8 California cities rank among worst spots for first-time homebuyers. Which ones?
Buying a home isn’t easy — and in California, it can feel nearly impossible.
According to a new WalletHub study, several California cities are among the worst places for first-time homebuyers in the country.
The personal finance company identified the best — and worst — places in the United States to settle down in 2025, ranking 300 cities on affordability, quality of life and other factors.
“Buying a home for the first time is a very stressful and difficult process, especially when housing prices are through the roof and interest rates have risen sharply in the past few years,” WalletHub analyst Chip Lupo wrote in an article published July 15.
“The best cities for first-time home buyers not only are affordable both in terms of buying a house and living there afterward,” Lupo said, “but they also have a lot of housing choices as well as low crime rates and good schools.”
Why is California bad for first-time homebuyers?
According to WalletHub, California dominates the list of the toughest places for first-time buyers.
Eight of the 10 worst cities for first-time homebuyers are in the Golden State, the study found, with Berkeley topping the list as the most challenging spot to buy a home in the United States.
The Bay Area city earned a WalletHub score of just 26.06 out of 100, landing near the bottom in affordability, real estate market strength, and quality of life.
Santa Monica was the second-worst city in the nation for first-time homebuyers, earning a score of 30.9 out of 100.
The Southern California city was the least affordable spot in the nation, the WalletHub study found. It also ranked relatively low for real estate and quality of life.
As of Thursday, July 24, the average California home value was $786,107, according to real estate website Zillow.
The average 30-year fixed mortgage rate in California was 6.82%, Zillow said.
In comparison, the national average 30-year fixed mortage rate was 6.63%.
Where are the worst US cities to buy a home?
According to WalletHub, these are the 10 worst cities in the United States for first-time homebuyers in 2025:
- Berkeley
- Santa Monica
- Oakland
- San Francisco
- Santa Barbara
- Los Angeles
- Costa Mesa
- Anchorage, Arkansas
- New Orleans
- San Mateo
What makes Florida city the best place to buy a home?
If you’re thinking about buying your first home this year, there’s a lot to consider.
“Buyers must balance what they want and need with what they can afford,” WalletHub financial writer Adam McCann said in the July 15 article. “Often, people begin searching for their dream homes without a realistic idea of market prices, interest rates or even their eligibility to get a mortgage.”
Along with price and financing, he said location is just as important when buying a home.
Even if a house has everything you want, McCann said, it might not feel like the right fit if it’s in a neighborhood that doesn’t match your needs.
“Potential buyers may want to narrow their search down to an area with a good reputation before getting into housing details,” he said.
Palm Bay, Florida, was the best place in the country to buy your first home in 2025, WalletHub found.
The city earned a WalletHub score of 67.24 out of 100.
“It’s among the leading cities in the country when it comes to active home listings per capita and new building permits per capita, so there are plenty of older and brand-new homes to choose from,” the personal finance company said.
Palm Bay has the fifth-highest millennial home-ownership rate and a “pretty decent school system” for children, WalletHub said.
The city has the third-highest home appreciation rate in the country, with home values increasing by 108% from 2017 to 2023.
Palm Bay wasn’t the only Florida city that was listed as a great place for first-time homebuyers.
Six of the top 10 cities on WalletHub’s list were in Florida, including two of the top three.
Where are top 10 cities for US homebuyers?
There were the top 10 cities in the United States for first-time homebuyers in 2025, according to WalletHub:
- Palm Bay, Florida
- Boise, Idaho
- Tampa, Florida
- Surprise, Arizona
- Huntsville, Alabama
- Gilbert, Arizona
- Cape Coral, Florida
- Orlando, Florida
- Lakeland, Florida
- Sunrise, Florida
Where can I find affordable housing in California?
According to the California Association of Realtors’ June home sales and price report, the most affordable home prices can largely be found in Northern California and the Central Valley.
Based on the group’s June home sales and price report, released July 17, these 10 California counties had the most affordable home prices:
- Lassen County — Median sold price of existing single-family homes was $286,500
- Lake County — $301,380
- Trinity County — $311,000
- Siskiyou County — $315,000
- Plumas County — $328,750
- Kings County — $365,000
- Tehama County — $380,700
- Shasta County — $382,500
- Glenn County — $385,000
- Tulare County — $389,000
How did WalletHub come up with its findings?
To to identify the best housing markets for first-time homebuyers, WalletHub analyzed 300 U.S. cities based on affordability, real estate market and quality of life and assigned them scores out of 100.
The website used 22 metrics to score the cities on home affordability, property taxes, crime rates, school quality and home price appreciation.
Finally, cities were ranked based on their overall scores to reflect their relative suitability for first-time home buyers.
This story was originally published July 25, 2025 at 5:00 AM with the headline "8 California cities rank among worst spots for first-time homebuyers. Which ones?."
