The Boston metro area is emerging as a surprising market for first-time homebuyers, according to a recent report by the National Association of Realtors Research Group. Despite Boston’s high median list price of $949,000, approximately 41% of homes in the region are valued below $550,000. This figure surpasses the national average of 38.9%.
Starter homes are typically priced at 85% of the area’s median-priced home and are crucial for new buyers entering the housing market. “People buying under $550,000 will include first-time homebuyers, relocators and downsizers, investors, and Boston’s working class/immigrants,” says Bianca D’Alessio from The Masters Division at Nest Seekers International.
Boston is not alone in this trend; several other cities also show promise for affordable starter homes. These cities have been evaluated based on criteria such as mortgage rates, job growth, and millennial renters’ ability to afford homeownership.
Charlotte-Concord-Gastonia in North Carolina-South Carolina boasts a share of starter homes at 43.5%, with a median list price of $425,000. The area has experienced significant job growth over the past five years.
Grand Rapids-Kentwood in Michigan offers affordability with a median list price of $319,900 and nearly 40% of its housing stock categorized as starter homes.
Greenville-Anderson in South Carolina benefits from strong net migration and affordability with a median list price of $269,900.
Hartford-East-Hartford-Middletown in Connecticut presents an appealing financing environment with one of the lowest mortgage rates among top markets.
Indianapolis-Carmel-Anderson in Indiana provides nearly 42% starter homes priced below $236,000 due to strong job growth and housing affordability.
Kansas City across Missouri-Kansas is noted for its affordability among millennial renters with competitive financing conditions.
Knoxville in Tennessee attracts long-term residents with significant wealth gains seen post-pandemic.
Phoenix-Mesa-Chandler in Arizona remains attractive despite slightly higher locked-in owner percentages due to its lower cost compared to California.
San Antonio-New Braunfels in Texas offers low mortgage rates combined with strong job growth making it appealing for potential buyers next year.
These cities collectively provide more accessible options for first-time buyers than many other areas across the country.
