- Starter homes have become smaller, pricier, and of less quality than any category of houses over the six years that Trulia has been keeping track.
- That’s no good for millennials who are starting their own families and buying their first houses.
It’s tough out there for anyone trying to buy a home for the first time.
Starter homes are smaller, scarcer, and more expensive than they have been in at least the past six years, according to a report from Trulia released on Wednesday. The report described this combo as a “perfect storm.”
That’s no good for millennials, who are starting their own families, and, in some cases, trying to flee expensive urban centres to settle down in the suburbs.
Here are some of the worrying statistics via Trulia: In the first quarter of 2018, the inventory of starter homes – the cheapest, smallest homes that first-time buyers can usually afford – was down 14.2% from a year ago. New residential construction in the US rose to a 10-year high last year, but that’s not been sufficient to meet the demand for starter homes.
The median listing price of such homes rose 9.6%, faster than the rate of growth for luxury houses.
The cheapest houses required the largest share of buyers’ income – about 41.2%, which is above the 30% maximum that experts recommend should be spent on housing.
And that’s not all.
The square footage of starter homes shrank by 2% since 2012, while more expensive homes grew by nearly 9%. And yet, starter homes were the most in need of repairs and least ready for move-in.
But that’s little comfort for millennials who want to make the leap from renting or living with their parents to buying their first home.
Good luck out there.