This Sun Belt State Boasts the Best Cities for First-Time Homebuyers

First-time buyers might be struggling nationwide, but in this Sun Belt state, several cities are emerging as ideal entry points into the housing market.

As more Americans seek affordable homes that meet their needs, Florida might be the state to explore. The state dominated rankings, offering multiple second-tier cities that could satisfy first-time homebuyers looking for stunning properties that won’t break the bank, according to a new WalletHub study.

Of the top 10 cities, six were located in the Sunshine State: Palm Bay, Tampa, Cape Coral, Orlando, Lakeland, and Sunrise.

WalletHub considered 300 cities across the country to determine which ones should be on a first-time homebuyer’s watchlist. WalletHub compared the cities using 22 indicators of market attractiveness, affordability, and quality of life.

“It all comes down to affordability with first-time homebuyers. I would say that the No. 1 thing that first-time homebuyers are looking for is that it’s got to make sense with their income,” Jenna Stauffer, a Florida-based real estate agent, tells Realtor.com®.

“Unfortunately, [even] if they want to be in more popular metros and have more amenities, due to the prices being so high, they’re just having to move to smaller cities. But when you’re in Florida, you still get to enjoy the lifestyle even if you’re in the smaller cities,” she adds.

Last year, only 24% of home purchases were made by first-time buyers—down from 32% in 2023, according to WalletHub.

Florida buyers seek affordability in second-tier cities

Stauffer says she’s seen Floridians getting pushed out of bigger, pricier metro areas. This means smaller second-tier cities—like Palm Bay, Lakeland, and Melbourne—have gotten more of the spotlight in recent years.

“First-time homebuyers, specifically, have been pushed out of larger metros, and that really has to do with the fact that during the [COVID-19] pandemic, Florida led the nation in migration growth, and that pushed prices up so high that it got so out of sync with income levels,” Stauffer explains.

“So in a lot of these big metros, first-time homebuyers are simply priced out—not just because of the high prices, but also what I call this lethal combination of high prices, elevated rates, rising insurance, and rising taxes.”

Palm Bay has a median list price of $346,832 and a year-over-year inventory increase of 5.8%, making it one of the cheapest options among the top picks.

Lakeland offers similar affordability, with a median price of $351,498 and a 36.3% jump in available properties, signaling more options and less competition.

Sunrise is also notably accessible, with the lowest median price on the list at just $212,000, and a 49.1% increase in listings compared with last year.

“These markets see especially high ‘real-estate market’ ranks. Home prices climbed significantly across the Sun Belt, including in Florida and Arizona, during the pandemic, boosting home price appreciation metrics,” says Hannah Jones, senior economic research analyst at Realtor.com.

These are WalletHub’s overall top 10 cities for first-time homebuyers: 1) Palm Bay, FL, 2) Boise, ID, 3) Tampa, FL, 4) Surprise, AZ, 5) Huntsville, AL, 6) Gilbert, AZ, 7) Cape Coral, FL, 8) Orlando, FL, 9) Lakeland, FL, and 10) Sunrise, FL.

Palm Bay earned the No. 1 spot for its lower home prices and access to coastal amenities, followed by Surprise, AZ—a fast-growing Phoenix suburb—and Lakeland, FL, known for its central location between Tampa and Orlando and relatively low cost of living. These smaller cities offer first-time buyers a chance to enter the market without sacrificing lifestyle.

“If there was a really meaningful correction in prices, in rates and insurance relief, then maybe buyers would be back in some of these larger metros. But I think it makes more sense to them, and it financially makes more sense to be moving toward some of these smaller cities,” says Stauffer.

Inventory levels support a buyer’s market

Florida hit a record high in housing inventory this February, with 168,717 homes listed for sale—the most ever recorded since Realtor.com began tracking the data in 2016. The state saw an unusual buildup in residential listings for the second consecutive month, following a steady upward trend that began in May 2022. This surge signals a notable shift in Florida’s once ultracompetitive housing market.

“This boom in demand also drove significant new-construction activity. As buyer demand pulled back due to high housing costs, inventory started to pick up. Altogether, these markets have seen favorable home value growth, new construction, and inventory growth in recent years, creating opportunities for first-time buyers,” Jones adds.

That shift is especially evident in Florida, where rising inventory levels are reshaping once-competitive markets and opening the door for first-time buyers.

“It has become a more buyer-friendly market in a lot of Florida cities because there is so much more inventory now than there’s ever been,” says Stauffer. “Since there’s more inventory, there’s less competition.

“Buyers aren’t in a panic to buy. They can really take their time. They can shop. I think with first-time homebuyers, because they’re making such a huge decision like purchasing a home, they really want to weigh all of their options, and they want to look at as many homes as they can,” she continues.

Stauffer believes bigger metro areas in Florida will continue to attract a more affluent crowd, pricing out first-time buyers. As a result, prospective buyers will gravitate toward smaller cities like Palm Bay, Melbourne, and Cocoa Beach.