LendingTree, an online loan marketplace, recently released its latest study on the best and worst metros for first-time homebuyers.

Lending Tree ranked the country’s 50 largest metros according to “friendliness” data points relevant to first-time homebuyers. Those data points included:

  • the average down payment amount
  • the average down payment percentage of the home’s purchase price
  • the average percentage of buyers using FHA financing
  • the average FHA down payment as a percentage of the average down payment for all loans
  • the percentage of buyers with credit scores under 680
  • the percentage of homes that is affordable to median income families in each respective metro.

Here are Lending Tree’s key takeaways regarding metros most and least friendly to first-time buyers:

Pittsburgh, Cleveland and Oklahoma City rank the highest across all 6 metrics used for this study.

Oklahoma City, Cleveland and Memphis have the lowest average down payment of $32,000. The average down payment in all 50 metros comes out to a bit more than $50,000.

Salt Lake City, Oklahoma City and San Antonio had an average down payment percentage of 14%, a full 2 percentage points lower across all 50 metros.

The largest share of homebuyers, 40%, in Birmingham AL, Detroit and Columbus OH used FHA financing for mortgage loans.

Detroit, Birmingham and Cleveland had the largest share of buyers with credit scores below 680.

Indianapolis, Cincinnati and Cleveland all had the largest share of homes affordable to median income families according to Housing Opportunity Index scores per each metro area.

LendingTree’s Best Metros for First-Time Buyers:

Pittsburg

  • average down payment – $34,049
  • average down payment percentage – 15%
  • percentage of buyers with credit scores below 680 – 41.3%
  • home affordability score – 78.4

Cleveland

  • average down payment – $32,775
  • average down payment percentage – 15R%
  • percentage of buyers with credit scores below 680 – 42.8%
  • home affordability score – 82.2

Oklahoma City

  • average down payment – $30,234
  • average down payment percentage – 13%
  • percentage of buyers with credit scores below 680 – 36.9%
  • home affordability score – 79

Cincinnati, Birmingham, Indianapolis, Columbus, Louisville, Detroit and Kansas City round out the Best Metros for first-time buyers.

LendingTree’s Worst Metros for First-Time Buyers 

Los Angeles

  • average down payment – $95,418
  • average down payment percentage – 18%
  • percentage of buyers with credit scores below 680 – 9.2%
  • home affordability score – 9.1

Denver

  • average down payment – $74,317
  • average down payment percentage – 19%
  • percentage of buyers with credit scores below 680 – 16.8%
  • home affordability score – 51.5

San Francisco

  • average down payment – $128,627
  • average down payment percentage – 21%
  • percentage of buyers with credit scores below 680 – 11.4%
  • home affordability score – 11.1

Now beginning the peak-buying season, “…the market should be more welcoming (to first-time buyers) than last year,” said Tendayi Kapfidze, LendingTree’s chief economist. Continuing, Kapfidze said, “Inventories have picked up a bit and home appreciation has slowed…after being in an upward trend for two years. These factors may act to draw more buyers into the market…”

For more information, please refer to

https://www.lendingtree.com/home/mortgage/best-cities-for-first-time-homebuyers/