Despite rising home prices, Phoenix is among the Top 25 best cities for first-time homebuyers, according to a new analysis by SmartAsset, an online provider of real estate and financial advice. Phoenix ranks No. 21 (up from No. 22 last year) and is one of the few Western cities on the list.
The analysis, using Zillow price data from 2016, considered cities with at least 300,000 residents and rated them for affordable housing, market volatility (lower is better), and the availability of conventional loans. Topping the list:
- Pittsburgh, PA
- Oklahoma City, OK
- Omaha, NE
- Indianapolis, IN
- Tulsa, OK
Six Texas cities are among the Top 20. In the rest of the West, only Denver and Colorado Springs are ahead of Phoenix on the SmartAsset list.
Unfortunately for first-time homebuyers, low supply of affordable homes has been fueling rising prices. The median home price in the western U.S. rose to $339,900 in February, up 9.6 percent from February 2016, according to the National Association of Realtors (NAR).
Separately, the NAR index of pending home sales jumped 5.5 percent in February (the most recent month for which the analysis is available). The index, a forward-looking indicator based on signed contracts, is at its highest level since last April and the second highest since May of 2006.
Home sales typically rise in spring. But this year looks robust so far, even with seasonal trends taken into account, analysts say.
“The stock market’s continued rise and steady hiring in most markets is spurring significant interest in buying [homes], as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year,” said Lawrence Yun, NAR’s chief economist.