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For Some Millennials, a Starter Home Is Hard to Find

by | Aug 24, 2021 23:27

Shortage of small, single-family homes leaves some first-time buyers frustrated and out of luck in a hot housing market

A neighborhood in Chandler, Ariz. Areas like Phoenix are seeing house hunters flood in from more expensive areas, challenging buyers looking for starter homes.

The shortage of available starter homes feels like yet another hurdle blocking some millennials’ path to traditional money milestones.

“It just feels like every little thing keeps getting put on hold,” said Samantha Berrafato, a 27-year-old house hunter searching for her first home in the Chicago area. “I’ve been putting having kids on hold, and I had put having a wedding on hold because we just couldn’t afford it. Now it’s like [that with] the house buying.”

The first rung on the homeownership ladder has long been an affordable “starter home.” These houses, with their smaller footprints and selling prices, allowed young homeowners to build wealth and upsize as they started their families.

But a number of factors are complicating this decadeslong trend.

Supply of “entry-level housing”—which Freddie Mac defines as homes under 1,400 square feet—is at a five-decade low.

The shortage of available starter homes feels like yet another hurdle blocking some millennials’ path to traditional money milestones.

“It just feels like every little thing keeps getting put on hold,” said Samantha Berrafato, a 27-year-old house hunter searching for her first home in the Chicago area. “I’ve been putting having kids on hold, and I had put having a wedding on hold because we just couldn’t afford it. Now it’s like [that with] the house buying.”

The first rung on the homeownership ladder has long been an affordable “starter home.” These houses, with their smaller footprints and selling prices, allowed young homeowners to build wealth and upsize as they started their families.

But a number of factors are complicating this decadeslong trend.

Supply of “entry-level housing”—which Freddie Mac defines as homes under 1,400 square feet—is at a five-decade low.

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