Home Prices and Mortgage Rates: Unlocking Texas' Potential for First-Time Homebuyers

Home Prices and Mortgage Rates Affecting First-Time Homebuyers

With mortgage rates and housing prices stubbornly elevated, potential homebuyers in Texas are looking for ways to save. The median sale price for a home in the first-quarter of 2025 was over $400,000, according to the Federal Reserve Bank of St. Louis. Mortgage rates continue to hover around 7%, up from a record low of 2.65% in January 2021, impacted by Moody's recent downgrade of the U.S.'s credit rating.

While buyers cannot control these factors, their choice of city significantly affects property costs. Certain areas provide more affordable listings and diverse options, allowing buyers to make informed decisions. A study from SmartAsset ranked the best U.S. cities for first-time buyers based on affordability, inventory, demand, and expected shifts in home prices.

Best Place to Buy Overall

McAllen, Texas, tops SmartAsset's list, with a projected housing price change of only 0.4% in the next year. The median sale price here is $204,499, providing buyers substantial affordability based on the local income.

Best in Affordability

• Peoria, Illinois
• Decatur, Illinois
• Cedar Rapids, Iowa
• Davenport, Iowa
• Muncie, Indiana
• Springfield, Illinois
• St. Joseph, Missouri
• Lawton, Oklahoma

These Midwestern cities shine in affordability, but only Lawton made SmartAsset's overall top 10 list for first-time homebuyers.

Best Place for Expanded Inventory

Limited supply is a major market issue as competition drives prices higher. For those seeking more robust listings, consider Cape Coral, Florida, offering the most homes for sale per capita, followed by Port St. Lucie.