Cities were also assessed on property and income tax environments, as well as the prevalence of government loans through the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA).
“Buying your first home is a major milestone, and in today’s environment, buyers need to weigh all of their options,” said Jake Vehige, president of mortgage lending at Neighbors Bank. “We focused on places where housing costs align with local incomes, where access to down payment assistance and government-backed loans is strong, and where buyers can build a stable, rewarding life.”
Government loans ease housing market entry
The study emphasizes the importance of low down payment mortgages for helping new buyers break into the market.
FHA loans require as little as 3.5% down and are often used by borrowers with lower credit scores. USDA loans — which require no down payment — are available in many rural and suburban areas. VA loans offer similar terms for eligible service members and veterans.
Fannie Mae‘s HomeReady and Freddie Mac’s Home Possible programs also offer 3% down payment options, with reduced mortgage insurance costs and flexible funding sources.
For many first-time buyers, especially those with limited savings, these programs represent the most accessible route to homeownership.
Top 10 cities for first-time buyers in 2025
Neighbors Bank offered commentary on its top 10 metros that are most friendly to first-time homebuyers.
1. Oklahoma City
With a median home price of $240,048 and monthly housing costs that average just 28% of local income, Oklahoma City leads the rankings. All seven counties in the metro area meet the affordability threshold. The area also sees strong use of FHA and VA loans, and it benefits from low property taxes.
2. Huntington-Ashland (West Virginia, Kentucky, Ohio)
Housing costs in this tri-state metro average just 22% of household income. The area stands out for its low cost of living, no state sales tax on groceries in West Virginia and a high share of FHA, VA and USDA loans.
3. Lubbock, Texas
Lubbock reports the highest FHA loan usage among the top 10 cities. Every county in the metro area remains under the 30% housing cost threshold. With no state income tax in Texas and a median home price well below the national average, it remains a practical option for first-time buyers.
4. Baton Rouge, Louisiana
Baton Rouge combines low property taxes with solid access to USDA and FHA loan programs. Most of the metro’s counties meet the affordability threshold. The city also benefits from a mild climate and proximity to the Mississippi River.
5. Pittsburgh
In Pittsburgh, housing costs average 25% of income. Although USDA loan eligibility is limited, the area’s relatively low income taxes and rich cultural amenities contribute to its appeal. Seven of eight counties in the metro meet the affordability benchmark.
6. St. Louis
St. Louis balances moderate home prices and a cost of living index below the national average. While Missouri’s property taxes are somewhat higher, many areas are USDA-eligible and housing costs remain manageable.
7. Jackson, Mississippi
This metro has the lowest housing costs relative to income of any on the list. It also offers broad access to government-backed loans — although a higher sales tax offsets some affordability gains. Housing costs average well below the 30% threshold.
8. Indianapolis
Most counties in the Indianapolis area maintain affordability despite rising prices. Low income taxes and wide FHA/VA loan availability help first-time buyers, but property taxes and USDA loan limitations are factors to consider.
9. Cincinnati
Cincinnati’s housing costs approach the 30% mark, but a lower-than-average cost of living and broad loan accessibility help keep homeownership within reach. Ohio’s tax structure provides some relief to first-time buyers.
10. Chicago
Even though home prices and property taxes are the highest among the 10 metros on the list, more half the counties in the Chicago area remain below the 30% affordability threshold. Strong FHA and VA loan activity supports first-time buyer access.
