January, 2019—A study performed by LendingTree ranked the top fifty cities in the U.S. for first-time buyer friendliness. Cincinnati came in fourth, behind Pittsburgh and Cleveland (tied for first) and Oklahoma City. Even as the frenzy of low inventory, high demand, and competitively high-prices cools a little bit, home searches and affordability are still tough for first-time buyers. But with Cincinnati ranking near the top in this national study, first-time buyers who live here have an advantage in making their home ownership dream a reality.

The factors used to rank first-time buyer friendliness included:

∙ Average down payment amount

∙ Average down payment percent

∙ Share of buyers using an FHA mortgage

∙ Average FHA down payment as a percentage of average down payment for all loans (This measures how much homebuyers are saving by using FHA loans.)

∙ Percentage of buyers who have credit scores below 680

∙ The Housing Opportunity Index score for the area. This measures the percentage of houses affordable to middle-income families.

Cincinnati, Indianapolis, and Cleveland contained the largest share of homes considered affordable to median income families. The chart below compares some of the key metrics for the top-ranked and lowest rank cities for first-time buyer friendliness. Consider that first-time buyers in Cincinnati paid an average of $36,000 as a down payment with the average down payment being 15% of the borrowed amount.

Rank City Avg Down Payment Down Payment % % of Buyers with < 680 Credit Score Housing Opportunity Index
1 Pittsburgh $34,049 15% 41.32% 79.4
1  Cleveland  $32,775  15%  42.77% 82.2 
3  Oklahoma City  $30, 234  13% 36.92%  79
4  Cincinnati  $36,042  15%  40.78%  84 
5  Birmingham, AL  $33,747  14%  43.30%  74.8 
6  Indianapolis  $38,114  16%  37.50%  86.3 
7  Columbus  $34,400  14%  42.20%  74.7 
47  San Jose  $144,214  20%  4.69%  13.9 
48  San Francisco  $128,627  21%  11.40%  11.1 
49  Denver  $74,317  19%  16.81%  51.5 
50  Los Angeles  $95,418  18%  9.19%  9.1 

*Data from “LendingTree Ranks Best Cities for First-Time Homebuyers” on www.lendingtree.com.

Now first-time homebuyers also have to deal with rising mortgage interest rates, which reduces their buying power. As affordability is stretched, borrowers should consider all the lending programs available to help them own a home.