As mortgage rates have soared from 3% to 6% in the past year, home prices in some areas have stopped rising after record increases that have lasted since 2021. In some metropolitan areas, prices have even started to fall. People hope to find deals in a softer market, but mortgage rates usually have offset that. One group that has a home price challenge in this environment is first-time buyers. Often, they can buy only modest-priced homes and make a modest down payment. (See the cities where home values have risen most since 2000.)
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Realtor.com’s recent The Ten Best Markets for First-Time Buyers in 2023 report points out that these markets are smaller cities near larger ones. Most are in the Northeast. Realtor.com Senior Economist George Ratiu commented, “Midsized towns with lots of amenities for young people and more affordable homes are great places for first-time homebuyers, especially in 2023.”
The metrics used included the percentage of residents between the ages of 25 to 34 living there. Only the top 100 markets by population were included. Income to home price was a factor. So was available inventory.
Portsmouth, Virginia, has 15.9% of its population between the measured ages. This compares to 13.4% nationwide. Inventory per 1,000 homeowners was 58.8%. The national number was 44.9%. The price-to-income ratio was 3.9%, compared to 5.1% nationally.
Portsmouth’s average home price was $239,000. The national average is about $375,000. Portsmouth is located near Virginia Beach, which is a fairly large city. (Also, nearby Norfolk Naval Base is the largest in the country.)
According to the Census Bureau, Portsmouth has almost 98,000 residents. Of these, 38% are white and 52% are Black. The median household income is $54,000, about $15,000 below the national average. The poverty rate is 17.2%, which is well above the national number.
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