Best U.S. cities for young adults looking to buy their first home

Smaller U.S. towns in the Northeast have the most affordable options for young adults looking to buy their first home, according to new real estate data. 

Communities such as Somersworth, New Hampshire, and Windsor Locks, Connecticut, are ever more attractive to 25-to-34-year-olds because they offer plenty of restaurants and are within a 30-minute commute of a larger metropolitan area, a new study from Realtor.com found. 

"The Northeast offers affordability once you move outside of the bigger cities," Realtor.com Chief Economist Danielle Hale told CBS MoneyWatch. "Homes get affordable very quickly as opposed to the West, and this year affordability is top of mind for buyers."

A dearth of affordable housing has been a problem for years in the U.S., exacerbated last year by a huge jump in mortgage rates as the Federal Reserve sought to curb inflation. Although that had deterred many people from plunging into the market, millions barreled ahead and bought homes last year, even as the average interest rate for a home loan shot up past 7% at one point, U.S. Census data shows. 

According to Realtor.com, the top 10 markets for first-time homebuyers, with median listing prices included, in 2023 are:

1. Portsmouth, Virginia ($239,900)
2. DeForest, Wisconsin ($138,900)
3. Windsor Locks, Connecticut ($259,900)
4. Gloucester City, New Jersey ($180,000)
5. Moore, Oklahoma ($228,000)
6. Magna, Utah ($399,450)
7. Eggertsville, New York ($249,950)
8. Watervliet, New York ($192,500)
9. Mattydale, New York ($128,700)
10. Somersworth, New Hampshire ($310,000)

Although young adults have flocked to big cities in recent decades in pursuit of jobs and excitement, after years of renting many of them began looking for a change. First-time homebuyers increasingly realize that it's convenient to live near — but not in — major cities, Hale said. 

"When it comes to buying, it's kind of hard to stay downtown and get your foot in the door for buying a home," she said. "These are places within the big metros that have good things going on economically."

The number of homes available for sale in the 10 markets above is likely to climb this year, said Realtor.com, which expects unemployment in those areas to stay below 4% even as the broader U.S. economy flirts with recession. 

In a separate list, Zillow said the best markets for first-time homebuyers include Wichita, Kansas; Little Rock, Arkansas; and Toledo, Ohio. Those cities offer residents relatively lower rent, which in turn allows them to save for a down payment on a home much faster, the real estate firm said. 

Zillow's list of top markets for first-time homebuyers: 

1. Wichita, Kansas
2. Toledo, Ohio
3. Syracuse, New York
4. Akron, Ohio
5. Cleveland, Ohio
6. Tulsa, Oklahoma
7. Detroit, Michigan
8. Pittsburgh, Pennsylvania
9. St. Louis, Missouri
10. Little Rock, Arkansas