Diversions July 23, 2015

Where First Homes Are Flourishing

A stronger economy means many would-be homeowners are thinking seriously of buying that first home. Which states have the most first-time homebuyers?
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California and New York don’t make the cut for top states for first-time homeowners.

With the economy continuing to strengthen, many wannabe homeowners have decided it’s time to buy that first home, according to a GOBankingRates survey of the 10 states with the most growth in first-time homebuyers while maintaining lower levels of foreclosure rates.

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Seven out of the 10 states fall in the Northeast, including the top three. Arizona was the only western state in the contiguous U.S. to make the list. 7 Washington, D.C., has the highest median price of a home on this list at more than $500,000 – but also boasts one of the lowest foreclosure rates (.01%).

First-time homebuyer stats are from 2003 to 2013, and also show some interesting data for the top states. In West Virginia, the share of new first-time home buyers increased 58%. Foreclosures this year remained low, at 0.01%. The median home sale price is reportedly $115,850, with a monthly payment on a 30-year mortgage costing around $550 a month.

New Hampshire’s portion of homebuyers looking to purchase for the first time increased 89%. The state’s foreclosure rate is .05% and the median sales price $224,700. Buying is still cheaper than renting: A monthly mortgage payment is around $1,060 on a 30-year loan, compared with the median rent price of $1,250 in the state.

Rhode Island had the largest amount of growth in first-time homebuyers; its rate of this type of borrower nearly doubled. Foreclosures are also fairly low at 0.06%. The median rent is reported at $1,400, the monthly 30-year mortgage payment is about $1,030 based on a median sale price of $217,625.

Vermont saw a 48% rise in first-time homebuyers. The state also has one of the lowest foreclosure rates, at .02%. The ratio of first-time homebuyers in Massachusetts jumped 74%. The state also has a foreclosure rate on the lower end. Hawaii had a 53% increase in first-time homebuyers and has a foreclosure rate of .03%. The state offers a mortgage credit certificate that can reduce the federal income tax homeowners owe.

The top 10 states for homebuyers are:

  1. West Virginia
  2. New Hampshire
  3. Rhode Island
  4. Vermont
  5. Massachusetts
  6. Hawaii
  7. Washington, D.C.
  8. Wyoming
  9. Maine
  10. Arizona

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