The Most Affordable States for First-Time Homebuyers – and the Least
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The Most Affordable States for First-Time Homebuyers – and the Least

Flickr / TumblingRun

First-time homebuyers have the best housing options in Middle America.

Iowa, Utah, Minnesota, Kansas and Missouri offer the most attractive housing markets for young buyers, according to a new study. The analysis considers five factors in each state: housing affordability, the job market for young adults, housing supply, credit availability and the homeownership rate for those 35 and younger.

1 Iowa
2 Utah
3 Minnesota
4 Kansas
5 Missouri
6 North Dakota
7 South Dakota
8 Wyoming
9 Vermont
10 Nebraska


At the other end of the spectrum, the worst states for first-time homebuyers are the ones with some the highest housing prices nationwide, or high rates of poverty. California comes in dead last, followed by Hawaii, New York, Louisiana and Mississippi.

41 Massachusetts
42 Oregon
43 Colorado
44 Texas
45 Rhode Island
46 Mississippi
47 Louisiana
48 New York
49 Hawaii
50 California


Related: The Most Outrageous Housing Market in America 

“Tight market conditions and unaffordably high prices really plague what many young Americans feel are the most desirable places to put down roots,” said analyst Claes Bell in a statement. “On the other hand, the availability of FHA loans that allow down payments of as little as 3.5 percent may make it easier to buy a home in high-priced markets than you think.”

When it comes to affordability, mortgage payments in the most expensive states claim about a third of household income. But in the most affordable states, mortgage payments eat up only 13 percent of household income — a huge difference. The most affordable states for all buyers are Iowa, Ohio and West Virginia, while the costliest are Hawaii, California and Oregon.

There are also stark differences in mortgage availability and under-35 homeownership rates. For instance, Bankrate found that less than 5 percent of mortgage applications were denied in Alaska. But in West Virginia, the rejection rate was three times as high. More than 40 percent of millennial households in Minnesota and Iowa own their own home, compared with less than a quarter in Hawaii, California and New York.