Buying a home in California continues to pose challenges, particularly for newcomers to the market. According to WalletHub’s latest report, eight out of the ten worst U.S. cities for first-time homebuyers are in the Golden State. Topping the list is Berkeley, rated lowest nationwide due to steep prices, limited affordability, and below-average quality-of-life metrics.
Santa Monica followed closely, ranking as the least affordable city in the country, despite its coastal charm. The average California home value hit $786,107 in July 2025, with mortgage rates hovering around 6.82%—higher than the national average. This combination of high prices and interest rates continues to price out younger and mid-income buyers.
In contrast, Palm Bay, Florida emerged as the best city for first-time homeownership, offering plentiful listings, strong appreciation rates, and a supportive environment for millennial buyers.
Those seeking affordability within California may find opportunities in counties such as Lassen, Lake, Trinity, and Tulare, where median home prices remain below $400,000.
WalletHub based its rankings on a blend of 22 metrics—from affordability and real estate strength to crime rates and school quality—highlighting the tough balancing act facing aspiring homeowners in competitive coastal markets.
