New research reveals valuable insights into the best and worst states for first-time homebuyers in the United States.
- Kentucky is considered the sixth-best state for first-time homebuyers, boasting a down payment requirement of $24,497.07.
- First-time buyers in Hawaii face the highest down payment requirement, with an average of $110,360.38 needed upfront.
- The overall average down payment for homes across the US is $43,870.93.
Moneywise ranked all 50 states based on the median price for houses in each respective state as provided by Zillow and the average down payment percentage of 13%, according to the National Association of Realtors.
The resulting state rankings offer a comprehensive guide for those looking to take the first steps toward owning their home.
First-time buyers in Kentucky face the sixth lowest down payment requirement, with an average of $24,497.07 needed upfront. In Kentucky, the median home value is $188,439.
- West Virginia is considered the best state for first-time homebuyers, boasting the lowest average down payment requirement of $16,783.39. West Virginia offers a range of attractive homes and neighborhoods, with an average Zillow home value of $129,103. Additionally, the state’s natural beauty, abundant recreational opportunities, and friendly communities make it an appealing place to live for many.
- Mississippi ranks as the second best state for first-time homebuyers,with an average down payment requirement of $20,517.64. The state’s average Zillow home value of $157,828 is also a draw, not to mention Mississippi being home to a rich cultural heritage, and its cities and towns offering a diverse range of architecture, cuisine, and entertainment.
- Arkansas is another state that offers great opportunities for first-time homebuyers, ranking third overall with an average down payment requirement of $22,082.71. The state’s average Zillow home value is $169,867. From the Ozark Mountains to the Mississippi Delta, the state also boasts diverse landscapes and plenty of outdoor activities for residents to enjoy.
- Oklahoma is a fantastic state for first-time homebuyers, coming in at fourth place on the list of states with the lowest average down payment requirement of $22,237.41. With an average Zillow home value of $171,057, the state has a rich culture and history, with a mix of small-town charm and modern amenities that appeal to a wide range of residents.
- Iowa rounds out the top five states for the best places for first-time homebuyers with the fifth lowest average down payment requirement of $23,844.34. The state, known for its beautiful countryside, charming small towns, and friendly people, has an average Zillow home value of $183,418.
The states where first-time home buyers require the smallest down payment
| States | Median Value Zillow |
Average Down Payment (13%) |
| West Virginia | $129,103 | $16,783.39 |
| Mississippi | $157,828 | $20,517.64 |
| Arkansas | $169,867 | $22,082.71 |
| Oklahoma | $171,057 | $22,237.41 |
| Iowa | $183,418 | $23,844.34 |
| Kentucky | $188,439 | $24,497.07 |
| Alabama | $194,695 | $25,310.35 |
| Kansas | $198,199 | $25,765.87 |
| Ohio | $199,959 | $25,994.67 |
| Louisiana | $205,972 | $26,776.36 |
In contrast first-time home buyers in Hawaii face the highest hurdle, requiring an average down payment of $110,360.38 to secure a home. With a median home value of $848,926 in Hawaii, it’s clear that the high cost of living in paradise comes with a hefty price tag for those looking to enter the housing market.
California follows closely with an average down payment requirement of $98,904.00; California is home to one of the most desirable real estate markets in the world with its links to the opulent entertainment industry. The median home value is $760,800.
While Washington takes third place with an average down payment of $77,445.16, the state’s median home value of $595,732 presents a significant financial hurdle for first-time homebuyers. Despite the challenges, Washington’s diverse geography and thriving urban centers make it a desirable place to live.
Colorado and Massachusetts bottom out of the top five worst states for first-time buyers, with average down payment requirements of $72,778.94 and $72,710.56, respectively. In Colorado, the median home value is $559,838, while in Massachusetts, the median home value is slightly lower at $559,312.
These figures highlight the significant financial challenges first-time buyers face in these states and the need for careful financial planning and decision-making.
A spokesperson for Moneywise iterated the difficulties that many first-time buyers face and how this data can help, “For first-time home buyers, the challenge of finding and affording their dream home can feel insurmountable at times.”
“But with perseverance, knowledge, and the right mortgage decision, the path to homeownership can become a reality. Armed with the knowledge from these findings, first-time home buyers can make informed decisions when choosing a state to buy their first home and work towards a brighter financial future.”
Moneywise is a personal finance website that offers a wide range of information and resources to help people make informed decisions about their finances. The website provides articles, guides, and tools on various topics, including budgeting, saving, investing, retirement planning, and debt management. It also offers product reviews, comparison tools, and expert advice on financial products like credit cards, loans, and insurance.
