National Study Ranks North Texas Cities as Best for First-Time Buyers

Even amid growing concerns over affordability and inventory, Dallas-area small- and mid-sized cities remain some of the hottest in the country for first-time buyers. Just this week, McKinney, Frisco, and Allen took top honors in a new study by WalletHub, making them the three best housing markets in the United States for new homebuyers. Richardson came in not too far down the list at No. 7. Not too shabby!

As for large cities (populations over 300,000), Dallas itself didn’t quite crack the top 20 (it’s still a respectable number 26). But Forth Worth represents at No. 5. Stick around after the jump to see what criteria makes a city most appealing. Visit here to see if your city made the list.

Favorable Housing Criteria

What makes a city appealing for a first-time homebuyer? The WalletHub study ranked favorable housing elements of 300 U.S. markets by three dimensions: affordability, real estate market, and quality of life. Affordability covers basics like cost of living, cost per square foot, and home insurance rates. The real estate market dimension takes into account rent-to-price-ratio, housing market health index, share of homes sold, median home price appreciation, and foreclosure rates. Then there’s quality of life. This is where the study seems a bit problematic.

At first blush, quality of life comes off the hardest to measure of the three, but WalletHub analysts looked at statistical data for things like crime rates (Allen received high marks there), job market, quality of school systems, and the area’s performance in recession recovery. That’s sensible. Other less-concrete factors include recreation-friendliness, driver-friendliness, and weather. Weather, in particular, strikes me as one of those ‘eye of the beholder’ qualities. Who comes to Texas in the dead of summer and ranks it No. 1? People who have never been to Colorado, or California, that’s who.

Home Energy Costs Impact Affordability, Quality of Life

Interestingly, home energy cost fell under quality of life as well, though this seems like much more of an affordability issue. In fact, a recent white paper published by ATTOM Data Solutions and UtilityScore suggests that utility costs grow ever more impactful and it won’t be long before home energy costs are actually factored into the mortgage application process. If you can’t afford the projected utility bills, you won’t be approved for a mortgage. While the median monthly cost of utilities adds an average 25 percent to monthly housing costs nationwide, that number is as high as 50 percent in places like Fort Worth. Again, it’s an issue that raises questions over basic affordability, not quality of life. You can check out the utility impact for your area on the heat map below.