The current housing landscape presents a paradox of opportunity and challenge for aspiring homeowners. While recent data indicates that first-time homebuyers now constitute a mere 21% of all transactions—the lowest share on record—and the median age of new homeowners has reached an unprecedented 40 years, there remain pockets of the country where the American dream remains attainable for younger generations. The MoveBuddha ‘Starter Home Index’ provides a crucial roadmap for those feeling priced out of competitive markets, highlighting where diligent saving and strategic planning can still lead to homeownership before middle age. This analysis comes at a particularly important moment, as potential buyers navigate an environment characterized by rising interest rates, competitive bidding wars in desirable areas, and economic uncertainty that makes major financial commitments feel increasingly daunting.
The declining share of first-time buyers represents a significant shift from historical norms and raises important questions about long-term wealth building in America. Traditionally, homeownership has been the primary vehicle for middle-class families to accumulate equity and create generational wealth. When individuals delay purchasing their first home, they miss out on decades of potential appreciation and mortgage paydown. The current median age of 40 for new homeowners means many are entering the market later than previous generations, potentially reducing the time they have to build substantial equity before retirement. This trend has profound implications for wealth inequality and financial stability across different socioeconomic groups, particularly affecting those who may never recover from delayed entry into the housing market.
Oklahoma City’s top ranking in the MoveBuddha analysis reveals a housing market that functions more traditionally than many of its coastal counterparts. The city’s homeowners spend just 20.4% of their income on mortgage payments, a figure that places housing comfortably within recommended affordability guidelines. This percentage represents not just financial relief but the freedom to save for other goals, invest in retirement accounts, or maintain a comfortable quality of life without being house-poor. Perhaps most striking is that 54% of Oklahoma City homeowners are under 35 years old—a statistic that stands in stark contrast to national trends and demonstrates that when housing costs align with local incomes, younger generations can successfully transition from renting to owning. This demographic breakdown suggests a thriving ecosystem where first-time buyers can enter the market and eventually move up, creating a healthy turnover that benefits all participants.
The ‘Starter Home Index’ methodology provides valuable insights into what truly makes a market accessible to first-time buyers, moving beyond simplistic affordability metrics. By evaluating three comprehensive categories—affordability, availability, and livability—the index captures the multifaceted nature of successful homeownersship. Affordability encompasses more than just purchase price; it includes property taxes, insurance costs, utility expenses, and maintenance—all of which can significantly impact the total cost of homeownership. Availability measures the actual inventory of starter homes relative to population, revealing whether supply can meet demand. Livability factors in quality of life elements including job markets, educational opportunities, and community amenities that contribute to long-term satisfaction with the location. Together, these metrics create a nuanced picture of where first-time buyers can establish roots not just for a few years, but potentially for decades.
Little Rock, Arkansas, and Des Moines, Iowa securing the second and third positions respectively highlights a broader pattern of success for mid-sized capital cities in the heartland. Both locations achieve the delicate balance of offering economic opportunity without the extreme cost pressures found in major metropolitan areas. Their high housing inventory suggests that construction and development have kept pace with population growth, preventing the artificial scarcity that drives prices upward in booming markets. The fact that mortgages in these cities require approximately 20% of income aligns with traditional lending standards and budgeting principles, making homeownership achievable for dual-income households and even some single-income earners with stable careers. These cities represent the sweet spot where economic opportunity exists within reasonable commuting distances, quality schools are accessible without premium pricing, and community amenities support a comfortable lifestyle without corresponding financial strain.
Austin, Texas’s remarkable performance in the availability category—securing the second spot nationwide—demonstrates that even in rapidly growing markets with strong economic fundamentals, thoughtful urban planning and development can create opportunities for first-time buyers. The Lone Star capital offers an impressive 645 starter home listings per 100,000 residents, a figure that reflects both construction activity and market dynamics that haven’t yet been completely overwhelmed by demand. This is particularly noteworthy given Austin’s status as a tech hub with rising incomes, which typically correlates with escalating housing costs. The city’s ability to maintain inventory despite its economic growth suggests that development policies, geographic considerations, and market timing have aligned to create an environment where entry-level housing remains accessible. Austin’s ranking challenges the narrative that all economically vibrant cities inevitably become unaffordable for young professionals and first-time buyers.
The dominance of Southern cities in the top ten rankings—particularly Birmingham, Alabama’s fifth-place finish—reveals compelling economic and demographic patterns reshaping American migration patterns. Seven of the top ten cities identified by MoveBuddha are concentrated in the South, a region historically associated with lower costs of living but often overlooked for economic opportunity. Birmingham’s inclusion in the top five is particularly significant, as it combines affordability with a strong 2.5% unemployment rate that suggests robust local job creation. This combination of economic opportunity and reasonable living costs represents the holy grail for first-time buyers: the ability to establish a career while building equity in a home. The South’s ascendancy in these rankings reflects broader trends of population migration from high-cost coastal areas to more affordable regions, as remote work capabilities and changing lifestyle priorities enable Americans to pursue different calculations of success and quality of life.
Pittsburgh’s sixth-place ranking offers a compelling case study in how post-industrial cities can leverage their unique characteristics to become attractive to first-time buyers. The Steel City achieves the impressive distinction of having the lowest mortgage cost relative to income among all American cities, with starter home mortgages requiring just 18% of monthly income. This remarkable affordability stems from Pittsburgh’s successful economic transformation from manufacturing to healthcare, education, and technology, combined with a housing stock that includes substantial inventory from its industrial peak. The city’s lower cost of living extends beyond housing to include transportation, groceries, and entertainment, creating a multiplier effect that makes overall financial management more manageable for young homeowners. Pittsburgh’s experience suggests that cities with substantial existing infrastructure, established communities, and successful economic reinvention can offer exceptional value to those willing to look beyond traditional coastal glamour.
The stark contrast between affordable markets like Oklahoma City and prohibitively expensive cities like Los Angeles—dead last in the ranking—illustrates the growing divide between America’s housing haves and have-nots. In Los Angeles, the average three-bedroom starter home requires nearly ten years of income to purchase, with monthly payments exceeding $4,700. This calculation doesn’t include property taxes, insurance, maintenance, or potential homeowners association fees, which could add hundreds or even thousands more to monthly housing costs. Such expense levels effectively remove homeownership from the realm of possibility for most Angelenos under 40, particularly those working in creative fields, service industries, or early-career positions. This disparity creates a two-tiered system where those fortunate enough to already own property benefit from appreciation and equity building, while younger generations face increasingly insurmountable barriers to entry, potentially widening wealth gaps across generations and communities.
The mortgage rate environment adds another critical dimension to the housing affordability equation, with implications that vary dramatically across different markets. While the MoveBuddha report focuses on purchase prices relative to income, the interest rate environment significantly impacts monthly payments and overall affordability. In markets where home prices represent a reasonable multiple of income, even modest increases in interest rates can be absorbed without making homeownership completely unattainable. However, in already expensive markets like Los Angeles, where prices require extraordinary multiples of income, even small interest rate increases can push monthly payments beyond the reach of all but the highest earners. This reality underscores why location choice becomes increasingly critical as interest rates rise, as the baseline affordability of a market determines how much cushion buyers have when financing costs increase.
Looking beyond the immediate snapshot provided by the MoveBuddha index, several long-term trends suggest that the housing affordability gap may continue to widen unless significant policy changes occur. Demographic shifts including aging population, changing household formations, and migration patterns toward more affordable regions will continue to reshape housing demand. Additionally, construction costs, labor shortages, and regulatory challenges all contribute to the complex equation of housing supply. The fact that first-time buyers now represent a smaller share of the market than at any time in recent history indicates a structural imbalance that cannot be resolved through temporary fixes. For younger generations, the implications are profound: without intervention, the path to homeownership may become increasingly dependent on family assistance, specialized programs, or geographic relocation—options that are not equally available across all socioeconomic groups.
For first-time homebuyers navigating this complex landscape, several strategic approaches can increase the likelihood of successful homeownership in 2025 and beyond. The most practical strategy involves broadening geographic search parameters to include cities that rank highly on affordability metrics like those identified by MoveBuddha. Many of these markets offer strong employment prospects, quality educational institutions, and vibrant cultural scenes that rival more expensive alternatives. Financial preparation should include not just saving for a down payment but also improving credit scores, minimizing existing debt, and establishing stable employment histories that demonstrate reliability to lenders. Additionally, buyers should consider different property types beyond traditional single-family homes, such as duplexes or townhomes that offer potential rental income to offset housing costs. Finally, leveraging first-time buyer programs, down payment assistance, and exploring different mortgage products can significantly improve affordability within any given market. The key is recognizing that homeownership remains achievable, but may require more creativity, flexibility, and preparation than in previous generations.
