Starter homes are now becoming a thing of the past, much like shag carpet and popcorn ceilings. Younger folks may not even know the concept of a starter home, but at one time young families with average incomes could buy a small home in an affordable neighborhood. Today, families are choosing to buy homes with a little more foundation.
Buying the second home first
A starter home is considered a home that is smaller, cheaper, and maybe not in your desired location to settle down. The problem is first-time buyers aren’t choosing starter homes. This is partly because first-time buyers have become a select group, a group that is very different from what they were a few years ago. Stagnant wages, rising prices, and tight inventory are forcing buyers to be on the higher earning end; and they’re buying bigger homes.
Your first and last home
Instead of purchasing a home with the plans of upgrading in five or so years, homeowners are buying and staying put. When house hunting, they are searching for homes in which they intend to stay for 10 or more years. Bank of America found that 75 percent of homebuyers would rather skip the starter home and buy a home that meets their present and future needs.
Saving the starter home
Could this really be the end of the starter home? One thing that is keeping the starter home from going extinct is people not finding affordable homes in the city in which they want to live. First-time home buyers are having trouble finding homes in cities like San Francisco, Los Angeles, Seattle and other coastal cities.
More neighbors may be the solution
With 80 percent of first-time buyers buying single family homes, we may see this trend come to an end. Economic pressure and the way that housing construction is going is forcing people to rethink their home buying strategy. More families may see themselves raising their children in condos.