These are the best housing markets for first-time homebuyers in 2025

2025 U.S. real estate predictions

Zillow predicted a more active market with additional inventory for 2025, giving buyers more room to negotiate. However, homebuyers should expect some turbulence with fluctuating mortgage rates, even as more homes become available. Alana Mann, President of The Statesman Group of Companies, joined LiveNOW from FOX to discuss.

If you’re looking to buy your first home, you may want to consider these markets.

SmartAsset ranked 180 of the largest U.S. metro areas based on a variety of factors that could influence the buying process and long-term payoff for first-time homebuyers. 

These metrics included affordability relative to local median incomes, the level of housing inventory and demand for that inventory, projections of home-price growth and the relative population of residents in their 20s and 30s.

Best housing market for first-time homebuyers is in Texas

By the numbers:

The data found that McAllen, Texas was the best metro area for first-time homebuyers in 2025. 

After ranking fourth last year, McAllen replaced Lawton, Oklahoma as the number one metro area. 

According to the data, McAllen offered positive projected home-price growth over the next year, moderate affordability with the median sale price of $204,499, and a market that allows potential buyers to take their time to make a decision before putting in an offer. 

A "For Sale" sign in front of a home in San Jose, California, US, on Thursday, Sept. 5, 2024. (Credit: David Paul Morris/Bloomberg via Getty Images)

Meanwhile, Peoria and Decatur, Illinois ranked first and second in the affordability metric, with local home sale prices averaging about twice the amount of the median annual income. 

Davenport, Iowa; Springfield, Illinois; Lawton, Oklahoma; Cedar Rapids, Iowa; St. Joseph, Missouri; and Muncie, Indiana metros were also among the least expensive.

Best housing markets for first-time homebuyers

First-time homebuyers are oldest on record

Dig deeper:

Last year, a survey found that first-time homebuyers are now the oldest on record.

The median age of 38 years old for new homebuyers was up from 35 years old the year prior and represented an increase from the 1980s when first-time homebuyers were in their late 20s, the National Association of Realtors' (NAR) annual survey of buyers and sellers noted. 

RELATED: First-time homebuyers are older than ever before, National Association of Realtors survey finds

Another study published last year found that nearly 41% of first-time homebuyers are less aware of the costs associated with owning a home.

The cost of home improvements was the most surprising for study respondents, with 43% of younger homeowners ages 18 to 24 reporting being uncomfortable with the amount they had to spend within the first six months of owning their home.