The 10 Best States for First-Time Homebuyers

The housing market hasn't been friendly to first-time homeowners over the past few years.

Skyrocketing home values, soaring mortgage rates, and plunging inventory have left many shoppers struggling to find a home they can afford.

But all hope is not lost. There are some states where you can buy a home and still get ahead financially. Here are the 10 states that offer a better environment for a first-time homebuyer.

Editor's note: All median home values are from Redfin for December 2023.

Ohio’s median home sale price is a low $221,700, and the state also offers incentives to first-time homebuyers.

For example, the Ohio Housing Finance Agency offers lower interest rates and a down-payment assistance grant to qualifying first-time homebuyers — including recent graduates.

Other programs offer help with both home purchase loans in low-income neighborhoods and home improvement loans.

Want to join one of the fastest-growing states? Tennessee welcomes first-time homebuyers with open arms.

The median sale price for a home is $372,800, which is reasonable. The Tennessee Housing Development Agency offers Great Choice Home Loans to make homeownership more affordable to those with moderate incomes.

The Great Choice Plus program provides down payment help in the form of a flat amount based on the price you paid for the home.

Housing sale prices in Pennsylvania are low, at a median of $270,600.

The Keystone State also offers assistance to homebuyers. For example, the Pennsylvania Housing Finance Agency provides up to 4% of the purchase prices or market value, or $6,000 — whichever is less — in down payment and closing cost assistance.

West Virginia is another great place for first-time homebuyers, with the median home sale price at an affordable $281,800.

The West Virginia Housing Development Fund helps first-time homebuyers finance up to 100% of the price of a home. Whether you’re just starting in a remote role or looking for somewhere to put down roots, this could be the place.

The median home sale price in North Carolina is a moderate $358,200. The North Carolina Housing Finance Agency also offers a program that provides $8,000 in down payment assistance to qualifying first-time homebuyers and military veterans.

Property tax rates also are moderate in the Tar Heel State.

Kentucky boasts a median home sale price of $243,600. The Kentucky Housing Corporation offers down payment assistance through a loan of up to $10,000.

For first-time homebuyers, the Bluegrass State might be one of the better places in the country to pursue homeownership.

The overall cost of living is low in Mississippi, including housing prices. The median home sale price in the Magnolia State is $233,500.

Low housing costs and an overall low cost of living is a winning combination for first-time homebuyers, who might be eligible for down payment and closing cost assistance through the Mississippi Home Corp.

With a median home sale price of $251,900, Iowa might be an appealing location for first-time homebuyers in the Midwest.

The Iowa Finance Authority offers a down payment and closing cost program that helps buyers receive a $2,500 grant or a second loan of up to 5% of a home’s sale price.

Connecticut is a bit pricey, with a median home sale price of $380,300 and some of the highest property taxes in the country. But you could do worse if you want to live in the Northeast.

The Homeowner’s Equity Recovery Opportunity Loan Program is offered to those purchasing distressed properties in neighborhoods that need revitalization and community investment.

In addition, the Connecticut Housing Finance Authority offers financing to help with down payment and closing costs, as well as home purchase assistance of up to $15,000 to those who qualify.

The median sale price in Louisiana is a low $242,400. The Louisiana Housing Corp. offers several programs to help homebuyers make a down payment on their new home.

Those factors mean first-time homebuyers might have good reason to venture down to the bayou.

If homeownership is part of your strategy to build wealth, consider a home in one of these states that offers lower median home sale prices or incentives for first-time homeowners.

While moving to a new state can be a challenge, the payoff is often worth it, especially when you consider the money spent over the course of a 30-year loan.