These are the best & worst cities for first-time homebuyers

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It’s hard out there for a first-time homebuyer. Although the national housing market is beginning to cool and prices are beginning to fall, it can still be a challenge for first-time homebuyers to navigate the housing market.

LendingTree, the nation’s leading online loan marketplace, has ranked the 50 largest metropolitan areas in the United States by how friendly they are for first-time homebuyers.

Image Credit: Depositphotos.

Methodology

The factors that we looked into to help make this ranking are:

  • 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.

Several down payment variables are included in our ranking because research has identified down payments as the biggest obstacles to homeownership. The down payments variable in this study are not precisely correlated, but each can have an impact on how easy it is for a first-time buyer to find a home.

Image Credit: Depositphotos.

Best cities for first-time homebuyers

Here are the top 10 cities for first-time homebuyers:

Image Credit: Depositphotos.

10. Kansas City, Missouri

Average down payment amount: $37,375
Average down payment percentage: 16%
Share of buyers using an FHA mortgage: 27.76%
Average FHA down payment as a percentage of average down payment for all loans: 31.69%
Percentage of buyers who have credit scores below 680: 32.32%

HOI Index Score: 74.4

Image Credit: Getty.

9. Detroit

Average down payment amount: $38,261
Average down payment percentage: 16%
Share of buyers using an FHA mortgage: 38.14%
Average FHA down payment as a percentage of average down payment for all loans: 31.08%
Percentage of buyers who have credit scores below 680: 44.67%

HOI Index Score: 72.1

Image Credit: Getty.

8. Louisville, Kentucky

Average down payment amount: $35,614
Average down payment percentage: 15%
Share of buyers using an FHA mortgage: 21.71%
Average FHA down payment as a percentage of average down payment for all loans: 28.15%
Percentage of buyers who have credit scores below 680: 31.58%

HOI Index Score: 77.3

Image Credit: traveler1116/istockphoto.

7. Columbus, Ohio

Average down payment amount: $34,400
Average down payment percentage: 14%
Share of buyers using an FHA mortgage: 37.57%
Average FHA down payment as a percentage of average down payment for all loans: 33.51%
Percentage of buyers who have credit scores below 680: 42.20%

HOI Index Score: 74.7

Image Credit: DepositPhotos.com.

6. Indianapolis

Average down payment amount: $38,114
Average down payment percentage: 16%
Share of buyers using an FHA mortgage: 30.%
Average FHA down payment as a percentage of average down payment for all loans: 29.83%
Percentage of buyers who have credit scores below 680: 37.5%

HOI Index Score: 86.3

Image Credit: f11photo.

5. Birmingham, Alabama

Average down payment amount: $33,747
Average down payment percentage: 14%
Share of buyers using an FHA mortgage: 39.18%
Average FHA down payment as a percentage of average down payment for all loans: 34.21%
Percentage of buyers who have credit scores below 680: 43.30%

HOI Index Score: 74.8

Image Credit: RobHainer/istockphoto.

4. Cincinnati

Average down payment amount: $36,042
Average down payment percentage: 15%
Share of buyers using an FHA mortgage: 32.04%
Average FHA down payment as a percentage of average down payment for all loans: 30.65%
Percentage of buyers who have credit scores below 680: 40.78%

HOI Index Score: 84

Image Credit: Sean Pavone/istockphoto.

3. Oklahoma City

Average down payment amount: $30,234
Average down payment percentage: 13%
Share of buyers using an FHA mortgage: 25.4%
Average FHA down payment as a percentage of average down payment for all loans: 32.8%
Percentage of buyers who have credit scores below 680: 36.9%

HOI Index Score: 79

Image Credit: Majestic_Aerials/istockphoto.

2. Cleveland

Average down payment amount: $32,775
Average down payment percentage: 15%
Share of buyers using an FHA mortgage: 32.95%
Average FHA down payment as a percentage of average down payment for all loans: 32.7%
Percentage of buyers who have credit scores below 680: 42.8%

HOI Index Score: 82.2

Image Credit: InfiniteImpactStudios/istockphoto.

1. Pittsburgh

Average down payment amount: $34,049
Average down payment percentage: 15%
Share of buyers using an FHA mortgage: 36.5%
Average FHA down payment as a percentage of average down payment for all loans: 31.2%
Percentage of buyers who have credit scores below 680: 41.3%

HOI Index Score: 78.4

Image Credit: HaizhanZheng/istockphoto.

Worst cities for first-time homebuyers

Here are the worst 10 cities for first-time homebuyers:

Image Credit: Depositphotos.

10. Austin, Texas

Average down payment amount: $53,800
Average down payment percentage: 17%
Share of buyers using an FHA mortgage: 10.33%
Average FHA down payment as a percentage of average down payment for all loans: 32.2%
Percentage of buyers who have credit scores below 680: 13.64%

HOI Index Score: 57.4

Image Credit: Sean Pavone/shutterstock.

9. New York

Average down payment amount: $79,190
Average down payment percentage: 20%
Share of buyers using an FHA mortgage: 15.83%
Average FHA down payment as a percentage of average down payment for all loans: 29.49%
Percentage of buyers who have credit scores below 680: 15.02%

HOI Index Score: 30.8

Image Credit: DepositPhotos.com.

8. Seattle

Average down payment amount: $75,170
Average down payment percentage: 17%
Share of buyers using an FHA mortgage: 19.31%
Average FHA down payment as a percentage of average down payment for all loans: 35.56%
Percentage of buyers who have credit scores below 680: 19.69%

HOI Index Score: 39.1

Image Credit: cdrin/shutterstock.

7. Miami

Average down payment amount: $51,374
Average down payment percentage: 17%
Share of buyers using an FHA mortgage: 11.11%
Average FHA down payment as a percentage of average down payment for all loans: 33.2%
Percentage of buyers who have credit scores below 680: 18.37%

HOI Index Score: 33.8

Image Credit: Getty.

6. San Diego

Average down payment amount: $96,453
Average down payment percentage: 19%
Share of buyers using an FHA mortgage: 19.08%
Average FHA down payment as a percentage of average down payment for all loans: 31.79%
Percentage of buyers who have credit scores below 680: 11.84%

HOI Index Score: 18.4

Image Credit: DepositPhotos.com.

5. Portland, Oregon

Average down payment amount: $55,456
Average down payment percentage: 16%
Share of buyers using an FHA mortgage: 13.59%
Average FHA down payment as a percentage of average down payment for all loans: 35.64%
Percentage of buyers who have credit scores below 680: 18.48%

HOI Index Score: 37.1

Image Credit: DepositPhotos.com.

4. San Jose, California

Average down payment amount: $144,214
Average down payment percentage: 20%
Share of buyers using an FHA mortgage: 10.94%
Average FHA down payment as a percentage of average down payment for all loans: 26.68%
Percentage of buyers who have credit scores below 680: 4.69%

HOI Index Score: 13.9

Image Credit: Getty.

3. San Francisco

Average down payment amount: $128,627
Average down payment percentage: 21%
Share of buyers using an FHA mortgage: 9.8%
Average FHA down payment as a percentage of average down payment for all loans: 27.1%
Percentage of buyers who have credit scores below 680: 11.4%

HOI Index Score: 11.1

Image Credit: iStock.

2. Denver

Average down payment amount: $74,317
Average down payment percentage: 19%
Share of buyers using an FHA mortgage: 15.5%
Average FHA down payment as a percentage of average down payment for all loans: 38.8%
Percentage of buyers who have credit scores below 680: 16.8%

HOI Index Score: 51.5

Image Credit: ” Adventure_Photo.

1. Los Angeles

Average down payment amount: $95,418
Average down payment percentage: 18%
Share of buyers using an FHA mortgage: 14.1%%
Average FHA down payment as a percentage of average down payment for all loans: 33.6%
Percentage of buyers who have credit scores below 680: 9.2%

HOI Index Score: 9.1

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

Image Credit: DepositPhotos.com.

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