There was a time when young families with average salaries shopped for a small first house in a reasonably priced neighborhood. The notion of a “starter home,” however, is rapidly turning into a real estate artifact, much like brass hardware and track lighting.
These days, homeowners looking to buy a house for the first time are purchasing properties with more land area and settling down, denoting a deep-seated change in family housing. Experts say that even families who do not have the funds to buy bigger properties still have ways to cope with the situation.
Purchasing the Second Home First
Tight housing inventory, stagnant wages, and rising home prices are tilting the buying population in the direction of higher earners — and they’re purchasing larger houses. In 2013, first-time homeowners acquired houses averaging 1,845 square feet. The average size of homes, according to the U.S. Census Bureau, is just 1,819 square feet. Thus, home buyers who were searching for the lowest-end houses during the housing growth 10 years ago would not be able to purchase a house today. Those that do have the financial capability to purchase a property search further up market.
First and Last Home
A study from the National Association of Realtors revealed that first-time buyers would rather purchase a house and stay there for at least a decade than purchase a starter home then upgrade in about five years or so. Another survey conducted by Bank of America found that 75 percent of first-time buyers would rather ditch the starter-home stage and look for a home that can provide for their present and future needs. Furthermore, 35 percent of the respondents said that they plan to retire in their first house (one and done, in other words).
Does this mark the beginning of the end of the starter home? Given how difficult it is to buy a house a today, the concept may soon become a thing of the past.