Starter Homes Are a Non-Starter

As prices rise, especially in desirable urban markets, what used to be called "starter homes" rarely come up for sale. And when they do, they go for more than first time home-buyers can afford.

1 minute read

April 13, 2016, 7:00 AM PDT

By Philip Rojc @PhilipRojc


California House

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The old consensus held that socially-mobile families began their home-owning years with a modest "starter home," providing a base to upgrade to better digs later in life. However, Emily Badger writes, "According to Trulia chief economist Ralph McLaughlin, the number of starter homes on the market in the 100 largest U.S. metros has dropped by about 44 percent since 2012." 

The housing crash bears some of the responsibility for the declining number of starter homes. Investors saw many foreclosed starter homes as good rental opportunities, taking them essentially off the market. And buyers in over their heads have been stuck in their purchases, making payments. But the broader affordability crisis is also taking a great toll. 

From the article: "In markets like Oakland, Portland and Washington, the prices for high-end homes are rapidly rising — the rungs of the ladder are moving further apart — and that makes it harder for people who own mid-tier homes to trade up. And when they get stuck, people who own starter homes have a harder time trading up, too." In effect, while urban residents may be socially mobile, they're constrained by a housing market that is forever out-of-reach. 

Tuesday, March 22, 2016 in The Washington Post

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