The 25 toughest markets for homebuyers

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With a lack of affordable homes on the market, competition among homebuyers in many parts of the country is fierce.

To find out where buyers are the most competitive, LendingTree ranked the 50 largest metropolitan areas (metros) in the United States, based on the following categories:

  • Average down payment percentage among homebuyers
  • Share of homebuyers who have credit scores above 720
  • Share of homebuyers who shop around for a mortgage before looking for a house

These criteria were chosen because they each play an important role in a person’s ability to secure a home loan. Since 63% of homeowners have a mortgage, those who are strong in these categories will likely be very competitive among other homebuyers.

Image Credit: DepositPhotos.com.

Key findings

The 25 toughest markets for homebuyers

  • San Jose, California, San Francisco and Raleigh, North Carolina, are the three metros with the most competitive homebuyers. Despite only ranking 17th in the “shopping around” category, San Jose ranks first in both the “credit score” and “down payment” categories, allowing it to rank first overall. While neither San Francisco or Raleigh rank first in any individual category, their relatively strong showings across the board are enough to secure them the second and third spots.
  • Virginia Beach, Va., has the least competitive homebuyers in the country, followed by Riverside, California, and Atlanta, who are tied for the metro with the second least competitive buyers. Buyers in these metros tend to have lower credit scores, smaller down payments and are less likely to shop around for a mortgage before choosing a home.
  • The average down payment percentage in the top 11 most competitive metros is 21%. For the least competitive 12 metros, that number is 19%. Typically, larger down payments make buyers more appealing to sellers. As a result, more competitive buyers will generally be able to put down more on a home.
  • About 73% of buyers in the top 11 most competitive metros have credit scores of at least 720. Across the 50 largest metros in the country, that number is 64%. For the 12 least competitive buyer metros, it’s 57%.
  • In the 11 most competitive metros, 62% of buyers shopped around for a mortgage before looking for a house. Comparatively, only 54% of potential buyers in the 12 least competitive metros can say the same.

Image Credit: DepositPhotos.com.

25. Chicago

The 25 toughest markets for homebuyers

Average down payment percentage 18.18%

Share of buyers with a credit score of 720 or higher 65.07%

Share of buyers who shopped around for a mortgage 60.99%

Image Credit: dibrova.

24. Miami

The 25 toughest markets for homebuyers

Average down payment percentage 21.15%

Share of buyers with a credit score of 720 or higher 58.49%

Share of buyers who shopped around for a mortgage 59.03%

Image Credit: espiegle/iStock.

Tied – 22. Sacramento, California

The 25 toughest markets for homebuyers

Average down payment percentage 19.26%

Share of buyers with a credit score of 720 or higher 69.70%

Share of buyers who shopped around for a mortgage 58.92%

Image Credit: Belyay / iStock.

Tied – 22. Salt Lake City

The 25 toughest markets for homebuyers

Average down payment percentage 16.67%

Share of buyers with a credit score of 720 or higher 66.42%

Share of buyers who shopped around for a mortgage 64.38%

Image Credit: iStock/Sean Pavone.

21. Phoenix

The 25 toughest markets for homebuyers

Average down payment percentage 19.36%

Share of buyers with a credit score of 720 or higher 62.29%

Share of buyers who shopped around for a mortgage 63.99%

Image Credit: iStock/Sean Pavone.

Tied – 18. Nashville, Tennessee

The 25 toughest markets for homebuyers

Average down payment percentage 20.19%

Share of buyers with a credit score of 720 or higher 60.89%

Share of buyers who shopped around for a mortgage 64.03%

Image Credit: iStock.

Tied – 18. Pittsburgh

The 25 toughest markets for homebuyers

Average down payment percentage 21.84%

Share of buyers with a credit score of 720 or higher 62.65%

Share of buyers who shopped around for a mortgage 56.87%

Image Credit: Joecho-16 / iStock.

Tied – 18. Hartford, Connecticut

The 25 toughest markets for homebuyers

Average down payment percentage 22.11%

Share of buyers with a credit score of 720 or higher 63.89%

Share of buyers who shopped around for a mortgage 54.90%

Image Credit: DepositPhotos.com.

Tied – 16. St. Louis, Missouri

The 25 toughest markets for homebuyers

Average down payment percentage 20.99%

Share of buyers with a credit score of 720 or higher 62.65%

Share of buyers who shopped around for a mortgage 59.27%

Image Credit: iStock.

Tied – 16. Washington, D.C.

The 25 toughest markets for homebuyers

Average down payment percentage 17.46%

Share of buyers with a credit score of 720 or higher 69.98%

Share of buyers who shopped around for a mortgage 64.30%

Image Credit: DepositPhotos.com.

15. Denver

The 25 toughest markets for homebuyers

Average down payment percentage 16.67%

Share of buyers with a credit score of 720 or higher 72.86%

Share of buyers who shopped around for a mortgage 66.11%

Image Credit: DepositPhotos.com.

Tied – 13. Detroit

The 25 toughest markets for homebuyers

Average down payment percentage 21.63%

Share of buyers with a credit score of 720 or higher 59.89%

Share of buyers who shopped around for a mortgage 61.10%

Image Credit: iStock/f11photo.

Tied – 13. Austin, Texas

The 25 toughest markets for homebuyers

Average down payment percentage 19.91%

Share of buyers with a credit score of 720 or higher 66.08%

Share of buyers who shopped around for a mortgage 63.49%

Image Credit: DepositPhotos.com.

12. Seattle

The 25 toughest markets for homebuyers

Average down payment percentage 19.12%

Share of buyers with a credit score of 720 or higher 72.99%

Share of buyers who shopped around for a mortgage 63.72%

Image Credit: aiisha5 / iStock.

Tied – 10. Milwaukee

The 25 toughest markets for homebuyers

Average down payment percentage 20.45%

Share of buyers with a credit score of 720 or higher 66.97%

Share of buyers who shopped around for a mortgage 60.03%

Image Credit: iStock/Sean Pavone.

Tied – 10. Minneapolis

The 25 toughest markets for homebuyers

Average down payment percentage 18.18%

Share of buyers with a credit score of 720 or higher 71.94%

Share of buyers who shopped around for a mortgage 67.44%

Image Credit: DepositPhotos.com.

Tied – 8. New York City

The 25 toughest markets for homebuyers

Average down payment percentage 20.63%

Share of buyers with a credit score of 720 or higher 67.88%

Share of buyers who shopped around for a mortgage 60.11%

Image Credit: DepositPhotos.com.

Tied – 8. Kansas City, Missouri

The 25 toughest markets for homebuyers

Average down payment percentage 20.45%

Share of buyers with a credit score of 720 or higher 64.07%

Share of buyers who shopped around for a mortgage 63.45%

Image Credit: DepositPhotos.com.

7. Boston

The 25 toughest markets for homebuyers

Average down payment percentage 21.11%

Share of buyers with a credit score of 720 or higher 71.68%

Share of buyers who shopped around for a mortgage 59.50%

Image Credit: DepositPhotos.com.

6. Los Angeles

The 25 toughest markets for homebuyers

Average down payment percentage 20.00%

Share of buyers with a credit score of 720 or higher 73.57%

Share of buyers who shopped around for a mortgage 64.44%

Image Credit: DepositPhotos.com.

Tied – 4. San Diego

The 25 toughest markets for homebuyers

Average down payment percentage 20.41%

Share of buyers with a credit score of 720 or higher 75.19%

Share of buyers who shopped around for a mortgage 62.86%

Image Credit: DepositPhotos.com.

Tied – 4. Portland, Oregon

The 25 toughest markets for homebuyers

Average down payment percentage 20.39%

Share of buyers with a credit score of 720 or higher 74.66%

Share of buyers who shopped around for a mortgage 63.51%

Image Credit: DepositPhotos.com.

3. Raleigh, North California

The 25 toughest markets for homebuyers

Average down payment percentage 21.15%

Share of buyers with a credit score of 720 or higher 70.48%

Share of buyers who shopped around for a mortgage 61.50%

Image Credit: iStock/Mark Howard.

2. San Francisco

The 25 toughest markets for homebuyers

Average down payment percentage 21.43%

Share of buyers with a credit score of 720 or higher 81.96%

Share of buyers who shopped around for a mortgage 62.32%

Image Credit: DepositPhotos.com.

1. San Jose, California

The 25 toughest markets for homebuyers

Average down payment percentage 22.67%

Share of buyers with a credit score of 720 or higher 84.15%

Share of buyers who shopped around for a mortgage 61.08%

Image Credit: iStock/StellaMc.

How to be a competitive homebuyer

The 25 toughest markets for homebuyers

Because both lenders and sellers have different criteria for who they want to work with, there are many factors that can contribute to a homebuyer’s perceived strength.

That being said, buyers who do the following will generally be seen as more competitive than those who don’t.

  • Shop around for a mortgage. Buyers who shop around for a mortgage usually have a better idea of what kind of loans that they might qualify for and which lenders are more likely to offer a mortgage preapproval. Potential buyers who are preapproved are often seen as more appealing to sellers because they have shown they are likely financially stable, and probably won’t need to go through a potentially lengthy loan approval process after deciding to buy a house.
  • Make a larger down payment. Larger down payments show sellers that potential buyers have the financial stability and means to purchase a home. As a result, sellers may have more confidence in offers from buyers who make larger down payments.
  • Have a high credit score. Buyers with higher credit scores have an advantage because it’s one of the main factors mortgage lenders consider when offering a loan. This means borrowers with higher scores are more likely to be approved for a loan than those with credit scores below 720.

Image Credit: Feverpitched / iStock.

Methodology

The 25 toughest markets for homebuyers

For this study, LendingTree reviewed more than 750,000 mortgage loan requests that came through LendingTree’s marketplace from March 1, 2020, through March 24, 2021.

Using data pulled from those requests, LendingTree ranked the top 50 largest metropolitan statistical areas (MSAs) — also referred to as “metros” in this study — in the United States in three separate categories (as listed above) before averaging those rankings to get the overall ranking used in the study.

Related:

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

Image Credit: DepositPhotos.com.

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