rate on your first mortgage, the Arkansas Development Finance Authority’s Move-Up Choice loan program provides a grant of 4 percent of the loan amount that you can put toward closing costs or a down payment.

33. Kentucky

• Foreclosure Rate: 1 in 2,730
• First-Time Homebuyer Share: 47 percent (tied No. 4 lowest)
• Median List Price: $165,000

Kentucky offers affordable housing, and home prices here have risen modestly, not sharply, in the last five years. Despite this, Kentucky’s share of first-time homebuyers in the housing market is less than 50 percent, among the lowest of the 50 states.

Programs can make Kentucky even more affordable to first-time homebuyers. The Kentucky Housing Corporation offers two programs for funding home loans: Secondary Market Funding Source and MRB Funding Source.

32. Arizona

• Foreclosure Rate: 1 in 1,667
• First-Time Homebuyer Share: 54 percent
• Median List Price: $260,000

Perhaps because of the fallout caused by the housing bubble, Arizona’s median list price has risen gradually over the years. The Arizona Finance Authority offers the HOME Plus Home Loan Program, which provides a 30-year fixed-rate mortgage and down payment assistance to qualifiers.

31. Tennessee

• Foreclosure Rate: 1 in 2,250
• First-Time Homebuyer Share: 50 percent
• Median List Price: $209,000

Tennessee has cheaper living expenses than most states, which is a big help for first-time homebuyers. Combined with applying for a Great Choice Home Loan program offered by the Tennessee Housing Development Agency, homebuyers really can make Tennessee work with their housing budgets.

30. Idaho

• Foreclosure Rate: 1 in 3,807
• First-Time Homebuyer Share: 49 percent
• Median List Price: $253,990

Idaho Housing offers several mortgage products, including conventional loans, Rural Development loans in rural areas, FHA loans and VA loans.

29. Wisconsin

• Foreclosure Rate: 1 in 2,747
• First-Time Homebuyer Share: 49 percent
• Median List Price: $184,900

Wisconsin’s median list price is about $30,000 cheaper than the U.S. median. Yet, the state has never taken off as a place for first-time homebuyers, with the share of the market hovering around, but usually below, 50 percent.

When it comes to affordable mortgage solutions, the Wisconsin Housing and Economic Development Authority offers several home loan programs with income and loan limits that allow for more borrowers to qualify, including WHEDA Advantage and First Time Home Buyer Advantage specifically for first-time buyers.

28. Minnesota

• Foreclosure Rate: 1 in 2,356
• First-Time Homebuyer Share: 52 percent
• Median List Price: $239,999

Increasing foreclosure rates led Minnesota to go from No. 9 in 2017 to No. 28 in 2018 for the best states to buy a home for the first time. Minnesota has programs such as its Start Up Program, which offers affordable interest rates and down payment and closing cost assistance loan options.

27. Alaska

• Foreclosure Rate: 1 in 2,813
• First-time Homebuyer Share: 52 percent
• Median List Price: $270,000

Although Alaska’s median list price is above the U.S. median, it has increased only 8 percent over the last four years. There are two programs to support first-time homebuyers: one for tax-exempt buyers and the other for taxable first-time homebuyers.

26. Nebraska

• Foreclosure Rate: 1 in 2,668
• First-Time Homebuyer Share: 50 percent
• Median List Price: $187,000

The median list price in Nebraska has increased by $58,000 over the last three years, but at $187,000, it is still $26,000 less than the national median price. Nebraska first-time homebuyers can apply for the Homebuyer Assistance Program through the Nebraska Investment Finance Authority.

25. Indiana

• Foreclosure Rate: 1 in 1,660
• First-Time Homebuyer Share: 53 percent
• Median List Price: $149,999 (No. 3 lowest)

When comparing housing affordability by state, the only two to beat Indiana’s median list price are Ohio and West Virginia. First-time homebuyers in Indiana can also enjoy one of the cheapest costs of living in the nation.

First-time homebuyers in Indiana have several programs offered by the Indiana Housing and Community Development Authority to check out, including the Affordable Home, My Home and Next Home programs.

24. Maryland

• Foreclosure Rate: 1 in 1,069 (No. 4 highest)
• First-Time Homebuyer Share: 63 percent (tied No. 3 highest)
• Median List Price: $291,204

Maryland has been a popular state for first-time homebuyers over the years. Since 2011, their share of the mortgage market has surpassed 60 percent. At the same time, however, housing costs aren’t cheap.

First-time homebuyers in Maryland can take advantage of several loan products provided by the Maryland Mortgage Program, including the conventional program for a 30-year, fixed-rate mortgage with down payment assistance.

23. Kansas

• Foreclosure Rate: 1 in 3,404
• First-Time Homebuyer Share: 48 percent (tied No. 5 lowest)
• Median List Price: $159,900

It’s hard to beat Kansas when it comes to affordable housing — something first-time homebuyers can’t help but notice. The median list price remains one of the cheapest in the country.

Kansas hasn’t developed into a hotspot for first-time homeowners, but you can find loan programs to fit your needs. The Kansas Housing Resources Corporation offers the First Time Homebuyer Program for those eligible, which provides assistance for down payment and closing costs.

22. New Mexico

• Foreclosure Rate: 1 in 1,386
• First-Time Homebuyer Share: 57 percent
• Median List Price: $212,900

First-time homebuyers will like New Mexico’s median home price, which is cheaper than the national median.

First-time homebuyers can apply for New Mexico’s First Home Program and Next Home Program. Additionally, you can apply for the state’s First Down Program in conjunction with the First Home Program.

21. South Dakota

• Foreclosure Rate: 1 in 11,082 (No. 1 lowest)
• First-Time Homebuyer Share: 46 percent (tied No. 3 lowest)
• Median List Price: $209,000

South Dakota boasts the lowest rate of foreclosures in the U.S. And even though housing is cheaper than the national median list price, South Dakota hasn’t proved to be a state for first-time homebuyers.

The South Dakota Housing Development Authority offers its First-Time Homebuyer Program for those who meet income limits, housing unit criteria and a home purchase price of less than $250,200.

20. North Dakota

• Foreclosure Rate: 1 in 10,824 (No. 2 lowest)
• First-time Homebuyer Share: 47 percent (tied No. 4 lowest)
• Median List Price: $239,800

As with its neighbor to the south, North Dakota’s minimal foreclosure rate is comforting for homebuyers. Also like South Dakota, however, its share of first-time homebuyers has dropped below 50 percent.

Low- to moderate-income first-time homebuyers can apply for the FirstHome Program, offered by the North Dakota Housing Finance Agency. The agency also offers a housing rehab product, Major Home Improvement Program, for low- to moderate-income households to buy and refurbish a single-family home.

19. Ohio

• Foreclosure Rate: 1 in 1,289
• First-Time Homebuyer Share: 56 percent
• Median List Price: $144,900 (No. 1 lowest)

First-time homebuyers won’t find a cheaper median home price than in Ohio — for now, at least. The median list price is more than $68,000 less than the U.S. median.

The Ohio Housing Finance Agency offers several first-time homebuyer loan options. USDA, VA and conventional loans require a 640 minimum credit score and FHA loans require a minimum of 660.

18. Nevada

• Foreclosure Rate: 1 in 1,117 (No. 5 highest)
• First-Time Homebuyer Share: 62 percent (No. 4 highest)
• Median List Price: $269,900

After being hard hit in the housing crash, Nevada housing has recovered to a degree, with the median list price growing by 37 percent in the last three years. Nevada’s share of first-time homebuyers has increased by double digits since 1996, but it also has one of the highest foreclosure rates in the country, which keeps the state from ranking among the best states for homebuyers.

The Nevada Housing Division offers home financing through its Home Is Possible programs, which provide money for down payment or closing costs.

17. Texas

• Foreclosure Rate: 1 in 2,637
• First-Time Homebuyer Share: 53 percent
• Median List Price: $263,000

Texas offers plenty of opportunities for first-time homebuyers, especially in business — the state is home to the best cities for entrepreneurs, found a separate GOBankingRates study. If you’re a first-time homebuyer and want to secure the best interest rates on a mortgage, check out My First Texas Home, offered by the Texas Department of Housing and Community Affairs. The program also includes down payment and closing cost assistance.

16. Utah

• Foreclosure Rate: 1 in 2,535
• First-Time Homebuyer Share: 55 percent
• Median List Price: $315,000

Over the last four years, Utah’s median list price has grown by almost a third. It’s tough to say what effect this could have on first-time homebuyers, whose share of Utah’s mortgage market peaked at more than 60 percent in 2009 and 2010.

Utah residents can apply for the FirstHome Loan Program offered by the Utah Housing Corporation, where borrowers can put 6 percent of their loan amount toward paying for a down payment and closing costs.

15. Missouri

• Foreclosure Rate: 1 in 2,356
• First-Time Homebuyer Share: 51 percent
• Median List Price: $159,850 (No. 5 lowest)

In terms of housing affordability by state, Missouri is among the top states for the lowest median list price. Missouri homebuyers can apply for first-time buyer programs such as the First Place Loan Program and Mortgage Credit Certificate program to make buying a house even more affordable.

14. New Hampshire

• Foreclosure Rate: 1 in 3,476
• First-Time Homebuyer Share: 53 percent
• Median List Price: $269,900

Homebuyers can get some assistance through New Hampshire Housing, which offers a number of homebuying programs, including its Home Preferred program as well as its Home Flex program. The latter program can get you money to cover a down payment and closing costs.

13. Connecticut

• Foreclosure Rate: 1 in 1,462
• First-Time Homebuyer Share: 61 percent (tied No. 5 highest)
• Median List Price: $299,900

Though housing costs are above average, Connecticut has been a popular state for first-time homebuyers since 1996, benefiting from nearby major cities and access to job opportunities. First-time homebuyer programs can help alleviate the burden of Connecticut’s high cost of living.

The Connecticut Housing Finance Authority offers a range of home loan products that first-time homebuyers can take advantage of, including its conventional Homebuyer Mortgage Program as well as special programs for military, teachers, police and disabled persons.

12. California

• Foreclosure Rate: 1 in 2,179
• First-Time Homebuyer Share: 63 percent (tied No. 3 highest)
• Median List Price: $494,500 (No. 2 highest)

First-time homebuyers have formed a major part of California’s market for many years, and their share actually exceeded 70 percent in 2009 and 2010. Housing is expensive, but California residents can apply for the CalPLUS Conventional Program and CalPlus FHA Program to help manage the cost of buying a home. These loan options have zero-interest programs if you qualify.

Did You Know: 13 Ways California Real Estate Differs From Every Other State

11. Virginia

• Foreclosure Rate: 1 in 2,250
• First-Time Homebuyer Share: 57 percent
• Median List Price: $289,000

Virginia homes have a price tag above the U.S. median. Fortunately, first-time homebuyers have several financing programs they can qualify for, such as the Down Payment Assistance Program and Neighborhood Stabilization Program. You can also apply for home loans through the Virginia Housing Development Authority, such as the Fannie Mae HFA Preferred with Reduced Mortgage Insurance and Fannie Mae 97% No Mortgage Insurance.

10. Massachusetts

• Foreclosure Rate: 1 in 2,285
• First-Time Homebuyer Share: 61 percent (tied No. 5 highest)
• Median List Price: $409,900 (No. 3 highest)

Like Connecticut, Massachusetts has been a stronghold of first-time homebuyers for many years. Housing expenses are high, with the median list price above $400,000. The MassHousing loan program offers affordable interest rates and 30-year repayment terms.

Want to Invest in Real Estate? Buy a Condo in One of the Best Cities

9. Georgia

• Foreclosure Rate: 1 in 2,159
• First-Time Homebuyer Share: 56 percent
• Median List Price: $220,725

Since 1996, Georgia has developed a sizable population of first-time homebuyers, rising from a market share of 43 percent to 56 percent. First-time homebuyers can apply for the Georgia Dream Homeownership Program, and must meet income and home purchase price limits.

8. Washington

• Foreclosure Rate: 1 in 3,661
• First-Time Homebuyer Share: 56 percent
• Median List Price: $329,394

Since 1996, Washington has grown dramatically as a state for first-time homebuyers. Washington’s median sale price also grew by more than 40 percent over the last five years.

Washington has a few programs that first-time homebuyers can apply for, such as its Home Advantage Program.

7. Louisiana

• Foreclosure Rate: 1 in 2,301
• First-Time Homebuyer Share: 55 percent
• Median List Price: $198,000

Louisiana has steadily increased its share of first-time homebuyers since 1996 so that they now form a majority of the mortgage market. Louisiana homebuyers can take advantage of home loan programs such as the LHC Preferred Conventional Program and Market Rate GNMA Program through the Louisiana Housing Corporation.

6. Michigan

• Foreclosure Rate: 1 in 2,748
• First-Time Homebuyer Share: 54 percent
• Median List Price: $155,000 (tied No. 4 lowest)

If you’re a first-time homebuyer, Michigan is one of the best states to buy a home because of low foreclosure rates and very affordable housing.

First-time homebuyers are eligible for Michigan State Housing Development Authority’s MI Home Loan program, which includes down payment assistance of up to $7,500.

5. Pennsylvania

• Foreclosure Rate: 1 in 1,731
• First-Time Homebuyer Share: 59 percent
• Median List Price: $189,400

Since 2007, first-time homebuyers have formed the majority of the mortgage market in Pennsylvania. Combined with a relatively cheap median list price of $189,400, and the fact that it is less expensive to own a home than to rent, Pennsylvania comes in as the No. 5 best state for first-time homebuyers.

In terms of financing, first-time homebuyers can apply for a Pennsylvania HFA home loan. In addition to 30-year, fixed-rate terms, you potentially can receive assistance with the down payment and closing costs, as well as save up to $2,000 a year when you qualify for the Mortgage Tax Credit Certificate.

4. Mississippi

• Foreclosure Rate: 1 in 3,490
• First-Time Homebuyer Share: 54 percent
• Median List Price: $169,000

Mississippi has one of the lowest foreclosure rates in the nation, and $169,000 is still one of the cheapest median list prices in the country — it’s roughly $44,000 less than the U.S. median.

Residents of Mississippi can get affordable homebuying programs offered by Mississippi Home Corporation such as its Smart Solution Mortgage, which provides first-time homebuyers with the ability to claim 40 percent of their mortgage interest as a tax credit on income taxes.

3. New York

• Foreclosure Rate: 1 in 1,684
• First-Time Homebuyer Share: 65 percent (No. 2 highest)
• Median List Price: $349,900 (No. 5 highest)

New York traditionally has been a state with a high proportion of first-time homebuyers. Almost two-thirds of the mortgage market is first-time homebuyers. Although housing can get costly in some regions of the state, New York offers many more affordable markets than equally expensive states in New England.

First-time homebuyers in New York can qualify for several programs, including the Conventional Plus Program; RemodelNY Program, for people interested in buying homes that need renovation; Achieving the Dream Program, for low-income buyers; Low Interest Rate Program and many others.

2. West Virginia

• Foreclosure Rate: 1 in 6,384 (No. 4 lowest)
• First-Time Homebuyer Share: 52 percent
• Median List Price: $149,900 (No. 2 lowest)

West Virginia boasts the fourth-lowest rate of foreclosures in the nation. Adding to the state’s appeal for first-time homebuyers is its $149,900 median list price — the second-lowest in the nation. The state’s low cost of living boosts housing affordability as well. It’s one of the states where you can buy the largest home for $300,000, found a separate GOBankingRates study.

The West Virginia Housing Development Fund offers its Homeownership Program to borrowers who have a gross income that falls within county income limits, are buying a home within a certain price limit and have not owned a home within the last three years in specific counties.

1. Rhode Island

• Foreclosure Rate: 1 in 2,682
• First-Time Homebuyer Share: 67 percent (No. 1 highest)
• Median List Price: $279,600

For first-time homebuyers, Rhode Island is the best state to buy a home. People shopping for their first home will find a strong presence of fellow first-time homebuyers as Rhode Island has the highest share of them in the mortgage market.

The median list price is above the national median, however, so getting an affordable home loan is important. Rhode Island Housing offers the Down Payment Assistance Program for first-time homebuyers. To be eligible, your annual household income must be less than $87,360 (for a one- to two-person household), the maximum loan limit is $431,250 and the property must be in one of six select communities.

Best and Worst States for First-Time Homebuyers

This GOBankingRates study found that the best and worst states for first-time homebuyers seem to be clustered along the East Coast. Of the five worst states for first-time homebuyers, four are on the East Coast (the only outlier is Vermont, which is located in New England). Of the five best states for first-time homebuyers, two are on the East Coast.

Here are the five worst states to buy your first home:

1. New Jersey
2. South Carolina
3. North Carolina
4. Delaware
5. Vermont

Here are the five best states for first-time homebuyers:

1. Rhode Island
2. West Virginia
3. New York
4. Mississippi
5. Pennsylvania

Click through to read more about the best and worst cities for first-time homebuyers.

More on Investing in Real Estate

• The Best and Worst Cities to Own Investment Property
• This Is the Salary You Need to Afford the Average Home in Your State
• The 15 Best and Worst Places to Live If You’re Trying to Save Money
• Watch: Paying a Home Mortgage Is Actually Cheaper Than Renting in These Cities

We make money easy. Get weekly email updates, including expert advice to help you Live Richer™.

Gabrielle Olya contributed to the reporting of this article.

Methodology: States were ranked according to three factors, including 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 by first-time homebuyers, sourced from FHFA; and 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.