Starter Home Supply Jumps by 220,000 as First-Time Buyer Affordability Slowly Improves
Updated
Updated · Fox Business · Jul 20
Starter Home Supply Jumps by 220,000 as First-Time Buyer Affordability Slowly Improves
3 articles · Updated · Fox Business · Jul 20
Summary
220,000 more starter homes are on the market than in 2022, and prices are down 4.2%, giving first-time buyers modest relief after the pandemic-era shock.
Mortgage rates and thin inventory still dominate the market: the typical starter home now costs $344,000, up from $256,000 in 2019, while the income needed to qualify has climbed to $78,000 from $43,000.
Monthly payments are up more than 80% since 2019, helping push the average first-time buyer age to 40; first-time buyers made up 35% of purchases in May after falling to 30% a year earlier.
New construction in the South is driving most of the improvement, while nearly 70% of outstanding mortgages carry rates of 5% or below, keeping many existing owners locked in place.
Regionally, the South is the clearest bright spot, the West has selective price corrections, the Midwest is losing affordability, and the Northeast remains the toughest market with prices up 12.6% since 2022.