The 15 best US states for first-time homebuyers

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Iowa has one of the highest millennial homeownership rates at 44%.
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Katie Haugland Bowen/Flickr

The narrative that millennials are eschewing all of the traditional habits of their parents is simply a myth, particularly when it comes to homebuying.

In fact, 65% of millennials still consider buying a home part of the American Dream, more than any other generation.

But burdensome student loan debt, high rent prices, and low wages are affecting their ability to save up for a down payment, contributing to the lowest homeownership rate in the US in decades.

Still, these factors vary across cities and states, and there are some places where it’s more attainable for first-time buyers to enter the market.

New data from Bankrate discovered how first-time homebuyers fare in all 50 US states considering five factors:

    Housing affordability: percentage of median household income for 25- to 44-year-olds that goes toward mortgage payments (using the median sale price) Entry-level job market: five-year average unemployment rate for 25- to 34-year-olds Market tightness: growth in housing stock from 2010 to 2015 and the percentage of homes for sale Credit availability: percentage of home loans rejected by credit lenders Millennial homeownership rate: percentage of homeowners under 35

Bankrate weighted each category equally to determine its ranking. States in the Midwest and the non-coastal West proved to be the most accommodating to first-time homebuyers, while California, New York, and Hawaii are the toughest states.

Below, check out the 15 states where it’s easiest to become a homeowner.

The metrics included below were all used to calculate Bankrate’s ranking, with the exception of median home value, which was sourced independently from Zillow.


15. Alaska

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iStock/BrianLasenby

Percent of median income toward mortgage : 20.1%

Unemployment rate: 7.2%

Under 35 homeownership rate: 35.5%

Median home value: $267,000


14. Oklahoma

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iStock

Percent of median income toward mortgage: 14.6%

Unemployment rate: 5.5%

Under 35 homeownership rate: 37.6%

Median home value: $114,400


13. Montana

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Hannah Lorsch/Shutterstock

Percent of median income toward mortgage: 23.5%

Unemployment rate: 5.2%

Under 35 homeownership rate: 34.3%

Median home value: $197,900


12. Indiana

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City of Huntington-Current Information/Facebook

Percent of median income toward mortgage: 15%

Unemployment rate: 6.7%

Under 35 homeownership rate: 40.5%

Median home value: $119,500


11. Idaho

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Charles Knowles/Flickr

Percent of median income toward mortgage: 21.2%

Unemployment rate: 5.4%

Under 35 homeownership rate: 39.2%

Median home value: $183,000


10. Nebraska

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Scruggelgreen/Shutterstock

Percent of median income toward mortgage: 13.9%

Unemployment rate: 3.8%

Under 35 homeownership rate: 38.4%

Median home value: $146,400


9. Vermont

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Jay Yuan/Shutterstock

Percent of median income toward mortgage: 16.9%

Unemployment rate: 4.4%

Under 35 homeownership rate: 33.8%

Median home value: N/A


8. Wyoming

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Jerry Sanchez/Shutterstock

Percent of median income toward mortgage: 18.3%

Unemployment rate: 4.5%

Under 35 homeownership rate: 41.5%

Median home value: $194,000


7. South Dakota

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Sopotnicki/Shutterstock

Percent of median income toward mortgage: 17.6%

Unemployment rate: 3.3%

Under 35 homeownership rate: 42%

Median home value: $172,100


6. North Dakota

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Wikimedia Commons

Percent of median income toward mortgage: 17.2%

Unemployment rate: 3%

Under 35 homeownership rate: 37.1%

Median home value: $203,100


5. Missouri

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Stuart Seeger/Flickr

Percent of median income toward mortgage: 16.4%

Unemployment rate: 5.6%

Under 35 homeownership rate: 38.7%

Median home value: $139,800


4. Kansas

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City of Wichita-Government/Facebook

Percent of median income toward mortgage: 17.7%

Unemployment rate: 4.5%

Under 35 homeownership rate: 37.3%

Median home value: $124,000


3. Minnesota

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Scruggelgreen/Shutterstock

Percent of median income toward mortgage: 16.5%

Unemployment rate: 4.4%

Under 35 homeownership rate: 45%

Median home value: $202,800


2. Utah

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f11photo/Shutterstock

Percent of median income toward mortgage: 21.8%

Unemployment rate: 3.4%

Under 35 homeownership rate: 44%

Median home value: $242,300


1. Iowa

source
Katie Haugland Bowen/Flickr

Percent of median income toward mortgage: 13.1%

Unemployment rate: 4.6%

Under 35 homeownership rate: 44.1%

Median home value: $138,200