The Top 10 U.S. Cities to Buy Your Starter Home—or Your Forever Home
Get ready for a real estate tsunami—two of ’em, in fact. America’s largest-ever generations, millennials and baby boomers, are entering their prime home-buying years at the same time! But while most millennials are prowling the market for affordable starter homes that will enable them to move out of Mom and Dad’s basement or finally trade in their apartment keys for deeds, older Americans are often seeking “forever homes” with amenities and flexible, universal designs that will enable them to seamlessly transition into their twilight years—and maybe even party like it’s1999. Or 1979.
Where are the top cities to find these different places? Realtor.com set out to find the best metros in America to find starter homes and forever homes.
So what defines each type of abode? More than anything else, it comes down to customer needs—where folks find themselves on the great home-buying journey of life. It isn’t just about age: After all, some folks wait until their 40s or 50s to buy their first home, while some young buyers opt for a starter home they intend to stay in, well, forever.
That said, there’s a reason why the ranks of both forever homes and starter homes are swelling exponentially right now. Millennials have waited longer than previous generations to settle down and buy homes, not always by choice—student debt and high home prices delayed pulling the trigger. But now that they’re getting married and having kids of their own, more and more are settling into their first homes, making them the nation’s largest group of buyers. And the biggest chunk of them are just now hitting their 30s!
On the other end of the spectrum are the retiring or downsizing baby boomers, searching for homes where they can age in place. Many are holding onto their careers longer, and 1 in 3 has yet to reach age 65. So they’re just now hitting the market en masse.
Homes for both groups tend to be smaller—under 2,000 square feet—and located in walkable areas. But in other respects there are some key differences.
Millennials “want to buy near their jobs and amenities. But affordability is the key factor—they are looking for something they can buy without getting over their head,” says Chris Porter, the chief demographer at John Burns Real Estate Consulting in Irvine, CA. “And boomers are retiring and moving to warm climates. … They want a home that requires less upkeep and in a walkable community.”
For both rankings, we looked at the 250 largest metropolitan areas.* We limited each ranking to one metro per state to ensure geographic diversity.
To find the top places for buying a starter home, we factored in these criteria**:
- Percentage of home buyers aged 35 and younger
- Percentage of typically more affordable homes under 2,000 square feet
- Median down payment (the lower, the better)
- Median mortgage borrower’s FICO score (the lower, the better)
- Percentage of income of those aged 35 and younger going toward median monthly housing costs
To find the top places for buying a forever home, we factored in these criteria**:
- Percentage of residents aged 60 and older
- Median list price
- Number of homes adapted for seniors, looking at realtor.com listings with keywords such as “universal design,” “ground-floor master suite,” “senior-friendly,” and “no-step entry”
- Ratio of home health aides per senior
- Number of folks aged 55 and older moving in
So let’s start out by taking a tour of the top spots for folks leaping into homeownership for the first time.
The top 10 places to buy a starter home
Median list price: $235,100
Share of buyers aged 35 and younger: 56%
Cracking open a seasoned crawfish is just a way of life in Lake Charles, about three hours west of New Orleans. But just a short drive from the Gulf of Mexico, this midsize city isn’t just about Cajun food. It also offers plenty of gigs at all levels, giving young workers the cash they need to buy that affordably priced first home.
“We’re more of a blue-collar area, but everybody’s making money,” says Tommy Eastman, a real estate broker at Flavin Realty in Lake Charles. A lot of the first-time buyers he works with grew up in the area and work at nearby petrochemical or natural gas plants.
With prices and mortgage rates already so low and with rents rising, it can be cheaper to own than to rent. Many two-bedroom apartments are going for upward of $1,500 per month, Eastman says. Folks here can easily score a mortgage for less than that.
Homes are so affordable here, about 20.7% less than the national median, that plenty of first-time buyers are purchasing newly constructed abodes. And builders are responding to this demand, putting up lots of new subdivisions to the north and west of the city. Three-bedroom, two-bath homes in these neighborhoods go for around $200,000.
Just check out this three-bedroom home with a two-car garage in the Oak Grove subdivision priced at $199,900.
2. Provo, UT
Median list price: $377,500
Share of buyers aged 35 and younger: 51%
In recent years, Provo’s cultivated a growing startup and tech scene. But despite all of the growth in this city situated between Utah Lake and snow-capped Provo Peak, it’s still relatively affordable compared with other big tech destinations.
The price tag here might sound a little high, but homes go for a median $393,000 in Salt Lake City, about 45 minutes north of Provo—or for that matter $999,000 in San Jose, CA, in the heart of Silicon Valley.
The typical down payment here is just 6%, a much lower barrier for younger buyers than other higher-priced cities. Provo also boasts a down payment assistance program for first-time home buyers, which includes assistance of up to $10,000. The city makes them put down at least $1,000, and they must repay half of that amount if they sell the home within their first two years of ownership.
Many of these young professionals are buying starter homes in suburban neighborhoods such as Cedar Hills, where there are lots of family-friendly ranch homes. These homes are usually under 2,000 square feet, so they’re substantially cheaper than their larger counterparts nearby.
3. Appleton, WI
Median list price: $227,700
Share of buyers aged 35 and younger: 53%
This Wisconsin city is known for its beer. On the weekends, places like the Appleton Beer Factory and the Fox River Brewery are hopping (no pun intended). But aspiring homeowners aren’t just spending their free time downing pints—they’re out there dominating the Appleton housing market. Young buyers make up more than half of those purchasing homes.
“You can get a lot of home for your money,” says Carolyn Stark, a real estate agent at Keller Williams Fox Cities. The median home price in Appleton is 24% lower than the national median.
Appleton is home to employers such as Kimberly-Clark Corp. (maker of Huggies and other consumer products), a Fortune 500 company. And the typical household income for 25- to 34-year-olds is $68,108. That’s 16% more than what they earn in Milwaukee and 3% more than in Chicago—two bigger cities where homes cost more than in Appleton. In fact, last year, realtor.com named Appleton the top market for millennial home buyers.
So, the word is getting out. But cash-strapped buyers can still find deals in places such as City Park, a walkable neighborhood with two-story, 100-year-old homes with around 1,600 square feet priced around $120,000.
Median list price: $150,000
Share of buyers aged 35 and younger: 43%
Many places across the nation are experiencing a historic shortage of homes for sale—with a scarcity of homes offered at prices low enough for most first-time buyers to afford. That couldn’t be further from the truth in Bloomington, a small city two hours south of Chicago. Finding a home priced under $100,000 isn’t hard if they know where they look. Hint, head to the southwest part of town.
“A lot of students stay after they graduate,” says Becky Gerig, a broker at Re/Max Choice in Bloomington. Entry-level buyers make up the bulk of her clients, and they’re often recent graduates of local colleges like Illinois Wesleyan University who go on to work at companies like insurance provider State Farm, which is headquartered there.
“They can find homes sometimes at $60,000 to $70,000,” says Gerig.
Many of the homes here are single-family homes with porches, built in the 1940s. Bargain hunters can find fixer-uppers such as this one for just $60,000.
5. Amarillo, TX
Median list price: $227,000
Share of buyers aged 35 and younger: 46%
One of Amarillo’s claims to fame is the Cadillac Ranch, with its array of colorfully spray-painted vintage cars half buried in the ground and sitting straight up like Stonehenge. But don’t confuse the luxury cars as a sign of high local home prices. Amarillo is a low-cost, Texas Panhandle city, sitting at the gateway to the Palo Duro Canyon State Park, about an hour east of New Mexico. First-time buyers here can have their pick of abodes.
“Builders went crazy last year,” says Cinda Lovato, a Realtor®. “There are so many new homes, from as low as $150,000.”
Starter-home seekers are flocking to suburban neighborhoods like Saturn Terrace, where they can find three-bedroom, 1,400-square-foot ranches for under $200,000. Some of these buyers are even as old as 40 or 50 and are tired of renting instead of owning, Lovato says.
“Rent on a three-bedroom, two-bath house is typically $1,500,” she says. “If they bought the home, [the mortgage could] be less than $1,000.”
Now let’s look at the best places for folks who are staring down retirement—and beyond.
The 10 top places to buy a forever home
Median list price: $280,000
Share of buyers aged 60 and older: 47%
No one wants to live through a devastating hurricane and then spend their golden years rebuilding their homes. That’s why many retirees are heading to Punta Gorda, about an hour and a half south of Tampa. The city was devastated by Hurricane Charley in 2004. In the wake of the tragedy, lots of homes designed to withstand powerful storms have been built. Affordable prices and no state income taxes are big draws for retirees looking for a down-to-earth community on the water.
“We’re a boomtown,” says Patricia McGuire, a local real estate professional with Coldwell Banker Sunstar Realty. Last month realtor.com named Punta Gorda the fastest-growing retirement town in America.
All those incoming baby boomers mean home builders don’t get a lot of free time. They tend to favor newly built, two-bedroom villas priced around $200,000 with granite countertops and two-car garages (to store all the stuff left over from their larger previous homes). First-floor condos are also popular with this set, McGuire says.
2. Prescott, AZ
Median list price: $400,000
Share of buyers aged 60 and older: 54%
Prescott tends to attract wealthier, active retirees and soon-to-be retirees who prefer a hike or bike ride in the mountains over hanging out at senior centers. The city is situated between the Prescott National Forest and the Coconino National Forest.
The typical forever homes in Prescott are one-story houses priced around $250,000 with a garage and big driveway—all the better to park the RV.
The metro is also home to plenty of 55-plus communities such as Victorian Estates. The gated community boasts 178 single-family homes ranging from about 1,000 to 1,700 square feet with open floor plans, a clubhouse, outdoor pool, and even weekly poker nights. Homes there start at $279,000.
But places here don’t come cheap—that’s why we earlier named it one of the most expensive retirement towns in America. You can thank former Californians for that. They can sell their big homes in the Golden State for a bundle and still have enough to buy in Prescott and put some dough in the bank. But they’re driving prices up for everyone else.
Median list price: $244,800
Share of buyers aged 60 and older: 46%
Myrtle Beach isn’t just for souvenir vendors and vacationers. Over the years this tourist mecca has seen a steady increase of older folks buying up dream retirement homes or second homes just minutes from the beach.
They’re drawn by the inexpensive housing, warm weather, and relatively low cost of living. And because Myrtle Beach is a tourist hot spot, there are already lots of fun things to do in the area, like taking a ride on the SkyWheel (a 187-foot Ferris wheel).
Some folks looking ahead to retirement will snag a permanent lot at a seaside campground, where they can live full time out of their camper and even build things like porches around it. Costs for a campground site at Pirateland Camping Resort start at $15,000 per year. Other folks are buying one-bedroom condos in beachfront high-rises priced around $120,000.
Median list price: $310,000
Share of buyers aged 60 and older: 39%
The popular HGTV show “House Hunters” followed J.D. and Jenny Schroen in 2017 as they searched for their forever home in Salisbury. They wanted something big, around 4,000 square feet, and under $600,000. They ended up buying a home for $315,000 and giving it a six-figure overhaul.
Forever-home buyers in Salisbury can either go the fixer-upper route of the Schroens or choose from lots of new, rambler-style homes that were built with older buyers in mind. These places usually have open floor plans, wood flooring, and granite countertops, and can be found for under $200,000.
Salisbury isn’t as much of a de facto retirement town as many of the other places on our list. But with a population with an average age of 45, it does have lots of folks starting to think ahead and choosing to stay put.
Median list price: $372,300
Share of buyers aged 60 and older: 27%
Asheville isn’t the place to find forever homes on a shoestring budget. But this lively place filled with boutiques, breweries, and art galleries in the Blue Ridge Mountains continues to see young and old alike moving in.
“Arts and culture are really important in Asheville,” says Molly de Mattos, a broker in Asheville. “We have a big live-music scene, but we don’t have big venues. The retirees appreciate the small, more intimate venues.”
Older buyers often prefer single-family homes in walkable neighborhoods, like Montford, with houses that have outdoor patios or porches. Usually these homes are priced around $350,000 to $600,000. The buyers come from all over, but particularly California.
“People are tired of paying millions of dollars for a home, so they retire here knowing they can get a really nice house for $500,000 and have money to play with,” de Mattos says.
Hey, Asheville’s nickname of the “San Francisco of the East” didn’t come out of thin air.
* A metropolitan statistical area is a designation that includes the urban core of a city and surrounding smaller towns and cities.
** Sources: realtor.com, Nielsen, Optimal Blue, and the U.S. Census Bureau
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