According to the Zillow Home Price Index, the median home price in the U.S. is $226,300 and the projected one-year change in home value is 5.1 percent. However, home prices (and salaries) vary significantly across different locations. States and cities in the Northeast and the West Coast usually have higher salaries, but housing inventory is comparatively scarce and therefore commands disproportionately higher prices. Instead, the best states for homeownership tend to be located in the South and Midwest due to lower housing and living costs compared to incomes.
The chart below shows the results for small and midsize cities, underscoring that the South and Midwest are optimal locations for first-time home buyers.
The final analysis only includes the results for large cities. Here are the most affordable large cities for first-time home buyers.