First-time homebuyers and small investors look for the same characteristics when considering where to buy real estate: affordability, safety, stability, employment, accessibility, limited competition, and prosperity. That’s why district’s 2026 Best market for first time home buyers It also serves as a handy cheat sheet for investors.
Kara Ng, a senior economist at Zillow, told CNBC Make It One thing the top buyer’s markets have in common is that they are all Located in the midwest or sunbelt. In other words, stay away from expensive coastal markets if you are looking for a good investment.
Having a property that at least pays for itself – given current interest rates – and that it appreciates equity Moderately, this should be the goal of any investor who plans to make a purchase using debt.
Avoiding financial disaster if the property sits vacant for a month or two also plays into the affordability factor of Zillow’s top picks, where all picks come down to 30% of monthly housing cost Recommended for financial well-being.
zillow top 10
That said, Zillow’s top 10 list raises some eyebrows. Here’s the full list, along with reasons why investors should consider these metros.
1. Jacksonville, Florida: Median home price: $282,895
Florida city was ranked No. 1 by Zillow because of this Affordability and of course, the allure of the Florida lifestyle and bustling port. Here’s why there’s never a shortage of potential tenants in Florida’s most populous city 21% single-family homes The city is owned by corporations..
2. Birmingham, Alabama: Median home price: $135,870
it has become one investor hot spot For a while. A city where almost 50% of the population rents, affordability and a young, employed demographic make it a good place to invest.
3. San Antonio, Texas: Median home price: $249,810
strength and relativity financial health The population of tenants means this is a place where you’re more likely to get your rent on time.
4. Atlanta, Georgia: Median home price: $385,599
“Hotlanta” is rarely out of the news for sports, entertainment and more. It generally has an economically thriving population, affordable housing, and many employment opportunities, providing high gross yields for investors. perfect neighborhood.
5. Houston, Texas: Median home price: $264,336
Although the population is slightly older, it is generally affordable, with many employment opportunities. fast growing suburbs. The scale of the city and its economic diversity work in Houston’s favor.
6. St. Louis, Missouri: Median home price: $181,928
More than half of the Zillow listings here are within reach of first-time homebuyers, which also means rents are lower. Affordable and cash flow opportunities Existence
7. Detroit, Michigan: Median home price: $75,358
detroit Despite its well-documented demand, it is a neighborhood-by-neighborhood, block-by-block city for investors. However, find the right property and it will likely be affordable, with A large tenant pool. Micro tenant screening It is necessary.
8. Raleigh, North Carolina: Median home price: $433,996
The goal is to break even in super-hot North Carolina, which is relatively affordable High-paying tech and education-driven economy And prices are appreciating. This is a good long term investment.
9. Baltimore, Maryland: Median home price: $188,101
For some, Baltimore may be a surprising inclusion, but don’t let its gritty reputation fool you. The whole of baltimore is not like one episode Wire. Home to novelist Anne Tyler and filmmaker John Waters, among many others, Baltimore has an artistic and academic reputation. Many neighborhoods worth investing inWhere affordability gives it a clear advantage compared to other East Coast cities.
10. Louisville, Kentucky: Median home price: $261,482
Average-income renters have plenty of options here, allowing small investors to move cash into a single-family home. For investors willing to do some work, it’s possible to discover some real gems here, like this one.
What do all cities have in common?
Rents in these areas are unlikely to pose a problem to tenants, while investors will stand to make losses., if not cash flowEven with current interest rates.
Employment and youth demographics all bode well for investors looking to buy-and-hold long termgain benefits through AppreciationRent increases, and eventually mortgage payments.
Comparison with other markets
While it is possible to find more affordable real estate markets, the combination of affordability, a large tenant pool, income and employment makes these Zillow markets vibrant urban ecosystems that mitigate the inefficiencies and negative cash flow tendencies that come with many expensive markets, where sales are low, compounded by high rates and global geopolitical tensions.
“There is little against the near-term backdrop to suggest a quick bounce back in sales,” said Daniel Wilhaber, an economist at Nationwide. reuters National sales numbers hit a nine-month low since March. “We look for sluggish sales this year, especially in the first half, before gradually increasing as mortgage rates decline in the second half and into 2027.”
As a result, National Association of Realtors Domestic sales growth forecast was cut to 4%. “Low consumer confidence and soft job growth have held back buyers,” said Lawrence Yun, chief economist at NAR. At the same time, “inventory remains a major constraint on the market. The inventory-to-sales ratio, or supply-to-demand ratio, is below historical norms.”
final thoughts
While the metros on Zillow’s list are not immune to economic and global adversities, many of these cities have escaped the worst predictions payable Their list, potency, and lack of cost burden tenants.
Recent surveys suggest that the focus will remain on affordable, somewhat untouched markets to live in and invest. a fresh Retirement Confidence Survey The survey, conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research, found that Americans – both working and retired – were deeply concerned about their ability to support themselves, which plays a role in the affordability of Zillow’s selection.
“Retirement confidence has clearly softened this year, and the data shows why,” said Craig Copeland, director of wealth benefits research at EBRI. Press release“Americans are grappling with a mix of immediate financial pressures and long-term uncertainty. Many workers are grappling with debt, inflation, and the rising costs of housing and health care, while retirees are worried about the future of Social Security and Medicare. Together, these pressures are making it harder for people to feel secure about their retirement.”
