Rhode Island is the best state for first-time buyers, according to a new study by GoBankingRates that looked at foreclosure rates, first-time buyer market share, median home prices and the availability of home-loan programs across the country.
The state has the highest share of first-time buyers, at 67%, as well as low foreclosure rates. West Virginia, with the lowest foreclosure rate and the second-lowest median list price, came in second, followed by Mississippi, Michigan and New York.
New Jersey ranked last, with the third-highest first-time buyer share, the highest foreclosure rate and a high median list price.
Though it’s been a difficult go for many first-time buyers, the tides appear to be turning. First-timers now make up 38% of the market. And in the first quarter of this year, there were more than twice as many new-owner households as new-renter households.
In a separate analysis, Zillow ranked the best cities for first-time buyers in May: Orlando, FL, Tampa, FL, Indianapolis, Las Vegas and San Antonio.
Despite Rhode Island’s ranking as a good option for first-timers, like other areas the state is facing tight inventory conditions. For-sale home supply there dropped 18% from April 2016 to April 2017, while median home prices rose 2% during the period.
Two new programs in Rhode Island will offer support to buyers in the state. One provides down payment assistance of up to $7,500 for some first-time buyers, and the other will refinance underwater mortgages with up to $75,000 principal forgiveness.
Despite New Jersey’s high home prices, there are some pockets of affordability. A Niche.com study pointed to the Hopewell Township, Princeton Junction, Heathcote, Short Hills and Glen Ridge communities.