Neighbors Bank Ranks Best Cities For First-time Homebuyers In 2026

Neighbors Bank on Monday released its list of the best cities for first-time homebuyers in 2026, revealing that the top three cities for first-time buyers are Peoria, Illinois, Fort Wayne, Indiana and Pittsburgh.

The report highlights 10 midsized U.S. markets where housing costs remain affordable and quality-of-life measures remain strong. It examined cities with populations above 115,000 and where total monthly housing costs account for no more than 35% of median household income.

Neighbors Bank also said in its report that it weighed factors such as crime rates, employment conditions, commute times, child care costs, home price appreciation, and access to entertainment and amenities.

The rest of the top 10 markets for first-time buyers in 2026 are South Bend, Indiana; Davenport, Iowa; Rockford, Illinois; Wichita, Kansas; Toledo, Ohio; Lansing, Michigan; and Wichita Falls, Texas. Most of the cities are located in the Midwest, Great Lakes and Great Plains regions.

Peoria’s No. 1 ranking was driven by the lowest combined housing and living costs, along with strong quality-of-life scores. Per Neighbors Bank data, Peoria posted a median home price of $161,868 and a median monthly housing cost of $1,492. Its housing cost as a share of income was 25%.

Rockford posted the strongest recent home price appreciation, while Davenport and Toledo recorded some of the lowest housing cost burdens. Wichita Falls stood out for particularly low entry-level home prices and short commute times.

“Affordability was an important factor, but it wasn’t the only thing we looked at,” said Jake Vehige, president of mortgage lending at Neighbors Bank. “We focused on places where first-time buyers can afford a home and enjoy a strong quality of life that includes entertainment, reasonable commutes and everyday conveniences. This is proof that you don’t have to live in a major coastal metro to live well in 2026.”

Median home prices among the top-ranked cities ranged from about $161,900 in Peoria to roughly $246,900 in Fort Wayne. Monthly housing costs accounted for between 25% and 34% of median household income across the markets, according to the report.

“These markets may not be on everyone’s radar, but they give first-time buyers a real chance to build equity and financial stability,” Vehige said. “For most looking to enter the housing market, that’s more important than chasing the next hot spot.”