Indianapolis Rated the Best Market for First-Time Buyers: Zillow

Indianapolis is the best market for first-time homebuyers right now, according to research released Tuesday by Zillow.

To produce the list of markets, Zillow compared the share of monthly income that would go to mortgage payments in each market versus the share of renters' income devoted to housing. The Seattle-based company also included factors such as median home values, inventory and competition with all-cash offers.

The median home value in Indianapolis according to the Zillow Home Value Index was $130,200. In the Indiana city, homeowners can expect to spend 11% of their monthly income on mortgage payments, four percentage points below the national average.

Renters in the city devote, on average, 26% of their monthly income on housing. Indianapolis also has high levels of inventory available.

Following Indianapolis on the list of best markets for first-time homebuyers was Pittsburgh and Memphis, Tenn. The top 10 list also included Cleveland, Chicago and Houston. Chicago was the only city on the list to have a median home value above the national average of $186,200, with a value of $193,800.

As for the worst cities for first-time buyers, Salt Lake City came out on top, followed by Washington, D.C, and the New York City/Northern New Jersey region.

Zillow also noted that other cities on this "worst" list such as Austin, Texas, and San Jose, Calif., present "a conundrum for many young people," since they have hot job markets but limited and expensive housing inventory where starter homes are concerned.

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